Hudson's Bay fights back weak sales trend

Weak traffic at Saks 5th Avenue stores did not keep Hudson's Bay Company from reporting higher sales and profit in the third quarter.



For the third quarter ended Oct. 31, the company posted a profit of $1 million, compared with a $13 million loss a year earlier. Total sales increased 34% to $2.57 billion, up from $1.91 billion. Consolidated sales growth was 34.1%, up $653 million from prior year with same-store sales growth of 12.9%. But Saks Fifth Avenue logged a same store sales decrease of 3.6%.



“We are pleased with our third quarter results in a difficult operating environment," said Jerry Storch, HBC’s CEO. "We grew sales in both our stores and on the internet, and our results reflect the benefits of our focus on SG&A and the diversity of our retail business in both geography as well as consumer segment. In particular, our Department Store Group performed extremely well given overall market conditions. HBC Europe and OFF 5TH segments also saw solid growth, while the luxury business at Saks Fifth Avenue continues to face headwinds. The biggest single factor is the decline in tourist traffic, due to the significant appreciation of the U.S. dollar.”



HBC cut its sales forecasts for 2015 and 2016, citing the impact of terrorism incidents on its businesses in Belgium and Germany. The company bought Germany's Kaufhof department store chain in June from Metro for 2.8 billion euros to expand into Europe and is planning more acquisitions.



During the third quarter the company opened six new Off 5th stores. The company now operates more than 460 stores around the world.