Hudson's Bay posts wider-than-expected loss on lower retail sales

Hudson’s Bay Co on Wednesday reported a wider-than expected quarterly loss, missing analysts estimates amid lower retail sales, as the Canadian department store operator battled with a challenging retail environment.

The owner of the Saks Fifth Avenue luxury retailer said comparable sales during the quarter were impacted by lower traffic and deeper discounts and the effects of the hurricanes in Texas, Florida and Puerto Rico.

The Toronto-based company reported a net loss that grew to C$243 million ($192 million), or C$1.33 per share, in the quarter ended Oct. 28, from C$125 million, or 69 cents, a year earlier, it said in a statement.

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Analysts had expected a net loss of C$138.2 million, or 76 Canadian cents, according to Thomson Reuters I/B/E/S.
Hudson’s Bay’s total retail sales fell 4.2 percent over the three months to C$3.16 billion, primarily driven by declines in comparable sales at all but its Saks Fifth Avenue and Hudson’s Bay divisions.

Consolidated sales fell 3.2 percent on a comparable basis, the company said, with its off-price unit seeing the biggest decline at 7.6 percent. Digital sales rose 2.1 percent, but the unit was particularly hit by job cuts announced in June, it said.

The quarter included the abrupt departure of Chief Executive Officer Gerald Storch. The company also opened 10 Hudson’s Bay and one Saks Off Fifth stores in the Netherlands.

In October, the company agreed to sell its Lord & Taylor flagship store in Manhattan as it advanced efforts to extract value from substantial real estate holdings amid pressure from activist shareholder Jonathan Litt to improve its stock performance.