Hudson's Bay Slashes Q3 Loss
TORONTO-As its integration of Saks continues, Hudson's Bay Co. reported a third-quarter net loss of C$13 million (U.S.$11.6 million), compared to a net loss of C$126 million (U.S.$114.2 million) for the third quarter of last year.
Bolstered by the acquisition of Saks, net sales in the quarter, which ended on Nov. 1, jumped 94.4 percent to C$1.9 billion (U.S.$1.7 billion). This included a gain of 2.7 percent in same-store sales.
Hudson's Bay's department-store group posted a same-store sales increase of 1.7 percent and a jump of 73 percent in digital sales. Same-store sales at Saks Fifth Avenue were up 1 percent, while Saks Fifth Avenue Off 5th reported a same-store sales pickup of 19.2 percent.
Gross margin in the quarter was 41.1 percent, up 90 basis points from the third quarter of last year. Selling, general and administrative expenses rose 92.2 percent in dollars but declined 41 basis points as a percentage of sales, to 36.1 percent.
Hudson's Bay said it expects sales for the fiscal year as a whole to total from C$7.8 billion to C$8.1 billion (U.S.$6.9 billion to U.S.$7.2 billion, based on current exchange rates), with same-store sales growth in the low to mid-single digits.
Richard Baker, the company's governor and CEO, said, "We continue to progress on the five core strategies of our long-term plan to grow our sales and expand our EBITDA margin. We remain committed to driving digital sales across all our banners, growing Off 5th, bringing Saks Fifth Avenue and Off 5th to Canada, driving outsized growth at our top doors and driving synergies and efficiencies across the business."
Baker also noted that Hudson's Bay's recently completed U.S.$1.25 billion, 20-year mortgage on the ground portion of the flagship Saks Fifth Avenue store in New York City "has strengthened our financial position by providing long-term, fixed-rate capital on highly attractive terms."