Hudson’s Bay Posts Q3 Loss of $93.9 Million
Posted on December 6, 2016 by
TORONTO-The addition of its European unit and Gilt beefed up Hudson’s Bay Company’s third quarter sales, but also led to higher costs that put its bottom line in the red.
The company posted a net loss of $93.9 million for the quarter ending Oct. 29, compared to net income of $5.3 million for the third quarter of last year. Selling, general and administrative expenses jumped 32.6 percent in dollars and 123 basis points as a percentage of sales, to 40.7 percent. HBC Europe—consisting of the Galeria Kaufhof, Galeria Inno and Sportarena banners in Europe—was formed when those stores were acquired last year, while Hudson’s Bay purchased online retailer Gilt earlier this year.
Those additions were responsible for a 28.6 percent gain in net sales, to $2.5 billion. Same-store sales for the company as a whole were down 3.6 percent, including declines of 2.4 percent at the department store group (consisting of Hudson’s Bay, Lord & Taylor and Home Outfitters), 2.2 percent at HBC Europe, 8.4 percent at HBC Off Price (Saks Off Fifth and Gilt) and 4.6 percent at Saks Fifth Avenue.
Hudson’s Bay has begun efforts to improve sales growth at all of its banners. Part of the strategy is “optimizing” the home furnishings business at Hudson’s Bay stores, according to a company statement (which did not elaborate on how the store would do this).
The company is also investing in its digital business, a major part of which is the installation of a robotic fulfillment center here. “We continue to focus on delighting our customers and building a digital and brick-and-mortar platform that will allow them to shop whenever, wherever and however they choose,” said Jerry Storch, Hudson’s Bay’s CEO.
Hudson’s Bay said it now expects sales for the fiscal year as a whole to range between $10.9 billion and $11.2 billion, with flat to low single-digit same store sales growth companywide.