Acquisition Costs Boost Hudson's Bay Q3 Loss
TORONTO-The costs related to the company's acquisition of Saks Inc., which closed in November, flooded additional red ink onto Hudson's Bay Co. bottom line in its fiscal third quarter ending on Nov. 2.
The retailer's net loss in the quarter totaled C$124.2 million (U.S.$ $119.2 million), compared to C$14.4 million (about the same in U.S. dollars, using average exchange rates for the two periods). Hudson's Bay incurred acquisition-related finance costs of C$123.4 million (U.S. $118.5 million) as it ramped up to the Saks acquisition closing. In addition, selling, general and administrative expenses rose 8.6 percent in dollars and 100 basis points as a percentage of sales, to 39.5 percent.
Helped by the onset of the holiday shopping season, Hudson's Bay's net sales finished 5.8 percent ahead of the third quarter of last year, totaling C$984.1 million (U.S. $944.7 million). Same-store sales for the company as a whole were up 5.7 percent, including a 6.4 percent gain at Hudson's Bay and an increase of 1.6 percent at Lord & Taylor. E-commerce sales for the company as a whole were up 58.3 percent. Gross margin picked up 120 basis points to finish at 40.2 percent.
Richard Baker, Hudson's Bay's governor and CEO, said the company is focused on the holiday shopping season, and said investments made in both its stores and its omnichannel platform "have produced clear and promising results." Going into 2014, the integration of Saks--which "provides us with the ability to offer our customers an impressive range of shopping experiences"--will be a key priority, Baker said.