Q3 net loss widens at Hudson’s Bay Company, same-store sales drop

Hudson’s Bay Company’s (HBC) third quarter comparable sales declined 1.7 percent. Third quarter revenues totalled 1.8 billion Canadian dollars, including 55 million Canadian dollars from liquidating stores at Saks Off 5th, Hudson’s Bay clearance centers, and HBC Netherlands. Digital sales increased 15 percent year-over year due to continued improvements in our data-driven marketing strategy. The company said that net loss from continuing operations was 175 million Canadian dollars, a 105 million Canadian decrease from the same period a year ago.

“In the third quarter, we faced our toughest comp, soft industry-wide luxury sales and the challenge of winning back market share in Canada. Strong digital growth, continued cost containment and inventory control were not enough to deliver the financial performance we wanted,” said Helena Foulkes, HBC’s CEO.

Third quarter results of Hudson’s Bay Company

Saks Fifth Avenue’s comparable sales decreased 2.3 percent in the third quarter, as compared to a 7.3 percent increase a year ago, resulting in a two-year stacked comp of 5 percent. The company said, men’s and jewellery were fast growing categories, and the Fifth Avenue Club, Saks’ personal shopping service available in every store, grew 15 percent year-over-year.

Hudson’s Bay comparable sales decreased 3.9 percent and increased 0.4 percent on a two-year stacked basis. Growth in digital at Saks Off 5th resulted in a positive 4.9 percent comparable sales and an increase of 2.6 percent on a two-year stacked basis.

Third quarter gross profit declined by 38 million Canadian dollars year-over-year to 706 million Canadian dollars, primarily driven by lower sales volume, and the strategic changes in vendor relationships. Gross profit margin was 38.3 percent, down 120 basis points year-over-year. Adjusting gross profit margin rate was 39.5 percent in the third quarter, consistent with the prior year’s performance.

Excluding one-time items, HBC’s normalized net loss was 128 million Canadian dollars compared to 56 million Canadian dollars a year ago. The company said in a statement that sale of the company’s interest in the European real estate joint venture and strategic changes in vendor relationships also weighed on the company’s profitability, with adjusted EBITDA down 32 percent year-over-year to 84 million Canadian dollars. Adjusted EBITDAR was 146 million Canadian dollars compared to 202 million Canadian dollars in the same period a year ago.

Picture:Facebook/Saks Fifth Avenue