Hudson's Bay Company's Q2 net loss widens

Hudson’s Bay Company’s (HBC) second quarter revenues totalled 1.9 billion Canadian dollars (1.4 billion dollars), including a 19 percent increase in digital sales, while comparable sales decreased 0.4 percent. The company said, gross margin declined 530 basis points year-over-year to 34 percent due to changes in store footprint, vendor relationships and merchandise, and a hyper-promotional market environment.

“While we’ve progressed in simplifying the business and strengthening operations, the second quarter demonstrates that we are still in the early stages of what HBC can become,” said Helena Foulkes HBC’s CEO in a statement, adding, “With the Lord + Taylor sale agreement, our focus is now squarely on Saks Fifth Avenue and Hudson’s Bay - businesses that have the greatest potential for HBC amid the consolidating industry.”

Highlights of HBC’s second quarter performance

Saks Fifth Avenue’s comparable sales grew for the ninth consecutive quarter by 0.6 percent driven by growth in men’s, women’s ready-to-wear, handbags and beauty categories. Hudson’s Bay’s comparable sales decreased 3.4 percent, while Saks OFF 5th’s comp increased 3.4 percent with gains in jewellery, women’s modern clothing and men’s classic apparel.

Second quarter net loss from continuing operations was 462 million Canadian dollars (350 million dollars), compared to 104 million Canadian dollars (78.7 million dollars) in the second quarter of 2018. The loss from the European retail operations totalled 69 million Canadian dollars (52.2 million dollars). HBC expects the 1.5 billion Canadian dollars sale of the company’s remaining stake in its European real estate and retail joint ventures to close in the fall. As part of the overall transaction, HBC will assume full ownership of the Netherlands retail business and its lease liabilities. HBC’s normalized net loss was 171 million Canadian dollars (129.5 million dollars) compared to 85 million Canadian dollars in the second quarter a year ago.

The board of directors of HBC declared the company’s regular quarterly dividend of 0.0125 Canadian dollar per HBC common share to be paid on October 15, 2019, to shareholders of record at the close of business on September 30, 2019.

Photo: Facebook/Saks Off 5th