Hudson's Bay Swings to Quarterly Loss But Sales Surge Bolstered by Acquisitions

By Maria Armental

Canadian retailer Hudson's Bay Co., which includes such chains as Saks and Lord & Taylor, swung to a second-quarter loss but sales surged, driven by European expansion and the acquisition of online retailer Gilt Groupe.

The year-ago results, however, had been bolstered by a large gain from joint ventures with Simon Property Group Inc. and RioCan Real Estate Investment Trust.

Over all, HBC reported a loss of $142 million Canadian dollars ($110.5 million), or 78 Canadian cents, compared with a profit of C$59 million, or 28 Canadian cents, a year earlier. The year-ago results included a C$133 million gain before taxes tied to the joint ventures.

Retail sales, meanwhile, surged 60% to C$3.25 billion, largely tied to the addition of HBC Europe and Gilt.

Gross profit improved to 41.5% from 39.5% a year earlier, driven by its European expansion and improvements at Sas Off 5th outlet stores.

Fewer promotions at the outlet chain helped profitability, the company said, but lowered sales.

But, citing overall retail environment, HBC said it expects results for the year toward the lower end of its projected C$800 million to C$950 million in earnings before interest, tax, depreciation and amortization on C$14.9 billion to C$15.9 billion in sales.

As part of its European expansion, the Toronto-based company plans to open up to 20 stores in the Netherlands, including its first Hudson's Bay stores outside of Canada.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

September 06, 2016 18:42 ET (22:42 GMT)

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