HBC on Wednesday reported that fourth quarter revenue fell to 2.9 billion Canadian dollars ($2.18 billion), a decrease of CA$167 million from the same quarter a year ago, which included an extra selling week garnering CA$120 million. Excluding that, fourth quarter revenue declined CA$47 million or 1.6% in 2018, according to a company press release. The company boosted net income from CA$84 million a year ago to CA$286 million.
The Canadian department store retailer's comparable sales in the quarter fell 1.4%, with comparable digital sales up 8.7%. By banner in the quarter, Saks Fifth Avenue comps grew 3.9%, its seventh consecutive quarter of comp growth. On a two-year stack, Saks Fifth Avenue comp was 7%. Comps at DSG (Hudson's Bay, Lord & Taylor and now-shuttered Home Outfitters) fell 5.2%, and at Saks Off 5th comps fell 2.1%, but "a substantial year-over-year increase in digital sales" is moderating that decline, the company said.
For the year, HBC revenue reached $9.4 billion for the year as comparable sales declined 0.2%, consistent with 2017, the company also said. Net loss narrowed to $542 million from the $581 million loss the previous year. During the fourth quarter, HBC's store count declined to 342 from 350.
HBC's cost-cutting measures are "not a one-year event," CEO Helena Foulkes declared on a conference call with analysts on Wednesday morning. Most recently the company announced it was shuttering its 37 Home Outfitters furniture stores in Canada, after earlier selling its Lord & Taylor flagship and its Gilt online site and streamlining its European operations.
Those netted cash that helped off-set the disappointment in the company's top-line results. The company is banking on its best-performing retailer, Saks, and has invested in a renovation of its Manhattan flagship that is performing well despite disruptions to holiday sales the construction caused, the company said. HBC also sees strength in its Saks Off 5th off-price fleet, although as many as 20 underperforming stores will be shuttered after a comprehensive review, executives reiterated Wednesday.
Indeed, while the company has made strides in merchandising, its real estate strategy will continue to play a pivotal role in righting its operations. In a statement Wednesday, Richard Baker, HBC's governor and executive chairman and a real estate mogul in his own right, called the company's "ability to identify undervalued real estate with great potential ... a key long-term differentiator."
Correction: A previous version of this post included incorrect language about the number of Saks Off 5th stores HBC will close in the U.S. The company says it will close up to 20 stores.