Hudson's Bay Posts $2 Million Loss in Q3
TORONTO-Hudson's Bay Co. reported a net loss of $2 million in its fiscal third quarter ending on Oct. 27, in the company's first quarterly financial statement since its initial public offering in November.
The loss compares with net income of $1.2 billion in last year's third quarter, which included the results of discontinued operations. Net sales in the quarter totaled $943.4 million (after converting from Canadian to U.S. dollars using the average exchange rate for the quarter), a gain of 5.2 percent. This increase included a pickup of 3.5 percent in consolidated same-store sales, consisting of a rise of 4.5 percent at Hudson's Bay stores and 5.2 percent at Lord & Taylor stores.
A Hudson's Bay statement said promotional events, such as Bay Days at Hudson's Bay and Friends and Family at Lord & Taylor, helped boost both total and same-store sales. In addition, the company recorded a jump of 55.3 percent in sales from its Omni-channel initiative.
Gross margin in the quarter fell 230 basis points to 39 percent, due to what the statement termed "unfavorable inventory storage" and markdowns on seasonal merchandise. Selling, general and administrative expenses rose 2.4 percent in dollars but fell 50 basis points as a percentage of sales, to 37.8 percent.
Richard Baker, governor and CEO of Hudson's, lauded the company's overall sales performance in the quarter. Baker noted that both Hudson's Bay and Lord & Taylor achieved 8 percent increases in same-store sales in October alone.