Saks Global feels the pinch: reports Q1 top- and bottom-line declines

Akin to others in its sector, Saks Global is starting to see the impact of the currently challenging luxury environment reflected in its financials. For the first quarter of the year, the luxury retail group reported widening losses and lowered revenue as issues with inventory flow took precedence.

According to the company’s financial report, seen and reported on by WWD, the group’s net loss for the period ended May 3 was 232 million dollars, an increase on the 184 million dollars reported in the same period last year, which excluded the Neiman Marcus Group (NMG). On a combined basis, net loss came to 168 million dollars. The company’s adjusted EBITDA amounted to 13 million dollars, up from a loss of 1 million dollars.

Revenue came to 1.6 billion dollars, compared to 900 million dollars in the Q1 of 2024, once again excluding NMG. On a combined basis, WWD said revenue totaled 1.9 billion dollars a year ago. Saks Global’s gross profit margin totalled 44 percent of revenue, remaining flat on a combined basis, while its consolidated gross merchandise value was 2 million dollars.

Results ‘slightly better than expected’

In a conference call for bondholders, attended by WWD, Marc Metrick, chief executive officer for Saks Global, said that across the business, “we are making solid strides in executing on the transformation”. He continued: “Our first quarter results came in slightly better than expected, as we had planned for continued inventory pressures, short-term effects of our integration work and more cautious spending by core luxury consumers.”

The company is still working on improving its inventory flow, with “below optimum levels” of inventory availability continuing to impact revenues. Its buyers are also working on repairing relationships with vendors, WWD noted, after many experienced missed payments.

In a letter to vendors seen by the media outlet, Metrick said that on the back of securing up to 600 million dollars in new financing commitments, the company was now looking at a bond exchange, which is expected to be completed in August. “This comprehensive financing package meaningfully enhances our liquidity and strengthens our financial position for the long term,” Metrick added. “Please be assured, we remain committed to meeting our financial obligations to our partners as we had outlined in February.”