Hudson’s Bay Co posts weak showing in fourth quarter
TORONTO — Profits and sales grew at Hudson’s Bay Co. in the fourth quarter but the large department store saw year-over-year sales declines in the bulk of its store divisions.
The owner of Hudson’s Bay, Saks and Kaufhof Retail saw its retail sales climb 2.1 per cent in the period ended Feb. 3 to $4.7 billion, an increase of $95 million from the prior year.
Net earnings were $84 million, or 39 cents per share, compared with a net loss of $152 million (83 cents) in the prior year. Normalized earnings per share, excluding items such as restructuring costs, were 9 cents, up from one cent a year ago.
“While we are not pleased with our recent performance, we continue to capitalize on the value of our real estate portfolio and are taking action to improve our operating results,” said Richard Baker, HBC’s executive chairman. “Together, we are determined to grow sales and increase margins while evaluating all opportunities to create shareholder value.”
The retailer said sales were hurt by “operational challenges” stemming from its restructuring plan that aims to generate annual savings of $350 million by the end of fiscal 2018, as well as lower traffic at Lord & Taylor, HBC’s off-price stores, and Galeria Kaufhof.
Comparable sales at Saks Fifth Avenue grew for the third consecutive quarter, increasing by 2.1 per cent. Comparable sales at Saks Fifth Avenue have now been positive for four of the last five quarters, while comparable sales at Hudson’s Bay grew for the 30th consecutive quarter.
But overall comparable sales at the retailer’s department store group, which also includes Lord & Taylor and Home Outfitters, fell 2.6 per cent.
Similarly, comparable sales — a measure that tallies volume at stores open for more than a year — tumbled 3.4 per cent at HBC’s European department stores and sank 7.6 per cent at HBC’s struggling off-price division, which includes Saks Off Fifth and the online retailer Gilt.com.