Hudson's Bay Company reported its results for the 13-week period ended May 4, 2013 (the "first quarter"). The first quarter was characterized by strong same-store sales growth at Hudson's Bay, partially offset by a low single digit same-store sales decline at Lord & Taylor. By managing its gross profit rate and operating expenses, the Company delivered solid Normalized EBITDA growth.
First Quarter Highlights (13-week period ended May 4, 2013)
- Consolidated sales increased 4.2% to $884.0 million compared to the first quarter of 2012.
- Same store sales:
Consolidated same store sales grew 4.0%, or 3.2% on a constant currency basis.
Hudson's Bay same store sales grew 7.6%.
Lord & Taylor same store sales declined 1.4% on a U.S. dollar basis.
- E-commerce sales were $31.1 million, an increase of 32.8% compared to the first quarter of 2012.
- Normalized EBITDA was $31.0 million, an increase of $4.9 million compared to the first quarter of 2012.
- Normalized net loss was $0.12 per share compared to a loss of $0.22 per share in the first quarter of 2012.
- A dividend of $0.09375 per common share was declared, payable on July 15, 2013 to shareholders of record on June 28, 2013.
"We are pleased with our first quarter performance," stated Richard Baker, Hudson's Bay Company's Governor and Chief Executive Officer. "Our strong sales growth can be attributed to several factors, including improvements in store productivity, increased e-commerce sales, and our partnership with Topshop/Topman. These strategic initiatives drove gains at Hudson's Bay, which continues to outperform its competitors. At Lord & Taylor, our sales performance was impacted by unfavourable year over year weather patterns."
Financial Results
Retail sales were $884.0 million for the 13-week period ended May 4, 2013, an increase of $35.8 million or 4.2% from $848.2 million for the 13-week period ended April 28, 2012. Consolidated same store sales grew 4.0% in the first quarter, or 3.2% on a constant currency basis. Hudson's Bay same store stores grew 7.6%, and same store sales at Lord & Taylor declined 1.4% on a U.S. dollar basis.
Sales at Hudson's Bay were driven by strong performance of men's apparel, ladies' shoes, cosmetics, handbags, accessories and certain home categories, the continued growth of e-commerce sales and our five Topshop/Topman stores.
Sales at Lord & Taylor were impacted by lower customer traffic due to unfavourable weather trends compared to the first quarter of 2012, with strength in men's apparel, handbags, accessories and cosmetics offset by underperformance of ladies' apparel and shoes. Reflecting the Company's strategic focus on growing its e-commerce channel, online sales contributed strongly to sales growth in the quarter, rising 32.8% to $31.1 million.
Gross profit was $356.2 million, or 40.3% of retail sales, for the 13-week period ended May 4, 2013 compared to $341.1 million, or 40.2% of retail sales, for the 13-week period ended April 28, 2012. Gross profit increased due primarily to sales growth at Hudson's Bay.
Normalized EBITDA was $31.0 million in the 13-week period ended May 4, 2013 compared to $26.1 million in the 13-week period ended April 28, 2012, an increase of $4.9 million. The increase in Normalized EBITDA was primarily due to an increase in sales and gross profit, partially offset by higher SG&A.
Normalized net loss from continuing operations for the 13-week period ended May 4, 2013 was $14.3 million, a $9.0 million improvement from a loss of $23.3 million in the 13-week period ended April 28, 2012.
Normalized net loss per share was $0.12 in the first quarter compared to a normalized net loss of $0.22 per share in the 13-week period ended April 28, 2012.
