Hudson’s Bay Still In Turnaround Mode Through Q3

Hudson’s Bay said it was encouraged with its turnaround strategies through the third quarter, highlighted by a strong comp increase at its Saks Fifth Avenue division.

The company’s net loss from continuing operations, in terms of U.S. currency, was $92 million, or 39 cents per share, versus $87 million, or 48 cents per share, in the year-before quarter. Adjusted net loss was $72 million, or 31 cents per share, versus $71 million, or 39 cents per diluted share, in the period a year before.

Overall comparable sales increased 2.9% in the quarter year over year. With the calendar shift of Hudson Bay’s Bay Days promotional event taken into account, total comps gained 1.2%. By division, comps increased 7.3% at Saks Fifth Avenue, decreased 2.3% at Saks Off 5th and increased 0.9% at DSG, including the Hudson’s Bay, Lord & Taylor and Home Outfitters operations. Revenues increased to $1.63 billion from the 2017 quarter. Operating loss was $101 million, versus $100 million, in the quarter a fiscal year prior.

In the second quarter, company entered into an agreement to sell its controlling interest in HBC Europe and to form a strategic partnership for its European businesses. The transaction closed subsequent to the end of the third quarter.

Helena Foulkes, Hudson’s Bay CEO, said the company is encouraged by ongoing improvements in the business. “The bold strategic actions we are taking are beginning to pay off,” she said, “and the recent closing of the European transaction will now allow us to concentrate on the North American business. While we are optimistic about the progress and opportunities that lie ahead for HBC, we recognize there is more work to be done to further generate growth and greater profitability. We are driving our retail performance with a firm emphasis on fixing the fundamentals and improving our omnichannel customer experience.”

Richard Baker, HBC’s governor and executive chairman, said, “In the last year alone, HBC has brought in new effective leadership, sold Gilt, rightsized the Lord & Taylor business and generated significant proceeds from the European transaction and the value creation from certain of our leaseholds. These actions have led to the improved financial results that the company has reported so far this year. We continue to be focused on executing our strategy to increase the profitability of our retail business while unlocking the value of our extraordinary real estate portfolio.”