Executive Summary

• Hudson’s Bay Company (HBC) reported 1Q18 adjusted EPS of C$(1.22), down from C$(1.15) in the year-ago period and below the C$(0.76) consensus estimate. Revenues were C$3.09 billion, up C$30 million, or 1.0%, from the year-ago quarter.
• Total comps were down 0.7% on a constant-currency basis, driven by a 6.6% decline at HBC Europe, a 3.5% decline at Saks OFF 5TH and a 0.6% decline at DSG (Hudson’s Bay, Lord & Taylor and Home Outfitters). These declines were partially offset by a 6.0% comp increase at Saks Fifth Avenue and a 7.7% increase in HBC’s digital business.
• The company announced the divestment of online banner Gilt Groupe to Rue La La and said that it plans to close up to 10 Lord & Taylor stores—including the flagship Manhattan location—through 2019.