Hudson’s Bay Co., aided by a $181 million tax benefit, reported net earnings of  $84 million Canadian ($65 million U.S.) for the quarter ended Feb. 3, 2018, compared to a net loss of $152 million ($118 million U.S) in the prior year.

The bottom line was also impacted by reduced impairment and other non-recurring charges, lower depreciation and amortization expenses and higher equity income from real estate joint ventures.

All subsequent figures are in Canadian dollars.

Normalized net earnings were $20 million compared to $2 million in the prior year, primarily a result of lower depreciation and amortization expenses, reduced impairment expense and higher gross profit dollars, partially offset by higher expenses.

Fourth quarter earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) came to $528 million compared to $564 million in the year-ago period.

Comparable sales declined 2.4 percent, with total sales in the quarter increasing 2.1 percent to $4.7 billion. The company noted the addition of a 14th week in the period, versus 13 in the year-ago period.

Comparable sales at Saks Fifth Avenue grew for the third consecutive quarter, increasing by 2.1 percent. However, most of the rest of the business saw comparable sales declines including 2.6 percent at the department store group which includes Hudson’s Bay and Lord & Taylor, 3.4 percent at HBC Europe which includes Galeria Kaufhof, and 7.6 percent at HBC Off Price which includes Gilt and Saks Off5th.

The company said Hudson’s Bay and Saks Fifth Avenue continued to see strong performance in 2017, and that Hudson’s Bay will benefit by the closing of Sears Canada.

But the company also cited “significant opportunity to improve topline sales at HBC Europe and stabilize operations at the off price businesses.”

The company has over $3 billion in debt including loans and a mortgage on the Saks Fifth Avenue flagship of $1.55 billion.

For the year, the company posted a loss of $581 million, compared to a loss of $516 million the year before. EBITDAR was $1.13 billion versus $1.35 billion the year before. Retail sales came to $14.35 billion versus $14.46 billion the year before.

“While we are not pleased with our recent performance, we continue to capitalize on the value of our real estate portfolio and are taking action to improve our operating results,” said HBC’s governor and executive chairman Richard Baker. “Our valuable real estate assets provide HBC with a solid financial base, and the recent agreement to sell the Lord & Taylor flagship building further demonstrates our ability to monetize these assets and enhance liquidity. We are also working to better position our retail operations, and have made several key leadership appointments which we believe will help drive business performance. I am confident that the addition of Helena Foulkes and her transformational leadership will invigorate HBC with a fresh perspective as we position ourselves for the future. I would like to thank all of our associates for their hard work and dedication during a challenging time. Together, we are determined to grow sales and increase margins while evaluating all opportunities to create shareholder value.”

Helena Foulkes, HBC’s chief executive officer, added, “HBC is a unique company with iconic banners and a storied history. I’ve spent the past six weeks visiting our stores and offices around the world, and it is clear to me that there is significant opportunity to build upon our solid foundation to realize the full potential of our business. In the coming weeks, I will continue to listen and learn from our associates and customers as I work with the leadership team to heighten accountability for driving business results, improve our culture, and develop a long-term strategic plan.”

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