Hudson’s Bay Co., hurt by a restructuring charge, posted a fourth-quarter net loss off operations of 226 million Canadian dollars, or $170 million, but showed continued strength at the Saks Fifth Avenue division.
That compares to net earnings of 180 million Canadian dollars in the same quarter a year ago. All subsequent figures are in Canadian dollars.
HBC cited a $194 million restructuring charge, which unfavorably impacted contributions from the company’s European retail joint venture, and lower income tax benefits after a favorable $181 million impact in the fourth quarter of 2017 as a result of U.S. tax reform.
Fourth-quarter revenue was $2.9 billion, a decrease of $167 million from the same quarter a year ago. In 2017, the company’s results included a 53rd week, which generated $120 million of revenue. Excluding the extra week, fourth-quarter revenue declined $47 million or 1.6 percent in 2018.
Saks’ fourth-quarter comparable sales grew 3.9 percent, marking its seventh consecutive quarter of comparable sales growth despite being hampered by construction on the main floor during the holiday season at the New York flagship.
The department store group, which includes Hudson’s Bay, Lord & Taylor and Home Outfitters, saw a 5.2 percent decline in comparable sales.
“We are a far stronger company today than a year ago, despite some of the top-line challenges this quarter,” said Helena Foulkes, HBC’s chief executive officer. “We’ve returned to positive operating cash flow, improved the bottom line across all of our businesses, increased profitability by 30 percent and strengthened our balance sheet. We also made great strides in simplifying the business, strengthening operations and deepening understanding of our customers. While there is still more work to be done, these results further demonstrate that HBC is benefiting from the bold strategic actions taken throughout 2018.”
Foulkes continued, “The strength of Saks Fifth Avenue continued thanks to our stores outside of New York City as the Fifth Avenue flagship remained under renovation. In early February, we opened the new main floor, a modern and expansive experience that redefines luxury retail and showcases one of the largest luxury handbag assortments in the world.
“At Hudson’s Bay, we are capable of better results from what is a solid business. Merchandise choices sparked the top-line momentum shift at Hudson’s Bay and we believe those are fixable with time. Saks Fifth Avenue and Hudson’s Bay offer HBC our greatest long-term growth opportunities and we are encouraged about what lies ahead.”