Real estate deals, sales growth and increased traction in its digital platforms are what helped Hudson’s Bay Co. return to profitability in the second quarter, the company said.
The Canadian retail chain operator behind Saks Fifth Avenue, Lord & Taylor and its newly acquired Germany-based Galeria Kaufhof, reported sales growth of more than 15 percent for the quarter ending Aug. 1, 2015.
Richard Baker, HBC’s governor and executive chairman, dubbed the quarter a “transformative” one with “multiple major initiatives that will shape HBC for years to come.”
“During the quarter we closed our joint venture with Simon Property Group as well as the first tranche of our joint venture with RioCan REIT … we paid down more than $1 billion in debt, providing us with additional flexibility to invest in our retail businesses … We [also acquired] Galeria Kaufhof, Germany’s leading department store chain, which we expect to be significantly accretive to our shareholders,” Baker said in a statement.
During the quarter, the company said Saks Fifth Avenue Off 5TH saw the biggest improvement in same-store sales, increasing 12.7 percent. Meanwhile, its Department Store Group’s same-store sales improved 4.9 percent and Saks Fifth Avenue’s same-store sales increased 0.1 percent.
Net Income: The company said its net earnings for the quarter totaled $67 million (CAD), or $53 million, compared to a net loss of $36 million (CAD) in the prior year’s same period.
EPS: Earnings per diluted share were 33 cents, compared to the same year-ago quarter when there was a net loss per share of 23 cents.
Net Revenue: Net sales increased 15 percent year-over-year to $2 billion (CAD), or $1.6 billion, compared to net sales of $1.8 billion (CAD) in the comparable quarter.
Executive Insights: “Our second quarter was characterized by very strong sales growth, led by the increasing traction of our digital platforms. We continue to drive growth today while executing on our strategies to build our businesses and invest in the long term vision of HBC. These strategies include strengthening our digital capabilities, expanding Off 5th, bringing Saks Fifth Avenue and Off 5th to Canada and leveraging our scale to capture synergies and promote efficiencies across our businesses.” — Jerry Storch, HBC’s CEO, in a statement
Looking Ahead: The company reaffirmed its fiscal 2015 outlook.
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