Saks Owner Hudson’s Bay Tempers Outlook As Sales Continue to Drop

Saks Fifth Avenue Greenwich Shoe Store
Inside Saks 10022-Shoe Greenwich.
Elaine & ChiChi Ubiña Photography for Saks Fifth Avenue

Hudson’s Bay Co. lowered its guidance for the remainder of the year after announcing another quarter of sluggish comparable store sales on Thursday.

The Canada-based owner of Lord & Taylor, Saks Fifth Ave. and other department stores reported comparable store sales declines across all of its banners in the third quarter, with comps at Saks Fifth Ave. down 4.6 percent and HBC Off Price — comprised of Gilt and Saks Off 5th — down 8.4 percent.

Comps in the Department Store Group also slumped 2.4 percent, while HBC Europe — comprised of Galeria Kaufhof, Galeria Inno and Sportarena — saw comps slip 2.2 percent.

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HBC CEO Jerry Storch said the apparel retail environment continued to challenge the firm in the third quarter, but he is hoping for a boost during the upcoming holiday season.

We remain optimistic about this year’s upcoming extended holiday season following last year’s tough fourth quarter, which was impacted by warm weather, and are focused on executing our all channel strategy for long-term growth and increased profitability,” Storch said in a release. “We continue to invest in our operations both in store and online and recently completed the installation of a highly innovative, best-in-class robotic fulfillment system in our Toronto Distribution Center, which will support our growing digital business in Canada.”

Following a tough first half, HBC downward adjusted its full-year outlook and now expects sales in the range of $14.5 to $14.9 billion CAD and flat to low-single-digit overall comparable sales growth on a constant currency basis.

“Our investments in technology are continuing to pay off, with digital sales up across all of our department store banners,” Storch noted. “We believe that HBC is well positioned heading into the holiday season, and we are excited about the offerings we have for our customers across all our banners and geographies.”

The company said its total digital sales increased 5.4 percent on a constant currency comparable basis. Excluding Gilt, total digital sales increased 13.5 percent on a constant currency comparable basis.