Hudson’s Bay Co. has reported a sharp increase in both fourth-quarter and full-year net earnings as the department store group got a big boost from the sale of real estate investments.
The company, whose banners include Hudson’s Bay, Lord & Taylor and Saks Fifth Avenue among others, said net earnings in the three months ended Jan. 30 was $370 million.
That was up from $115 million in the comparable year-earlier period as the company realized $516 million on the sale of investments in its real estate joint venture.
Revenue soared 70.4% to $4.486 billion from $2.632 billion, primarily as a result of the addition of HBC Europe following the close of its Galeria acquisition last September.
On a constant currency basis, HBC said consolidated comparable store sales — an important metric in retail — increased by 1.8% for the quarter and 2.5% for the year.
For the full year, net earnings totalled $387 million, up from $233 million in fiscal 2014. Full-year consolidated retail sales were $11.162 billion, up 36% from $8.169 billion, also primarily attributable to the addition of HBC Europe.
“The diversity of our banners in terms of geography and consumer segment helped us navigate a challenging retail environment and resulted in 2015 comparable store sales growth of 2.5% on a constant currency basis,” Richard Baker, HBC’s governor and executive chairman, said in a statement accompanying the results.
Baker said with the closing of the Galeria acquisition, the largest department stores in both Germany and Belgium were now part of the HBC family. Meanwhile, the subsequent sale of a portion of the company’s equity in HBS Global Properties was used to delever its balance sheet.
“This is just one example of how we are able to utilize our real estate holdings to enhance our financial flexibility,” Baker said.
