Saks Global, impacted by ongoing inventory issues and higher costs, reported top- and bottom-line declines in the second quarter.
Revenue for the quarter ended Aug. 2 fell 11.1 percent to $1.6 billion from $1.8 billion a year earlier. Gross merchandise value totaled $2 billion, down slightly from $2.1 billion in the year-ago quarter.
And the net loss was $288 million compared with $271 million a year earlier, taking the-then separate Saks Fifth Avenue and Neiman Marcus businesses together.
“Our second-quarter sales results were softer than expected, largely due to inventory challenges, and these challenges continued into the third quarter. That said, we are encouraged by the resilience of our concession business, which continues to reflect strong demand from luxury consumers,” said Marc Metrick, the chief executive officer of Saks Global Operating Group, in a statement. “With receipt flow improving and the ongoing relative strength of our concession business, we continue to see evidence that when inventory is present, we see improvements in the top line. We expect inventory levels to normalize through the holiday season and into 2026, supporting improved sales performance as we move forward.”
Adjusted losses before interest, depreciation and amortization came in at $77 million, compared to a loss of $41 million in the prior-year period. The decrease in adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, was driven primarily by unfavorable business performance, including a higher proportion of fixed expenses on lower levels of revenue, Saks Global indicated.
Saks bought the Neiman Marcus Group for $2.7 billion in December — giving it a mega presence in U.S. luxury retailing that includes Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Saks Off-5th, Last Call and Horchow.
While the second-quarter results were disappointing, officials cited improvement in inventory flow and progress capturing synergies in the wake of the acquisition. In addition to consolidations, including layoffs, the companies have formed a central buying organization.
“Sales performance was softer than expected, largely due to inventory challenges, but concession sales improved over last year levels, indicating strong demand by luxury customers,” the company said in a statement Thursday morning.
Saks’ purchase of the Neiman Marcus significantly increased the company’s debt load. There’s also an increased level of urgency to repair relations with certain vendors awaiting overdue payments, and Saks Global, like other retailers, is up against macro headwinds and a soft global luxury sector.
Total debt for Saks Global at the end of the second quarter amounted to $4.7 billion, including approximately $1.1 billion in borrowings under the company’s asset-based lending agreement, $2.5 billion in aggregate senior secured notes, the $1.25 billion non-recourse mortgage on the Saks Fifth Avenue flagship, and borrowings of approximately $29 million related to Saks Off5th.com facilities. Saks Global’s pro forma debt stood at $4.9 billion after the completion of a financing transaction in August 2025.
The company ended the second quarter with $1.9 billion worth of inventory. Sources tell WWD that Saks Global continues to be late paying certain vendors. Also some vendors have recently discontinued shipping Saks, either voluntarily or by design by Saks.
In other statistics released by the company, gross profit margin came in at 37.9 percent of revenues, 20 basis points lower than the prior year period on a combined basis. “Higher full-price selling offset by minor shifts in sales mix, seasonal markdowns and promotional costs yielded margin results in the second quarter slightly below the prior year,” the company indicated.
Selling, general and administrative, or SG&A, expenses were 45.5 percent of revenues in the second quarter, and decreased by $66 million in the quarter through synergies attained by integrating operations of Saks and Neiman’s, as well as lower variable expenses on lower levels of revenue.
Despite another tough quarter, Metrick said the company is making “meaningful progress on our transformation strategy. We continue to advance our integration of Neiman Marcus Group, delivering synergies ahead of plan and reaching a major milestone with the launch of a unified merchandising platform for all of our luxury retail businesses. Operating from one platform, we are well-positioned to optimize inventory buys and unlock margin potential. We are already seeing cost savings and margin improvements in our results as we continue to drive forward on our integration — benefits that we expect will only build moving ahead.”
Marc Metrick
Metrick also said the company is executing on approximately $300 million in run-rate synergies,
“nearly double the expectations outlined at transaction close for year one. Regarding full-year
fiscal 2025, the Company is on track to deliver over $200 million of these synergies as cost
savings within the year. This accelerated synergy realization is especially notable given costs
expected to achieve these synergies remain unchanged. The company is confident in its ability to
reach our accelerated annualized synergy target of $600 million over the next few years.”
To help raise cash, the company is considering strategic alternatives for Bergdorf Goodman, including possibly selling a minority stake, but no deal is guaranteed.
