Higher costs related to its C$2.9 billion ($2.63 billion) acquisition of luxury retailer Saks resulted in a 67% decline in fourth-quarter profit for Canadian department store operator Hudson’s Bay Company.
Net profit came to C$29.1 million during the three months to February 1, down from C$86.8 million in the same period of the prior year.
Selling, general and administrative costs nearly doubled to C$794.7 million in the period from C$360.8 million in the prior year.
The company said the jump was due to an increase in non-cash share based compensation, a decline in non-cash pension income, and higher costs associated with its strategic initiatives.
Finance costs more than doubled to C$38.1 million from C$13.3 million.
A 73.6% sales increase, however, was driven by the inclusion of Saks. Comparable store sales at Hudson’s Bay and Saks grew 5.2% and 3.1% respectively, while Lord & Taylor saw a 1.3% decline.
During the full year, the group’s net loss increased more than six-fold to C$258.1 million from C$35.1 million. But sales surged 28.1% to C$5.22 billion from C$4.08 billion last year.
For fiscal 2014, the company forecasts total sales to be between C$7.8 billion and C$8.1 billion, assuming low-to-mid single-digit consolidated same store sales growth. It also expects capital investments to range from C$380 million to C$420 million.
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