HBC's first quarter revenues drop 3.3 percent

In its statement for the first quarter, Hudson’s Bay Company (HBC) said, first quarter revenues totalled 2.1 billion dollars, a decrease of 72 million dollars or 3.3 percent primarily due to operating fewer stores than a year ago and the comparable sales decline at Lord + Taylor. HBC’s first quarter comparable sales decreased 2.1 percent and increased 0.3 percent, excluding Lord + Taylor and Home Outfitters.

“We are seeing progress on a number of crucial fronts from our continued work to fix the fundamentals and reposition HBC for the future,” said Helena Foulkes, HBC CEO in a statement, adding, “Strategically, we have simplified the organization and placed a greater emphasis on our North American retail operations.”

HBC’s comparable sales results by business segments

Saks Fifth Avenue’s first quarter comparable sales grew 2.4 percent, while Hudson’s Bay’s comparable sales decreased 4.3 percent in the first quarter. Saks Off 5th returned to comparable sales growth of 4.4 percent.

Gross profit declined year-over-year by 48 million dollars, while gross profit margin was 39 percent in the first quarter, down 90 basis points year-over-year. The company added that approximately half of the decline is due to store closures, with the balance driven by a higher proportion of clearance sales in this year’s first quarter.

Net income was 275 million dollars, driven by the 817 million dollars gain from the sale of the Lord + Taylor flagship building in New York City. Excluding one time items, HBC’s normalized net loss was 209 million dollars. Adjusted EBITDA was 44 million dollars, with North American department stores contributing 6 million dollars and real estate joint ventures adding 38 million dollars. Adjusted EBITDAR was 124 million dollars.

The HBC’s board of directors has declared dividend of 0.0125 cents per HBC common share. As disclosed in May 2019, HBC is pursuing strategic alternatives for the Lord + Taylor operating business, including a possible sale or merger, and is closing Home Outfitters by the end of the second quarter. On June 10, the company agreed to sell its remaining stake in its German real estate joint venture, divest its related retail joint venture, and assume certain obligations for a total consideration of 1.5 billion dollars.

Picture:Facebook/Saks Fifth Avenue