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Hudson’s Bay Reports Same Store Sales Growth

Hudson’s Bay Co., in reporting its results for the 13-week period ended May 3, announced an overall consolidated comparable store sales growth of 2.8%, and a major increase in digital sales. Hudson’s Bay and Lord & Taylor comps gained 2.5%, according to the company, while comps at Saks Fifth Avenue grew 2.6% and those at Saks Fifth Avenue OFF 5TH advanced 15.1%.

Digital sales were $207 million, reflecting both the inclusion of Saks and Hudson’s Bay/Lord 7 Taylor group, the company reported. In last year’s first quarter, the company posted E-Commerce sales of $31.1 million.

Normalized EBITDA was $97 million, or 5.2% of sales, versus $29 million, or 3.3% of sales, in the year-prior period.

In the quarter, HBC completed the sale and leaseback of its Queen Street flagship store and Simpson Tower office complex in Toronto for a purchase price of $650 million. Substantially, all of the net proceeds of the sale were used to reduce debt, according to the Hudson’s Bay report.

The retailer has leased the entire retail and office complex for a base term of 25 years with renewal options of up to approximately 25 additional years, it stated. The property will serve as the site of one of Canada’s first Saks Fifth Avenue locations, the company noted. Hudson’s Bay also agreed to lease space in Toronto’s Sherway Gardens for another Saks Fifth Avenue store in Canada, it related.

In other store news, two OFF 5TH stores opened in Palm Beach, FL and Milwaukee, WI, and two Saks Fifth Avenue locations closed in Orlando, FL and Stamford, CT, Hudson’s Bay announced.

“Overall, first quarter performance was in the range of our expectations,” Richard Baker, HBC’s governor and CEO, said in releasing the financial results. “We are encouraged by the business trends witnessed through the quarter, which bode well for the balance of this year. Furthermore, we are pleased by the progress of our integration of Saks, which is on-track to achieve approximately $50 million in HBC synergies targeted for this year.”

For the 13-week period, retail sales were $1.86 billion, an increase of $971 million from $884 million for the prior fiscal year. The increase was primarily attributable to the inclusion of Saks, according to the report.

Gross profit was $716 million, an increase of $360 million from $356 million for the prior year. The gross profit increase also was primarily attributable to the inclusion of Saks, Hudson’s Bay pointed out.