VANCOUVER, Canada — Department store operator Hudson's Bay Co reported a smaller-than-expected quarterly profit as expenses soared and sales at established Saks Fifth Avenue stores dropped.
The company's cost of sales rose 74 percent in the fourth quarter ended Jan. 30, while its selling, general and administrative expenses almost doubled.
Saks Fifth Avenue, the company's luxury chain, reported a 1.2 percent drop in sales in stores open at least 13 months on a constant currency basis, due to high competition.
Hudson's Bay raised its 2016 sales forecast to C$14.9 billion-C$15.9 billion from C$14.2 billion-C$15.2 billion to reflect the revenue from online luxury retailer Gilt Groupe Holdings Inc, which it bought in January.
The company, whose roots in Canada date back to 1670, said online sales in the fourth quarter rose 61.6 percent.
The company's total retail sales rose to C$4.49 billion in the quarter from C$2.63 billion a year earlier, helped by the 2.8 billion euros acquisition of German department store operator Kaufhof.
Net profit rose to C$370 million ($283 million), or C$1.88 per share, from C$115 million, or 62 Canadian cents per share.
Excluding items, Hudson's Bay posted a profit of 79 Canadian cents per share, lower than the average analyst estimate of 99 Canadian cents, according to Thomson Reuters I/B/E/S.
By Anet Josline Pinto; editors: Maju Samuel and Don Sebastian.