Gifts Today magazine

HBC reports Q4 2016 results

Hudson’s Bay Company reveals its fourth quarter and fiscal 2016 financial results

Hudson’s Bay Company (HBC) has announced its fourth quarter financial results for the thirteen and fifty-two week periods ended January 28, 2017.

Retail sales were $4,600 million, an increase of Canadian $114 million, or 2.5 per cent, from the prior year. The increase was primarily driven by the addition of Gilt, which generated $177 million in sales during the quarter, as well as the addition of five Saks Fifth Avenue and 32 Saks OFF 5TH stores, which contributed a total of $123 million in sales during the quarter. 

These additions were partially offset by the combination of a negative $110 million foreign exchange impact on the translation of U.S. dollar and Euro denominated sales and lower comparable sales of approximately $42 million at the Company as a whole.

On a constant currency basis, comparable sales grew by 0.6 per cent at DSG and 0.1 per cent at Saks Fifth Avenue, offset by declines of 2.0 per cent at HBC Europe and 5.9 per cent at HBC Off Price, resulting in an overall consolidated comparable sales decline of 1.2 per cent. 

Comparable sales during the quarter were impacted by a highly promotional environment across HBC’s markets. Additionally, sales at Gilt continue to be impacted by lower traffic, while Saks OFF 5TH has experienced lower sales driven in part by the decision to introduce more moderately priced apparel during Fiscal 2016. Saks OFF 5TH is in the process of re-merchandising its product mix to have a higher concentration of products at the top end of its offering range, which is expected to drive increased traffic and conversion as well as a higher overall basket size. This updated product mix is expected to be fully implemented by the third quarter of Fiscal 2017.

Richard Baker, HBC’s Governor and Executive Chairman says: “In 2016 we took important steps to position all of our businesses for industry leadership. Our team remains focused on our all-channel model, anticipating our customers’ evolving needs and adapting to our customers’ expectations both in store and online. 

“We executed on the organic growth of our existing store base and substantially increased our investment in digital. I am very proud of the hard work and dedication of all of our associates, who continue to focus on what matters most: our customers. We believe our winning model of combining world class real estate assets, which are less impacted by short-term trends, with our diverse retail businesses will continue to provide value for the Company and our shareholders.”

Jerry Storch, HBC’s Chief Executive Officer, adds, “The past year was a disruptive one for the retail industry. While the department store sector remains challenging, we are taking decisive action and making the tough decisions to ensure continued performance should the current environment persist. We are cutting expenses, rationalising and reallocating our capital spending, strengthening our balance sheet, and taking other necessary actions. Rest assured, as we remain focused on the continued growth of our Company, we are aggressively positioning HBC to adapt to the changing retail environment.”

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