The Hudson’s Bay Co. is still mid-“transformation,” but its second-quarter sales are showing signs of improvement.
The department store chain and operator of Lord & Taylor, Saks Fifth Avenue and Gilt posted a net loss of 201 million Canadian dollars ($162.3 million), an increase from 142 million Canadian dollars a year ago, on total retail sales of 3.3 billion Canadian dollars, which are up 1.2 percent. Consolidated comparable sales also inched up by 0.4 percent.
Earnings before interest, taxes, depreciation and amortization came in at 207 million Canadian dollars, compared to 263 million last year.
Sales got a boost from digital, where consolidated revenue increased 12.7 percent, but also from three new Saks locations and 26 new Saks Off 5th locations.
The company pointed to handbags and men’s as top performers at Saks and said full-price sales in women’s showed a “notable increase.”
For the rest of the year, HBC said it will be focused on the digital presence of its banner stores.
The second-quarter results led executive chairman Richard Baker to admit HBC is “optimistic about the remainder of the year.”
“The current retail environment provides both challenges and opportunities, and while it was a tough second quarter as expected, we continue to make the smart decisions necessary to succeed in this rapidly evolving landscape,” Baker added.
He also alluded to the possibility that some HBC real estate will be sold this year, saying “HBC has a long, successful history of accretive transactions with our real estate assets and we are actively exploring further opportunities to build on this track record.”
The results follow HBC’s decision earlier this year to create a “transformation plan” that reorganized its corporate teams and cut 2,000 jobs in an effort to create 350 million Canadian dollars in annual savings.
That plan was rolled out along with first-quarter earnings that showed HBC’s net loss had grown to 221 million Canadian dollars from 97 million Canadian dollars in the first quarter of 2016, on total retail sales down by 3 percent to 3.2 billion Canadian dollars.
“In these rapidly changing times, you need to react fast to the market,” HBC’s chief executive officer Jerry Storch said at the time.
HBC noted that the reorganization is “progressing as expected,” but that it will have “a much larger impact” on the latter half of the year.
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