Hudson’s Bay Co.’s challenges continue.
The retail group, which posted today its financial results for the three months ended Nov. 2, widened its net losses to $CA226 million ($171 million), or $CA1.23 per share — compared with the prior year period’s $CA161 million ($122 million) loss or $CA0.88 per share loss. Losses from continuing operations were $CA175 million.
Third-quarter revenues were roughly flat at $CA1.84 billion ($1.39 billion), with comps down 1.7% despite a 15% year-over-year increase in digital sales.
“In the third quarter, we faced our toughest comp, soft industry-wide luxury sales and the challenge of winning back market share in Canada,” CEO Helena Foulkes said in a statement. “Strong digital growth, continued cost containment and inventory control were not enough to deliver the financial performance we wanted.”
During the third quarter, Saks Fifth Avenue’s comparable sales fell 2.3%, versus a 7.3% increase a year ago. Its two-year stacked comps were 5%. However, the parent firm cited men’s and jewelry as the its fast-growing categories, and its Fifth Avenue Club personal shopping service grew 15%.
“With last year’s historically high comparable sales growth for Saks, we knew the third quarter would be challenging,” Foulkes shared. “Across the industry, there was a pullback among luxury consumers, allowing shoppers to more frequently take advantage of markdowns, which ultimately reduced full-price sales.”
Comps for Saks Off 5th, on the other hand, climbed 4.9% and rose 2.6% on a two-year stacked basis, largely due to its digital performance, while Hudson’s Bay’s same-store sales dropped 3.9% in the third quarter. It improved 0.4% on a two-year stacked basis.
“As expected, reigniting sales at Hudson’s Bay is taking time as we replace unproductive brands and improve service,” added Foulkes. “Our better, more modern merchandise had good performance, reinforcing confidence in our strategy, which we are accelerating for the upcoming spring season.”
The report comes amid HBC’s bid to go private, which has led to a relentless battle that pits a group led by Chairman Richard Baker against minority stakeholders Catalyst Capital Group Inc.
In the latest development, the private investment firm reiterated its offer of CA$11.00 ($8.29) per share in cash for all common shares of the Canadian retailer, while Baker’s group urged the company’s special committee to either accept an all-cash offer of CA$10.30 ($7.86) per share or remain investors in HBC as a public company. Right now, the Baker group collectively holds 57% of the company’s common shares, while Catalyst owns 17.5%.
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