Hudson’s Bay considers the past quarter an improvement, even though turnover is still dropping. "We're a much stronger and more capable company than a year ago," the department store group believes. Nevertheless, HBC is still planning to close a number of stores to boost profits.
Positive cashflow once more
Canadian department store group Hudson's Bay Company (HBC) experienced a 1.4% comparable turnover drop in the past quarter (which ended on February 2nd). Total turnover ended at 2.89 billion Canadian dollars (2.57 billion euros) compared to 3.07 billion Canadian dollars the year before. Net loss increased to 226 million Canadian dollars (201 million euros) compared to a net result of 180 million Canadian dollars in the same quarter of the previous financial year.
Still, the group takes a positive view on the results. "We are a far stronger company today than a year ago, despite some of the top-line challenges this quarter," said the company's CEO Helena Foulkes. "We’ve returned to positive operating cash flow, improved the bottom line across all of our businesses, increased profitability by 30 percent and strengthened our balance sheet."
Gross profit margin goes up
The financial year as a whole ended in a net loss of 631 million Canadian dollars (561.48 million euros). The corrected EBITDA did increase by as much as 63 percent, reaching 426 million Canadian dollars (379 million euros) thanks to the merger with German peer Karstadt. If that joint venture hadn't been made, there would have been a 30 percent increase.
The gross profit margin was 38.9 percent, a slight increase compared to the previous year. Without last year's restructuring costs (as the group closed quite a few loss-making stores), the gross profit margin would have been 39.9 percent, an increase of 110 base points compared to the previous year, where each company unit contributed to the improvement.
Showcasing the value of the company
"We recently completed two significant transactions that showcase the inherent value of the company," said executive chairman Richard Baker. "Our sharpened financial discipline and streamlined focus creates a solid foundation to build upon in 2019," he concluded. This year, the group will be closing all outlets of American chain Home Outfitters as well as twenty stores of outlet chain Saks Off 5th.
Hudson’s Bay Company has a number of outlets in the Netherlands, including both Hudson's Bay and Saks Off 5th stores. Last year, the company entered into a partnership with Karstadt. In Belgium, Galeria Inno is part of the new group.