Nordstrom, Inc. (NYSE:JWN) is the only one of the major luxury department stores to post a decline in net income, and has the lowest increase in same-store sales. However, it had the second largest increase in revenue. Saks had the highest at 5%, Macy’s, Inc. (NYSE:M) came in third at 4%, Neiman Marcus was a close fourth with 3.8%, and Dillards was flat.
The company also indicated financial difficulty with Nordstrom Rack. The company has heavily invested in the outlet store. Rack same-store sales only increased 0.8%, compared to last year’s 6.8% increase. However, net sales were up 10% at the rack.
The problem at Nordstrom is somewhere in the operating expenses, which were up 14 basis points over the same period in fiscal 2012. Gross profit, as a percentage of net sales, decreased 50 basis points compared with the same period in fiscal 2012. The decrease reflected higher occupancy costs related to the accelerated Rack store expansion, combined with lower than planned sales volume. The decrease was also due to higher expenses associated with the growth in the Fashion Rewards program.
Neiman Marcus
Neiman Marcus Group is not publicly traded, but is owned by two different private firms. Rumors actively swirl around about a possible sell-off or IPO, and for these reasons, we will take a quick look at the numbers, in case the opportunity to invest in the company comes along.
Neiman Marcus’s fiscal third quarter earnings rose 13%. Revenue increased 3.8% to $1.1 billion. Same-store sales improved 3.3%. All in all, not bad, and right in line with most of the other luxury department stores. Neiman Marcus Group is the home of Neiman Marcus, Last Call, and Bergdorf Goodman stores.
Conclusion
Not all luxury retailers are created equal. They may look the same on the outside, but the individual numbers reveal something different. Dillard’s, Inc. (NYSE:DDS) and Macy’s are both fantastic stocks to consider. Saks presented unexciting numbers, but with the current jump in the stock price, it isn’t worth buying right now based on rumors. Considering the impressive growth recently at Neiman Marcus, and the overall health of the luxury department store sector, if the company does go public, it would be a buy to consider.
Invest wisely, stay for the long run, and retire to a lifestyle where you too can shop at these fine establishments!
Erin McBride has no position in any stocks mentioned. The Motley Fool owns shares of Dillard’s. Erin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article 4 Stocks to Put You in the Lap of Luxury originally appeared on Fool.com and is written by Erin McBride.
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