Saks Fifth Avenue Owner HBC Plummets After Cutting Forecast
By Nick Turner and Lindsey Rupp, Bloomberg News
Hudson’s Bay Co., the Canadian department-store giant that owns Saks Fifth Avenue and Lord & Taylor, suffered its worst stock decline in more than a year after a dismal holiday season weighed on its sales forecast.
The company now expects sales of $14.4 billion to $14.6 billion this fiscal year, according to a statement on Monday. It had previously forecast as much as $14.9 billion for the period, which runs through January.
The outlook follows a same-store sales decline of 0.7 percent during the last nine weeks of the calendar year, when the company was counting on Christmas shoppers to fuel growth. The broader department-store industry had a disappointing season, with a shift to e-commerce and specialty shops weighing on sales. Macy’s Inc., the market leader, cut its forecast last week and pushed ahead with a plan to cut about 10,000 jobs.
“While we were pleased with our performance at Hudson’s Bay in Canada, the retail environment has remained challenging in the U.S. and Europe,” HBC Chief Executive Officer Jerry Storch said in the statement. He blamed heavy discounting and the decline of the euro against the Canadian dollar, which has hurt sales coming from Europe.
The stock tumbled as much as 13 percent to C$10.16 in Toronto on Tuesday, marking its biggest intraday decline since December 2015. The shares are now trading at the lowest level since their initial public offering in 2012.
HBC isn’t the only retailer bringing bad holiday tidings this week. Ascena Retail Group Inc. cut its outlook after slow customer traffic forced the company to deepen discounts. Shares of the retailer, which owns the Ann Taylor women’s apparel brand, plunged as much as 16 percent to $5.07.
“We are positioning our full-year outlook assuming that the trend we experienced through holiday continues,” Ascena CEO David Jaffe said in a statement Tuesday.
Last week, Macy’s, Kohl’s Corp. and J.C. Penney Co. all reported slow holiday sales. Neiman Marcus Group, meanwhile, abandoned its plans to go public.