Hudson's Bay 'Not Pleased' With Itself

(RTTNews) - Hudson's Bay Co. (HBC.TO) Wednesday reported a fourth-quarter profit that fell short of Wall Street estimates, after same-store sales at European and discount operations were weak.

"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," HBC executive chairman Richard Baker said in a statement.

"Our valuable real estate assets provide HBC with a solid financial base, and the recent agreement to sell the Lord & Taylor flagship building further demonstrates our ability to monetize these assets and enhance liquidity. We are also working to better position our retail operations, and have made several key leadership appointments which we believe will help drive business performance," he added.

Recently, HBC hired Helena Foulkes, a former executive with the CVS pharmacy chain, as its new Chief Executive Officer.

"HBC is a unique company with iconic banners and a storied history. I've spent the past six weeks visiting our stores and offices around the world, and it is clear to me that there is significant opportunity to build upon our solid foundation to realize the full potential of our business," Foulkes said.

Retail sales rose 2.1 percent to C$4.70 billion from C$4.60 billion, primarily reflecting an extra week compared with last year. Comparable sales fell 2.4 percent.

Comparable sales at Saks Fifth Avenue increased 2.1 percent, while Department Store Group, including includes its Hudson's Bay, Lord & Taylor and Home Outfitters, comps dropped 2.6 percent. HBC Europe comparable sales fell 3.4 percent, while HBC Off Price saw comparable sales decline 7.6 percent.

Hudson Bay, like most of its competitors, has been struggling to improve sales and increase traffic to its department stores, as customers now prefer to shop online.

Hudson Bay reported fourth-quarter profit of C$84 million or C$0.39 per share, compared to a net loss of C$152 million or C$0.83 per share last year. Results for the quarter reflect a C$181-million tax gain resulting from U.S. tax reforms.

Normalized net earnings for the quarter were C$0.09 per share, up from C$0.01 per share last year. Analysts polled by Thomson Reuters estimate earnings of C$0.60 per share and revenues of C$4.50 billion.