HBC posts 2nd quarter sales growth, deeper net loss

Hudson's Bay Co. on Tuesday reported higher second-quarter retail sales, led by digital growth.

The company said after the close of stock market that its retail sales increased 1.2 per cent to$3.3 billion.

HBC said the sales increase stemmed mainly from the opening of three newSaks Fifth Avenuestores, 26 new Saks OFF 5TH stores and five new Saks OFF 5THEuropestores. The company said those store openingscontributed approximately$64 million in sales.

• Hudson's Bay steps outside Canada with its flagship brand in the Netherlands

However, that boost wasoffset by lower overall comparable sales of approximately$43 millionand a$41 millionimpact from store closures.

HBC said its digital sales were up 12.7 per cent from the prior year.

The company's net loss for the quarter for the quarter was $201 millioncompared to$142 millionin the same period of last year. HBC attributed the largernet loss primarilyto lower gross margins along with higher expenses for sales and administration, along withdepreciation and amortization.

The venerable company announced back in June that it was cutting 2,000 jobs amid a reorganization. The firm has also been under pressure recently from a minority shareholder that has called on HBC to monetize some of the value in its real estate.

• Hudson's Bay to review options, including privatization, after activist pressure: report
• Hudson's Bay Company cutting 2,000 jobs amid reorganization

HBC management offered a positive take on where the company currently stands.

"Heading into the fall season, we are optimistic about the remainder of the year," Richard Baker, HBC's governor and executive chairman, said in a release.

"The current retail environment provides both challenges and opportunities, and while it was a tough second quarter as expected, we continue to make the smart decisions necessary to succeed in this rapidly evolving landscape," he said.

HBC said it anticipates realizing more than$350 millionin annual savings when its reorganizationplan is fully implemented by the end of its 2018 fiinancial year.