The Bay is the flagship department store within the Hudson's Bay Company. With 90 locations from coast to coast, The Bay is a full-line department store chain focused on high fashion merchandise in apparel, accessories and soft home categories. The Bay offers quality merchandise at mid-to-upper price points accompanied by traditional department store services. Committed to delivering excellent value and consistent, reliable service, Bay stores are located in suburban and urban markets, along with a dominant position in the downtown cores of Canada's major cities.
Hudson’s Bay Co. posts drop in Q4 profit as Hurricane Sandy hurts US sales
Hudson’s Bay Co. (HBC) (TSE:HBC) Thursday said fourth quarter earnings slid 5.6 per cent, despite strong same-store sales growth in Canada, as its Lord & Taylor operations in the U.S. experienced “significant disruption” due to Hurricane Sandy.
The company also said that total sales for the first nine weeks of fiscal 2013 did not meet management's expectations, as despite the fact that Hudson's Bay's sales were in line with its forecasts, Lord & Taylor's sales were weaker than anticipated on account of a later start to Spring.
The retailer, which returned to the public stock markets in November last year, said that for the quarter that ended February 2, net earnings from continuing operations were $93.6 million or 81 cents per share, compared to $99.2 million or 95 cents per share a year earlier.
Adjusted earnings were $99.3 million or 86 cents per share, compared to $94.8 million or 91 cents per share in the same quarter of 2012.
Retail sales increased 6.7 per cent to $1.38 billion for the period, from $1.29 billion a year earlier.
HBC noted that the latest period included an extra week, which contributed $50.0 million in retail sales.
Since 2008, the company has been working to transform its stores and revamp its image into a more upscale retailer. It owns Lord & Taylor in the U.S. as well as the Canadian Home Outfitters superstore chain.
Overall fourth quarter same-store sales, or sales of stores open a year or more, increased 2.1 per cent, on a 6.1-per-cent increase at HBC’s Canadian stores, which helped to offset a 2.9-per-cent drop in the U.S. as Hurricane Sandy negatively impacted sales at its Lord & Taylor stores.
"While we are pleased with how our initiatives are progressing, there have been challenges,” said governor and CEO Richard Baker. “During the fourth quarter, Hurricane Sandy not only forced us to temporarily close the majority of our Lord & Taylor locations, but also inflicted significant damage upon our surrounding communities.
“As a result, its impact remained a factor for much of the quarter. More recently, during the first quarter of this fiscal year, unusual weather patterns have led to weaker than anticipated results, particularly at Lord & Taylor."
Online sales for the company in the fourth quarter grew 62.8 per cent to $58 million, from sales of $35.6 million a year ago.
Gross margin fell to 37.6 per cent, compared to 38.8 per cent a year earlier, due to increased year-over-year inventory clearance activity at Lord & Taylor because of the significant effect of Hurricane Sandy on customers and sales, HBC said.
For the full-year 2013, HBC said that it expects total sales growth of 1.5 to 3.5 per cent on same store sales growth of three to five per cent.
Founded in 1670, the Hudson’s Bay Company is North America’s longest continually operated company. It now has 48 Lord & Taylor store locations in the northeastern U.S. and in two major cities in the midwest. In Canada, HBC operates 90 Hudson’s Bay locations and 69 Home Outfitters stores.