Hudson's Bay Q4 Net Falls 66.5 Percent

Hudson's BayTORONTO-Increased costs, especially those stemming from its acquisition of Saks, hurt Hudson's Bay Co.'s bottom line for both the fourth quarter and fiscal year.

Net income for the quarter finished at C$29.1 million ($27.2 million, according to the average exchange rate for the quarter), down 66.5 percent from last year's fourth quarter. The retailer posted a net loss for the fiscal year ending on Feb. 1 of C$258.1 million ($248.9 million, according to the average exchange rate for the year), compared to a net loss of C$35.1 million (roughly the same in U.S. dollars).

Selling, general and administrative expenses in the quarter ballooned by 120.3 percent in dollars and 700 basis points as a percentage of sales, to 33 percent--reflecting both the addition of Saks' numbers and the costs of the acquisition, which closed on Nov. 4. Hudson's Bay also bore the brunt of additional costs from an increase in noncash share compensation, a decrease in noncash pension income and a hike in costs associated with its strategic initiatives.

Again reflecting the inclusion of Saks, net sales jumped 73.6 percent to C$2.4 billion ($2.3 billion) in the quarter, including a consolidated same-store sales gain of 6.6 percent. This brought sales for the fiscal year to C$5.2 billion ($5 billion), up 28.1 percent and including a same-store sales gain of 5.4 percent. Gross margin in the quarter dropped 80 basis points to 36.8 percent.

In the current fiscal year, the first full year with Saks in its corporate family, Hudson's Bay said it expects sales to total from C$7.8 billion to C$8.1 billion (about the same in U.S. dollars, according to today's exchange rate). Richard Baker, the retail company's governor and CEO, said it has developed a strategic roadmap of four core strategies now that Saks is fully in its fold.

The first of these core strategies will be the expansion of HBC Digital to drive sales across all of the company's banners. Second will be the expansion of Off 5th, Saks' value-oriented format. Third will be the expansion of Saks into Canada, and fourth will be the driving of sales at the top 10 stores in each of the company's banners.

"These locations offer considerable potential for outsized sales growth and set the tone that flows to our other stores," Baker said.

HFN Staff | News & Commentary

HFN provides detailed information on the key home classifications: Housewares, Tabletop, Floor Covering & Rugs, Furniture, Home Textiles, Lighting, Home Decor, Mattresses & Bedding, Gifts, Major Appliances and Consumer Electronics as well as Business, Finance and Retail.

Videos

  • Adriana Hoyos Relaunches Brand at High Point Market

    Camera Icon   More Videos

Subscribe to
HFN Omnichannel
Receive the news you need to know about the trends in the industry delivered right to your inbox.

Current Issue

  • HFN cover for September 2017

    HFN's DIGITAL EDITION

    September 2017


    COVER STORY:

    2017 State of the Industry Report
    Cautious Optimism, Mixed Results

    Many expected 2016 would be a banner year, but the political and economic climate softened consumer confidence. It was also a year consumers spent more lavishly on home remodeling rather than decorating.


    ALSO IN THIS ISSUE:

    •  TJX Unveils First U.S. Homesense Store - In a time when retailers are reducing store counts, TJX continues to get physical.
    •   Ikea’s Fluid Spaces - The retailer’s new intros reflect multifunctional rooms.
    •  N.Y. Home Fashions Market Preview - Textile textures get soft and cozy, colors warmer.