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HBC revenue totals $2.1 billion in Q1FY19

Jun '19
Pic: Lord + Taylor/HBC
Pic: Lord + Taylor/HBC
The revenue of Hudson's Bay Company (HBC) has totaled $2.1 billion in the first quarter of fiscal 2019, with comparable sales up 0.3 per cent, excluding Home Outfitters and Lord + Taylor currently undergoing a review of strategic alternatives. Saks Fifth Avenue comparable sales went up 2.4 per cent, continuing to deliver industry-leading results.

The first quarter revenue registered a decrease of $72 million or 3.3 per cent primarily due to operating fewer stores than a year ago and the comparable sales decline at Lord + Taylor. As disclosed in May 2019, HBC is pursuing strategic alternatives for the Lord + Taylor operating business, including a possible sale or merger, and is closing Home Outfitters by the end of the second quarter.

“We are seeing progress on a number of crucial fronts from our continued work to fix the fundamentals and reposition HBC for the future,” said Helena Foulkes, HBC CEO. “Strategically, we have simplified the organization and placed a greater emphasis on our North American retail operations. We are exercising financial discipline while making the necessary investments to capitalize on our greatest opportunities - Hudson’s Bay and Saks Fifth Avenue. Once the European transactions are complete, we will have finished two real estate transactions at near or better than our estimated equity values. The real estate transactions and our pursuit of strategic alternatives for Lord + Taylor, further demonstrate the bold actions we’ve taken to move the company forward and we are optimistic about our prospects.”

First quarter gross profit declined year-over-year by $48 million, which was offset by a $54 million decrease in selling, general and administrative expenses (SG&A).

"Saks Fifth Avenue’s commitment to the luxury customer continues to payoff with widespread sales increases across key merchandise categories and locations, as well as among our top customers. Our New York City clients have embraced the flagship's new main floor, which redefines the luxury shopping experience with a one-of-a-kind handbag assortment featuring exclusive products and brands only available through Saks. For Hudson’s Bay, we had some quick wins in service and marketing which led to sequential improvements in our comps during each month of the quarter. We are incrementally more confident that our post-holiday diagnosis was correct and our fall assortment will better match our customers’ expectations of Hudson’s Bay. While we have more work to do fixing the fundamentals and strengthening operations, we will continue to create experiences that customers love,” Foulkes continued.

Gross profit margin was 39.0 per cent in the first quarter, down 90 basis points year-over-year. Approximately half of the decline is due to store closures, with the balance driven by a higher proportion of clearance sales in this year’s first quarter. SG&A margin improved by 120 basis points to 38.8 per cent, which includes the savings from a lower store count, including rent. (RR)

Fibre2Fashion News Desk – India

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