Canadian Department Store Hudson 'S Bay Expanded In The First Quarter

As report goes:

Hudson s Bay Co. (TSX: HBC), Hudson Bay Group, has benefited from recent M & A in the recent quarter, better than expected revenue from the market, but the loss widened year after year.

In the first quarter of April 30th,

The net loss of Co. Hudson Bay Group doubled to $97 million from $47 million in the same period last year, and the diluted share loss rose from $0.27 to $0.53.

Excluding adjusted expenditure and other items, the adjusted diluted share loss was $0.50, far less than the market expected $0.36.

During the period, the group began to voluntarily reorganize the European operations including the German Galeria Kaufhof department and the Belgium Inno department store, and outsourced IT IT system maintenance in North America to reduce the annual expenditure of $16 million. The group did not disclose the number of Posts affected by this policy.

The above measures cost about $21 million, of which $12 million is recorded in the first quarter.

In addition, the rental of HBS Global Properties, a newly established real estate joint venture, has a greater pressure on earnings.

Therefore, the group thinks that the profit before EBITDAR interest rate depreciation and amortization is the best way to reflect its operating status.

In the first quarter, the index increased by 44.1% to 251 million yuan a year, compared with 174 million yuan in the same period last year.

The negative impact of the real estate joint venture on adjusted EBITDA will be 61 million Canadian dollars. The group pointed out that with the increase of income in the peak season of sales in the second half of this year, the impact of rent will be weakened.

Over the past year, the European Union and the US flash buying Gilt Group Inc. have increased the quarterly revenue of Hudson 's Bay Co., Hudson Bay Group by 59.4% to 3 billion 303 million Canadian dollars, which is better than the market expectation of US $3 billion 280 million.

The same store sales grew by 4.4%, but after the exchange rate was dropped, a 1% decrease was recorded, mainly because the same store sales of Saks Fifth Avenue and discount Off HBC Price fell 5.7% and 4.1% respectively.

According to reporters' observations on us department stores,

The weakness of Saks Fifth Avenue is expected, but the performance of HBC Off Price is surprising.

Hudson 's Bay Co. Hudson Bay Group points out that the Saks Off 5th in the discount department has changed the pricing strategy to reduce the discount rate, which directly weakens the consumer's willingness to consume. This performance confirms the trend of the Zero selling industry which consumers demand for costumes and other non essentials.

However, reducing the discount will help to improve profitability. In the first quarter, the gross profit margin of the group increased by 70 basis points to 41.9%.

Although Macy 's Inc. (NYSE:M) Messi general store group and Nordstrom Inc. (NYSE:JWN) Nord, and other North American counterparts have all lowered their annual profit forecasts due to sluggish sales, Hudson' s Bay Co. Hudson Bay Group still maintains revenue and profit targets.

Following last year's acquisition of Germany's Galeria Kaufhof department store for the first time in Europe after spending 2 billion 825 million euros, the Hudson 's Bay Co. Hudson Bay Group announced last month that it will deepen its expansion in Europe. In the next two years, it will open 20 Hudson' s Bay Hudson Bay Department stores (17) in Holland and Saks Off Saks (Amsterdam) discount department store (3). The first one will be located in Amsterdam's "Hon" Hudson Bay department store, which is scheduled to open in summer.

The investment budget for Holland expansion is 300 million euros, which will create 2500 store posts and 2500 construction jobs.

The Group Executive Chairman, Richard Baker, said in a notice that stepping into Holland is a natural extension of the existing Belgian business, plus Belgium's Inno department's entry into Luxemburg's plan, when the group will be able to complete its layout in the entire Benelux region.

Hudson's s Bay Co. Hudson Bay Group's aggressive takeover and expansion plan has led to high costs, causing market concerns.

However, CEO Jerry Storch Storch believes that the group's advantages in diversification and penetration in different consumer fields are the advantages of the group. He points out that the group has strong performance in Canada and Europe, and that Saks Off 5th can produce better profits.