Hudson's Bay Shares Hit Record Low as Holiday Sales Disappointby and
Increasing discounts, currency headwinds hampered results
Results follow disappointing holiday sales at Macy’s, Kohl’s
Hudson’s Bay Co., the Canadian department-store giant that owns Saks Fifth Avenue and Lord & Taylor, suffered its worst stock decline since going public after a dismal holiday season weighed on its sales forecast.
The company now expects sales of C$14.4 billion ($10.9 billion) to C$14.6 billion this fiscal year, according to a statement on Monday. It had previously forecast as much as C$14.9 billion for the period, which runs through January.
The outlook follows a same-store sales decline of 0.7 percent during the last nine weeks of the calendar year, when the company was counting on Christmas shoppers to fuel growth. The broader department-store industry had a disappointing season, with a shift to e-commerce and specialty shops weighing on sales. Macy’s Inc., the market leader, cut its forecast last week and pushed ahead with a plan to cut about 10,000 jobs.
“While we were pleased with our performance at Hudson’s Bay in Canada, the retail environment has remained challenging in the U.S. and Europe,” HBC Chief Executive Officer Jerry Storch said in the statement. He blamed heavy discounting and the decline of the euro against the Canadian dollar, which has hurt the value of sales coming from Europe.
The stock tumbled 13 percent to C$10.16 in Toronto, marking its biggest one-day decline since its initial public offering in 2012. The shares, which are the worst performer in the S&P/Toronto Stock Exchange Composite index this year, are now trading at a record low.
HBC isn’t the only retailer bringing bad holiday tidings this week. Ascena Retail Group Inc. cut its outlook after slow customer traffic forced the company to deepen discounts. Shares of the retailer, which owns the Ann Taylor women’s apparel brand, plunged 10 percent to $5.41.
“We are positioning our full-year outlook assuming that the trend we experienced through holiday continues,” Ascena CEO David Jaffe said in a statement Tuesday.
Last week, Macy’s, Kohl’s Corp. and J.C. Penney Co. all reported slow holiday sales. Neiman Marcus Group, meanwhile, abandoned its plans to go public.