What: The Dallas-based luxury retailer reported a 9% drop in revenues and a 25% decline in earnings before EBITDA to USD 124 million.

Why it is important: Luxury US consumers are starting to spend less on fashion and more on travel and services, impacting luxury retailers such as Saks and Neiman’s.

Despite the decline, results indicated a normalizing of sales since the summer and were also consistent with the company’s expectations.

The group saw strength with its most valuable customers as they are less impacted by the macro environment and continue to buy with strength, especially in shoes, jewellery, and men’s.

While NMG’s inventory is up compared to last year, the retailer is looking to reduce expenses and ensure that its inventory matches demand for the next fiscal year as it is also impacting margins.

Gross margins continue to be pressured by the highly promotional environment and negative year-over-year comparisons are attributed to last year’s pent-up demand and record full-price selling across the luxury industry.

The group believes that it’s growing in the right places amid the difficult economic environment, thanks to its business model and focused strategies that put it in a strong position to deliver long-term, sustainable, and profitable growth.

In its last fiscal year ended July 31, NMG recorded USD 5 billion in revenues on a gross merchandise value basis and generated USD 495 million in adjusted EBITDA. According to the company, liquidity remains above USD 1 billion.

Neiman Marcus posts challenging quarter