TORONTO — Hudson’s Bay Co. earned $84 million in its latest quarter compared with a loss a year ago, but fell short of expectations Wednesday as sales at its European and discount operations struggled.
The retailer said the profit amounted to 39 cents per share for the quarter ended Feb. 3 compared with a loss of $152 million or 83 cents per share in the same quarter last year.
The results included a $181-million tax gain resulting from the recent U.S. tax reforms.
On a normalized basis, HBC says it earned $20 million or nine cents per share in its most recent quarter compared with a normalized profit of $2 million or a penny per share a year ago.
Analysts on average had expected a profit of 60 cents per share, according to Thomson Reuters.
“While we are not pleased with our recent performance, we continue to capitalize on the value of our real estate portfolio and are taking action to improve our operating results,” HBC executive chairman Richard Baker said in a statement.
“We are also working to better position our retail operations, and have made several key leadership appointments which we believe will help drive business performance.”
HBC hired Helena Foulkes, a former executive with the CVS pharmacy chain, as the retailer’s new chief executive last month.
“I’ve spent the past six weeks visiting our stores and offices around the world, and it is clear to me that there is significant opportunity to build upon our solid foundation to realize the full potential of our business,” Foulkes said.
Retail sales in what was HBC’s fourth quarter totalled $4.7 billion, up from $4.6 billion, as it was helped by an extra week compared with a year earlier, however overall comparable sales fell 2.4 per cent.
Comparable sales at Saks Fifth Avenue increased 2.1 per cent, while the key retail metric fell 2.6 per cent at its department store group, which includes its Hudson’s Bay, Lord & Taylor and Home Outfitters banners.
HBC Europe comparable sales fell 3.4 per cent, while HBC Off Price, which includes Saks Off 5th and Gilt, saw comparable sales slip 7.6 per cent.
The company said it saw “significant opportunity” to improve sales at HBC Europe and stabilize operations at HBC Off Price. It said it is focused on identifying a path towards increased profitability for the banners.
HBC, like other department stores, has been struggling in a difficult retail landscape as consumers turn to online shopping.
Last year, the company signed a deal to sell its Lord & Talyor Fifth Avenue building to WeWork Property Advisors for nearly $1.1 billion and to pursue a strategic alliance with WeWork to pursue future real estate transactions.
Companies in this story: (TSX:HBC)
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