Hudson’s Bay Co.’s first quarter as the owner of Saks Fifth Avenue saw the luxury retailer’s same-store sales rise 3.1 percent, helping its new parent to a 6.6 percent gain in the period.
In its first quarterly report since acquiring Saks for $2.9 billion on Nov. 4, Toronto-based Hudson’s Bay reported that the flagship Hudson’s Bay division’s comps were up 5.2 percent while Lord & Taylor’s declined 1.3 percent.
Overall in the quarter, the company registered net income of 29.1 million Canadian dollars, or $27.3 million, down 66.5 percent from the 86.8 million Canadian dollars, or $87.5 million, registered in the fourth quarter of 2012. Conversion to U.S. dollars is calculated at average exchange for the periods referenced.
With the addition of Saks for the quarter, retail sales rose 73.6 percent to 2.41 billion Canadian dollars, or $2.25 billion, from 1.39 billion Canadian dollars, or $1.4 billion, in the prior-year quarter. Digitial sales at Hudson’s Bay and Lord & Taylor rose 59 percent, with the total including Saks reaching 252.3 million Canadian dollars, or $243.2 million.
Richard Baker, chairman and chief executive officer, noted that results for continuing operations in the quarter came in at the low end of company guidance. “This was primarily attributable to difficult weather in many of our geographies in December and January, which affected consumer shopping behavior and traffic,” he said. “Although Hudson’s Bay and Saks Fifth Avenue achieved mid-single-digit same-store sales growth, Lord & Taylor did not rebound as we had anticipated.”
Guidance for sales in 2014 was set at between 7.8 billion and 8.1 billion Canadian dollars, or about $7 billion to $7.25 billion at current exchange. Normalized earnings before interest, taxes, depreciation and amortization are forecast to be between 580 million and 620 million Canadian dollars, or $519.3 million to $555.1 million at current exchange. Fluctuation in the exchange rate between the U.S. and Canadian dollar could affect results.
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