HBC’s Q4 comparable sales decline 1.2 percent

For the fourth quarter ended January 28, 2017, Hudson’s Bay Company (HBC) said on a constant currency basis, consolidated comparable sales decreased 1.2 percent. DSG including Hudson's Bay, Lord & Taylor and Home Outfitters reported comparable sales increase of 0.6 percent, while Saks Fifth Avenue comparable sales increased 0.1 percent.

"On a constant currency basis, digital sales grew by 20.9 percent at our department store banners in the fourth quarter of 2016, and we remain excited about the future of our online business. The efficiency initiative announced today, which focuses on reducing corporate overhead, is expected to save approximately 75 million Canadian dollars annually. We believe this cost reduction initiative will help us mitigate the pressures facing our company and the department store industry as a whole," said Jerry Storch, Chief Executive Officer of HBC in a statement.

Q4 comparable sales down across businesses

For the quarter, HBC Off Price (Saks OFF 5TH and Gilt) comparable sales decreased 5.9 percent, HBC Europe (Galeria Kaufhof, Galeria INNO and Sportarena comparable sales decreased 2 percent. Total digital sales, however, increased 13.3 percent on a constant currency comparable basis. Excluding Gilt, total digital sales increased 20.9 percent. Including the impacts of foreign exchange, consolidated comparable sales decreased 3.7 percent.

HBC said, initial savings from the company's ongoing comprehensive operational review are expected to offset some of the pressures facing the business in fiscal 2017. These pressures include the channel shift from higher margin in-store sales to lower margin on-line sales. The company feels, this margin pressure is expected to improve over time, as the company continues to invest in its digital supply chain, reduces expenses related to its digital operations, adopts best in class technology and introduces store centric all-channel delivery options.

The company also announced today that its Board of Directors has approved a quarterly dividend to be paid on April 14, 2017, to shareholders of record at the close of business on March 31, 2017. The dividend is in the amount of 0.05 Canadian dollar (0.04 dollar) per common share.

Picture:Saks Fifth Avenue, Proenza Schouler