Although Hudson’s Bay has taken a number of significant steps to right its financial course, including winding down its Home Outfitters chain and selling its German operation, the company still posted a bigger first quarter adjusted net loss. The bigger loss came despite improvement at its Saks department store and off-price operations.
First quarter net income from continuing operations was $275 million, or $1.15 per diluted share, versus a net loss or $132 million, or 72 cents per diluted share, in the period a year before. All dollar figures are in Canadian currency. Adjusted to exclude one-time impacts, net loss was $209 million versus $114 million in the quarter a year previous.
Comparable sales decreased 2.1% in the quarter year over year, but increased 0.3% with Lord + Taylor and Home Outfitters results excluded. Saks Fifth Avenue comps increased 2.4% while those for Hudson’s Bay stores decreased 4.3% from the 2018 period. Saks Off 5th comps increased 4.4% from the year-previous quarter. Comparable store sales at Lord + Taylor tumbled 17.1% from the 2018 period.
First quarter revenues totaled $2.12 billion, down 3.3% from the 2018 period primarily due to operating fewer stores than a year ago and the comparable sales decline at Lord + Taylor, according to HBC. Retail sales were $2.08 billion versus $2.15 billion in the quarter a year prior. Operating income was $674 million versus an operating loss of $115 million in the year-earlier quarter.
“We are seeing progress on a number of crucial fronts from our continued work to fix the fundamentals and reposition HBC for the future,” said Helena Foulkes, HBC CEO. “Strategically, we have simplified the organization and placed a greater emphasis on our North American retail operations. We are exercising financial discipline while making the necessary investments to capitalize on our greatest opportunities, Hudson’s Bay and Saks Fifth Avenue. Once the European transactions are complete, we will have finished two real estate transactions at near or better than our estimated equity values. The real estate transactions and our pursuit of strategic alternatives for Lord + Taylor, further demonstrate the bold actions we’ve taken to move the company forward, and we are optimistic about our prospects.”