Hudson’s Bay Co. backed off its sales and profit targets for the year after navigating rough waters in the third quarter.
The sprawling department store operator said its third-quarter comparable sales fell 3.6 percent in constant currencies, including a 4.6 percent drop at Saks Fifth Avenue, a 2.2 percent drop in its European division and an 8.4 percent decline in its off-price unit.
Hudson’s Bay’s outlook for the year was based on improved comp sales. Since that has not happened, and given the uncertainty in the environment, management trimmed its sales and adjusted earnings outlooks for the year.
The firm is now looking for sales of 14.5 billion Canadian dollars ($10.8 billion at current exchange) to 14.9 billion Canadian dollars ($11.1 billion), instead of 14.9 billion Canadian dollars to 15.9 billion Canadian dollars ($11.8 billion). And adjusted earnings before interest, taxes, depreciation and amortization and restructuring charges are now slated to range from 1.44 billion Canadian dollars ($1.07 billion) to 1.53 billion Canadian dollars ($1.14 billion), instead of 1.56 billion Canadian dollars ($1.6 billion) to 1.71 billion Canadian dollars ($1.3 billion).
Jerry Storch, chief executive officer, said: “The apparel retail environment continued to be challenging through the third quarter. We remain optimistic about this year’s upcoming extended holiday season following last year’s tough fourth quarter which was impacted by warm weather, and are focused on executing our all channel strategy for long-term growth and increased profitability.”
He noted the company continues to invest in its operations and recently finished a robotic fulfillment system in its our Toronto distribution center to support the growing Canadian business.
“Our investments in technology are continuing to pay off, with digital sales up across all of our department store banners,” Storch said. “We believe that HBC is well positioned heading into the holiday season and we are excited about the offerings we have for our customers across all our banners and geographies.”
The firm’s banners include: Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt and Saks Off 5th, Galeria Kaufhof in Germany, Galeria Inno in Belgium and Sportarena.