Neiman Marcus Group, confronting a volatile macro economy and increasingly cautious consumers, saw a dip in each revenues and profitability in its first fiscal quarter which ended Oct.28.

Adjusted earnings before interest, taxes, depreciation and amortization, eased to $95 million in the most recent three-month period, versus $112 million within the prior-year period, the corporate disclosed to WWD on Wednesday.

The luxurious retailer, operator of Neiman Marcus and Bergdorf Goodman stores and e-commerce web sites, also reported $948 million in sales for its last fiscal quarter, in comparison with $1.034 billion within the prior 12 months. Same-store sales fell 8 percent last quarter.

The corporate ended the quarter with $35 million of money, versus $194 million within the prior-year period. “The decline in money has to do with working capital needs,” NMG said in a press release. “The decline was also related to deliberate investments in the corporate’s multiyear capital strategy in addition to strategic initiatives.” That will include such costs as store improvements, digital and technology upgrades.

The corporate had around $880 million of liquidity, including money, bank card receivables and revolver availability. 

Net leverage, or net debt to EBITDA, jumped to around 4.8 times, versus 2 times, year-over-year.

“There’s slowdown in comparison with last 12 months but we proceed to have a really profitable business, with a double-digit EBITDA rate,” Geoffroy van Raemdonck, chief executive officer of the Neiman Marcus Group, told WWD.

“We even have a healthy position by way of inventory which is right down to last 12 months, meaningfully, and we’re getting the products earlier,” he said.

While NMG’s luxury business has softened somewhat, van Raemdonck noted, “We proceed to be very strong in shoes and jewellery, which have been strong and regular for multiple quarters, and we saw strength in beauty this quarter as well.”

Van Raemdonck also said the best-performing luxury brands “are those on the quiet luxury side, the brands which might be less logo driven.”

NMG doesn’t expect this upcoming Black Friday weekend to supply an immense change within the business, partially since the store’s luxury customers are less inclined to hit the stores when there’s an enormous rush to buy and retailers blitz the market with price promoting.

Van Raemdonck said NMG “continues to navigate a volatile macro environment, cautious customers and increased promotionally in the luxurious sector. What’s different on this quarter is that we’re seeing the engaged customer slowing down as well, though there may be some resilience amongst our highest spending customers.”

Other luxury firms including Kering and Saks Fifth Avenue have also encountered softening demand, and LVMH recently reported sales increases that didn’t meet expectations. Others have cited a “normalization” in luxury spending after a spree occurred right after the pandemic.

In his prepared statement, van Raemdonck said, “This fall, we began seeing a broader demand deceleration with relatively consistent trends across all areas of the business. We remain committed to our strategy and are taking deliberate actions to drive customer engagement. Our strong liquidity position offers us a comparative advantage in the present setting, and we proceed to strategically put money into our supply chain, stores, digital platforms and other areas that drive a differentiated customer experience across our integrated retail model.”

The CEO also cited “significantly improved expense management and inventory position over the past 12 months,” adding, “We’re proactively addressing the headwinds we face by reducing controllable costs and focusing our investments on our growth and core strategies to make sure the long-term success of the organization.

“Our core customer is loyal. We’ve got fostered strong relationships, creating lasting connections with customers. We remain committed to our strategy of leaning into relationships, with our 3,300-plus sales associates engaging with our customers each in store and via distant selling.”

He said that in NMG’s first quarter, greater than 20 percent of net sales were either transacted through or directly influenced by sales associates interacting with customers who weren’t physically present within the stores, which was greater than in first quarter last 12 months. 

He also said that despite the slowdown, the corporate continues to make strategic investments in key capabilities across NMG that support the shopper experience, including $300 million since fiscal 12 months 2021 in technology, supply chain and store renovations.

As well as, NMG has a “packed calendar full of trunk shows and activations,” van Raemdonck said. NMG and other retailers can even be benefited by the additional shopping day between Thanksgiving and Christmas — 32 days this 12 months versus 31 last 12 months — and since with Christmas Day landing on a Monday this 12 months, there may be a whole week just before to buy.