HUDSON’S BAY REPORTS STRONG 2015
Canadian retail giant Hudson’s Bay Co., owner of such stores as Saks Fifth Avenue, OFF 5th and Lord & Taylor, has released its fourth quarter and Fiscal 2015 financial results. (Figures are reported in Canadian dollars.)
For the fourth quarter, which ended on January 30, 2016, consolidated sales (which include digital sales from all banners) increased 70.4 percent to $4.5 billion; consolidated comparable store sales increased 11 percent, and were up 1.8 percent, on a constant currency basis; total digital sales increased by 61.6 percent, adjusted EBITDAR increased 61.1 percent to $630 million; and net earnings increased by $255 million to $370 million.
For Fiscal 2015, consolidated retail sales were $11,162 million, up 36.6 percent from $8,169 million in the prior year, while consolidated comparable store sales increased by 2.5 percent, and adjusted EBITDAR was $1,211 million, an increase of 40.7 percent.
“I am proud of HBC’s many accomplishments in 2015,” said Richard Baker, HBC governor and executive chairman. “The diversity of our banners in terms of geography and consumer segment helped us navigate a challenging retail environment. We continued our track record of making targeted retail acquisitions with the closing of the GALERIA acquisition on September 30th which we expect to grow the company’s revenue by approximately 50 percent. Subsequent to the GALERIA acquisition, we sold a portion of our equity in HBS Global Properties, our global real estate joint venture, and used the proceeds to deliver HBC’s balance sheet. This is just one example of how we are able to utilize our real estate holdings to enhance our financial flexibility. I am very thankful to the entire HBC team for their achievements in 2015.”
For Fiscal 2016, the company is confirming its Adjusted EBITDAR outlook and increasing its sales guidance to take into account the impact of the Gilt acquisition; EBITDAR is expected to be between $1.56 million and $1.7 million, while sales are expected in the $14.9 billion-$15.9 billion range.
HBC also expects it will make higher than normal investments in growth initiatives, with total capital investments, net of landlord incentives, expected to be between $750 million and $850 million, which is approximately 4.9%-5.5% of the midpoint of the sales outlook. Of these initiatives, 40 percent is expected to be related to store renovations, including the renovation of the Saks Fifth Avenue New York flagship store and renovations to HBC Europe stores; 30 percent is expected to be related to new stores, as HBC plans to open a total of seven Saks Fifth Avenue stores and approximately 32 OFF 5TH stores; and 30 percent is expected to be related to digital and technology investments, including the implementation of robotic automation in the Toronto distribution center and a new internet distribution center in the United States.
