Hudson’s Bay Co., impacted by the purchase of Saks Fifth Avenue last year, narrowed its loss to $13 million Canadian, or U.S. $11.4 million, in the third quarter ended Nov. 1, from $125 million, or U.S. $109.2 million, in the 2013 period.
The Toronto-based retailer said its earnings before interest, taxes, depreciation and amortization on a normalized based rose to $116 million [US $101 million] compared to $63 million [US$55 million] a year ago.
Sales grew 94 percent to $1.9 billion [US$1.7 bilion], from $984 million [US $849 million], largely through the Saks acquisition. Comparable-store sales rose 2.7 percent.
Same-store sales at the department store group, which includes Hudson’s Bay in Canada and Lord & Taylor in the U.S., increased 1.7 percent. Saks Fifth Avenue’s same-store sales rose 1 percent. Saks Off 5th outlets saw its same-store sales increase 19.2 percent.
“We are pleased with our third quarter financial performance,” stated Richard Baker, HBC’s chairman and chief executive officer. “We remain on track with our integration of Saks and continue to gain traction on our strategic growth initiatives, especially at HBC Digital where we experienced substantial sales growth. We are well-positioned for the holiday shopping season with a value proposition underpinned by differentiated merchandising and superior customer service initiatives across all our banners. We remain confident in achieving our financial performance targets for fiscal 2014.”
Baker cited five core strategies: driving digital sales, growing Off 5th, bringing Saks Fifth Avenue and Off 5th to Canada, “outsized growth” at top doors, and driving synergies and efficiencies across the business.
As reported last November, HBC completed a US$1.25 billion, 20-year mortgage on the ground portion of the Saks Fifth Avenue flagship in Manhattan to reduce debt and strengthen the balance sheet. The company said the flagship was appraised at US $3.7 billion. HBC purchased Saks last year for US $2.9 billion, including debt.
The best performing categories last quarter at the department store group were men’s apparel, ladies’ shoes, cosmetics and TopShop/TopMan stores. Sales growth at Saks Fifth Avenue was led by menswear, accessories and fragrances. Sales growth at Off 5th was strong across the majority of categories, the company said.
The retailer noted that it should meet 2014 guidance of between $7.8 billion [US$6.8 billion] and $8.1 billion [US$7.1 billion] and normalized earnings of between $580 million [US$507 million] and $620 million [US$542 million.]