TORONTO -- Hudson's Bay Company (TSX:HBC) says profits dropped in the fourth quarter as its Lord & Taylor operations in the United States felt the impact of hurricane Sandy.
The Toronto-based retail company, which returned to the public stock markets in November, said net earnings from continuing operations were $93.6 million or 81 cents per share for the 14 weeks ended Feb 28.
That was down $5.6 million from the year-earlier quarter, when net income from continuing operations was $99.2 million or 95 cents per share over 13 weeks.
Adjusted earnings that exclude certain non-recurring items were $99.3 million or 86 cents per share in the most recent quarter, up from $94.8 million a year earlier.
"Sandy inflicted enduring damage and disruption upon the communities where we had stores," said chief executive officer Richard Baker in a conference call.
"As a result, Sandy's impact on sales remained a factor for much of the quarter and resulted in an excess of inventory that subsequently forced us to escalate our clearance efforts."
Baker told analysts that sales continue to be pressured into the first quarter of this year, particularly at its Lord & Taylor stores.
"In our opinion, this sales weakness can be attributed to unseasonably cold weather compared to last year's unseasonably warm weather," he said.
Despite the weather problems, HBC's retail sales were up 6.7 per cent year-to-year due to an extra week of selling, higher online sales and strength at its Canadian stores -- which had a 6.1 per cent increase in same-store sales.
Overall sales grew $86.89 million to $1.386 billion, with the 14th week contributing $50 million of the increase. Online sales accounted for $58 million in the 14-week period ended Feb. 28, up from $35.6 million a year earlier. Lord & Taylor's same-store sales fell 2.9 per cent in U.S. currency.
The company says it expects same-store sales growth of between three and five per cent for the current financial year, which ends in early 2014.
