Saks Woes Send Hudson's Bay Tumbling on Third-Quarter Lossby
Department-store operator Hudson’s Bay Co. fell the most in more than three years after posting an unexpected third-quarter loss, hurt by reduced spending from tourists at its Saks Fifth Avenue chain.
The loss in the quarter through Oct. 31 was 4 cents a share, excluding some items, the Toronto-based company said in a statement after the market closed on Thursday. Analysts had estimated profit of 7 cents a share, on average. While acquisitions helped sales rise 34 percent to C$2.57 billion ($1.88 billion), that still trailed analysts’ C$2.65 billion average projection.
With the weak third-quarter performance, Hudson’s Bay has become the latest department-store company struggling to get consumers to spend, following dismal results from peers Macy’s Inc. and Nordstrom Inc. At Saks Fifth Avenue, the strong U.S. dollar has caused a dropoff spending by foreign tourists in the U.S., especially Canadians, Russians and Brazilians, Hudson’s Bay executives said on a conference call. Unseasonably warm weather and a continued decline in foot traffic at malls also hurt sales, the retailer said.
“The luxury business at Saks Fifth Avenue continues to face headwinds,” Chief Executive Officer Jerry Storch said in the statement. Same-store sales fell 3.6 percent at Saks Fifth Avenue on a constant-currency basis.
Hudson’s Bay, which also owns the Lord & Taylor and Galeria Kaufhof chains, tumbled 13 percent to C$17.40 in Toronto, the biggest drop since shares began trading in November 2012. Hudson’s Bay has now fallen 29 percent this year.