S&P stabilizes Neiman Marcus outlook

S&P said it changed its outlook for NMG Holding Co. Inc. (Neiman Marcus) to stable from positive and affirmed all its ratings, including the B- rating on its $1 billion of 7 1/8% notes due 2026.

“The outlook revision reflects the weaker-than-expected credit metrics in 2023 amid a challenging operating environment. The current weakening of consumer demand for discretionary products, retailer inventory realignment, and inflationary headwinds continue to pressure Neiman's performance. Neiman reported a net sales decline of 9.4% in the third quarter ended April 29, 2023, relative to the comparable period in 2022. Both comparable sales from store and online operations experienced a decline, specifically down 5% and 17%, respectively, primarily due to softening demand,” the agency said in a press release.

S&P said it expects Neiman’s leverage to be above 7x in 2023 before declining over the next 12 months.

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