HBC profit jumps to $111M on strong sales at Saks acquisition
Hudson's Bay Co. saw a sharp increase in profits in its latest quarter as the retail chain had success integrating its recently acquired Saks chain into its business.
HBC's net income jumped to $111 million or 61 cents per share, in the quarter ended Jan. 31. That's a nearly fourfold increase from last year's level, when the Toronto-based department store chain had $29 million of net income or 16 cents per share.
Sales were up about nine per cent, rising to $2.632 billion from $2.407 billion.
Sales were especially strong at Saks, where same store sales increased 2.6 per cent. Saks' outlet line, Saks off 5th, did even better, with same store sales up 12.1 per cent.
Online sales across the chain were also strong, up 35 per cent to $304 million.
Some of HBC's strength came from the falling loonie, because HBC converts U.S. sales at Saks into Canadian dollars in its earnings, which boosts the numbers.
"It's unlikely that the dollar is going to move up as much next year," retail consultant Mark Satov said in an interview. "The question is what are you going to be doing next year?"
While the loonie was certainly a boost, Satov gives the company credit for stronger sales no matter how you slice it. "It's not growing by leaps and bounds but it's not shrinking. In a tough retail environment, that's pretty good."
The company is one of Canada's biggest retailers and has a significant presence in the United States.
It operates a total of 322 stores under the Hudson's Bay, Lord & Taylor and Saks Fifth Avenue, OFF 5th and Home Outfitters brands.
With files from The Canadian Press