Saks Global Enterprises recently announced a significant downturn in its financial performance, slashing its full-year earnings guidance and reporting a substantial sales decline for the second quarter. This challenging update to investors on Thursday cited difficulties in managing inventory flow, a problem exacerbated by years of strained vendor relationships. The luxury retailer experienced a drop in sales to $1.6 billion in the second quarter, marking a 13% decrease compared to the same period last year. Concurrently, the company reported a loss of $77 million by one earnings measure, a significant increase from the $41 million loss recorded in the prior year's second quarter.

Further compounding its woes, Saks Global Enterprises revised its 2025 earnings guidance downwards by approximately half, now forecasting a range around $150 million. This stands in stark contrast to the earlier projection of around $300 million provided at the beginning of the year. The repercussions of this revised outlook were immediately felt in the market, with the company’s bonds due in 2029 declining in value, trading as low as 44.5 cents on the dollar compared to around 51 cents just the day before.

These recent financial struggles come on the heels of a major debt restructuring in August, where Saks reorganized its $2.2 billion debt load. This effort, which imposed steep losses on some creditors, was aimed at boosting liquidity and turning around the business. The company's troubles are not new; it had been facing financial difficulties, including losing money and falling behind on supplier payments, merely months after its formation in late 2024 through the merger of Saks Fifth Avenue and Neiman Marcus.

A representative for Saks acknowledged the situation in an emailed statement, noting that the results “were softer than expected due to inventory challenges, which continued into the third quarter.” Despite the current headwinds, the company expressed optimism for the future, stating, “We expect our performance to improve through the holiday season and into 2026 and beyond.”