HBC Bad Earnings, Low Share Price Innovation

According to the world clothing shoes and hats net, March 28th: in North America and Europe, there are many department stores.

Canadian Hudson 's Bay Co. (TSE:HBC)

The group (hereinafter referred to as HBC) achieved its first net profit in the four quarter, but its profit was not up to standard, and sales did not rebound with the retail sales.

The group's stock price fell to a record low of $5.9% to $8.03 on Wednesday, 28.

During the holiday season, the same store sales of high-end Saks Fifth Avenue department store grew by 2.1%, and the growth in three consecutive quarters, and Canada's Hudson 's Bay department store grew for another thirtieth quarters.

However, passenger flow and sales of Lord & Taylor, discount business and European Division continued to be weak.

The DSG Department covering Hudson 's Bay department store and Lord & Taylor was dragged down by the latter, and the same store sales fell by 2.6%; the European department with 130 department stores also recorded a 3.4% decline, and the discount department of Saks OFF 5TH and Gilt fell by 7.6%.

Comparable sales in the digital sector increased by 2.8%.

HBC did not disclose earnings data for each business.

The German financial magazine Manager Magazin broke out last week that the German Galeria Kaufhof department, which accounts for most of Europe's business, will again record an annual loss of over 100 million euros.

Even so, HBC rejected the offer of Signa Holding GmbH, which has been coveted by Galeria Kaufhof department in Austria, for up to 3 billion euros in February, despite the fact that Galeria Kaufhof acquired its performance in 2015 after being purchased by the HBC with debt of 2 billion 500 million euros.

In the fourth quarter, HBC's overall same store sales decreased by 2.4% compared with the same period last year, while retail sales benefited from an additional week's sales and 3 new stores during the year, with an annual growth of 2.1% to 4 billion 695 million Canadian dollars.

With the tax interest of 154 million yuan, the group can turn a profit, net profit is 84 million yuan, or the profit per share is 0.39 Canadian dollars. During the period, the group made a non cash goodwill note to the discounted electricity supplier Gilt trademark which was purchased in 2016 for 250 million US dollars. The net loss in the previous year was 152 million yuan, or the loss per share was 0.83 yuan.

Adjusted earnings per share were 0.09 Canadian dollars, far less than the market expectations of 0.47 Canadian dollars.

During this holiday season, Saks Fifth Avenue's main rivals Neiman Marcus Group Ltd. Nyman Markus and Nordstrom Inc. (NYSE:JWN), North de dragon, continue to gain same store sales growth.

Macy Messi Inc. (NYSE:M), the largest department store retailer in the US, unexpectedly rebounded and looked forward to a good prospect. J.C. Penney Co. (NYSE:JCP) also had positive performance in Penny's department store. It shows that HBC runs on the whole in the overall performance of Messi.

HBC executive chairman Richard Baker said in the earnings report that he was not satisfied with the recent performance. He pointed out that the group would continue to cash in the value of the real estate portfolio and take measures to improve its performance.

To cope with the difficult retail environment and changing consumption habits, HBC, with its huge sales network, has cut 2000 jobs, reorganized its management, streamlined its structure, and focused its resources on the development of e-commerce, hoping to win over consumers. The Group expects these measures to save 350 million yuan in the current 2018 fiscal year.

In February, the group appointed the first female CEO, the Helena CVS, former chief executive officer of CVS CVS, the pharmacy department of the US Health Corp. (NYSE:CVS). She pointed out that Lord and Taylor and discount business obviously failed to meet expectations in today's earnings conference call, and management is evaluating every aspect of each business to improve performance.

As of February 3rd, HBC, the oldest business in Canada, had 483 department stores in Europe and the United States, with a total net increase of 3 stores throughout the year.

The group plans to open 10 stores this year, while closing 9 department stores including 4 Lord & Taylor and 1 Hudson 's Bay.

Under the pressure of radical investors, HBC sold the Lord & Taylor flagship store to Fifth Avenue in New York last year for $850 million to share office space start-ups Wework Co. Inc.. The joint venture owned Vancouver central store has also been sold.

In the 2017 fiscal year, the retail sales of HBC were 14 billion 349 million Canadian dollars, which was basically equal to $14 billion 455 million in fiscal year 2016.

The net loss expanded from $516 million to $581 million, and the loss per share rose from $2.83 to $3.04.

Helena Foulkes revealed to analysts that the global stores and offices that have been inspecting HBC for six weeks have been impressed by the sales culture. She believes that the existing group has the right restructuring and growth strategy, but the strategy is not implemented properly. If it is improved, it is expected to achieve better results in 2018.

Hudson 's Bay Co. (TSE:HBC) rebounded in late trading on Wednesday, up 1.06%, to 8.61 Canadian dollars.

Since 2018, the stock has fallen by 26.5%, and its market value has dropped to 1 billion 560 million Canadian dollars.

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