The Canada-based owner of Saks Fifth Ave. and Lord & Taylor preannounced softer-than-expected Q2 comparable store sales this week.
HBC said its overall comps in the quarter declined 1.9 percent, or 1.3 percent on a constant currency basis, versus Wall Street’s consensus estimates for a 0.8 percent comp gain.
By division, comps in the Department Store Group increased 1.1 percent; comps at HBC Off Price (Saks Off 5th and Gilt) decreased 11.4 percent; Saks Fifth Avenue comps decreased 1.3 percent; and HBC Europe (Galeria Kaufhof, Galeria Inno and Sportarena) comps decreased 0.9 percent.
“[The Department Store Group] had solid performance during the quarter led by the ongoing strength of Hudson’s Bay in Canada. HBC Europe performed well amidst an increasingly tumultuous geo-political environment. Saks Fifth Avenue improved considerably despite the continued decline in tourism,” HBC CEO Jerry Storch said in a release. “At Saks Off 5th, as discussed last quarter, we significantly reduced promotional activity compared to the prior year, which has increased margins substantially while reducing sales.”
Meanwhile, at Gilt, Storch added that a recent change in the return policy has helped the e-commerce site to “forge longer and stronger relationships with customers over the long term” but will reduce reported net comparable sales in the short term.
Athletic Shoe Sales
Total U.S. athletic footwear point-of-sales gained 15.4 percent year-over-year in the first week of August, compared with a 10.1 percent gain comp last year, Citi Research analyst Kate McShane said in an Aug. 11 note.
Referencing data from SportScan, McShane said results were driven by a 21.9 percent increase in unit sales and a 5.3 percent decline in average selling prices.
Sales in casual athletic led the gains, rising 23.1 percent year-over-year. Basketball category sales advanced 17.7 percent and sales in running were up 12.2 percent, McShane wrote.