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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe rebound taking shape in parts of the retail industry eluded the owner of the Saks Fifth Avenue and Lord & Taylor department stores, which failed over the holiday season to reverse a decline in same-store sales.
Hudson’s Bay Co. reported fourth-quarter earnings on Wednesday that missed analysts’ estimates. The company blamed its European chain, discount banners, Lord & Taylor and a cost-cutting plan for the drop in the closely watched same-store sales metric. The results sent the shares down more than 5 percent Wednesday morning. They had already dropped 24 percent this year through Tuesday’s close.
Hudson's Bay operates a Saks Fifth Avenue store in Indianapolis at the Fashion Mall at Keystone. The company also has significant investments in real estate in partnership with Indianapolis-based mall giant Simon Property Group Inc. through its Global Properties Joint Venture, which owns properties in the United States and Germany. Hudson's Bay said it took a loss of $15 million from the joint venture in its latest quarter.
The company posted its first profit in eight quarters but the results missed analyst expectations. The $65.2 million ($84 million Canadian) profit was primarily due to a tax benefit on recent U.S. tax reforms, the company said. Consolidated same-store sales dropped 2.4 percent, but were up 2.1 percent at Saks stores. Revenue rose 2.1 percent, to $3.7 billion.
“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,” Hudson’s Bay Chairman Richard Baker said in a statement.
Hudson’s Bay has axed 2,000 jobs, reorganized management and centralized e-commerce operations under a plan to win back customers, who are increasingly turning away from department stores in favor of online retailers like Amazon.com Inc. The Toronto-based company, which is also facing a restless activist investor, agreed last year to sell its iconic Lord & Taylor building in Manhattan and unload a minority share to a private equity firm to reduce debt.
Last month, it named former CVS Health Corp. executive Helena Foulkes its first female CEO.
Some competitors fared better during the holiday, with Macy’s Inc. posting a surprise sales gain and predicting that the momentum would extend into 2018, and Neiman Marcus Group Ltd. reporting a second straight quarter of sales growth. J.C. Penney Co. sales rebounded over the crucial end-of-year period, but the bounce fell short of analysts’ estimates.
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