• Q3 earnings amount to CAD1m (US$731.5m)
  • Same store sales grow 12.9%
  • Total retail sales up 34.1%

Hudson's Bay Company has moved to a profit in its third-quarter but cut its sales outlook for 2015 and 2016 due to the impact of terrorism incidents on its Belgian and German businesses.

The Canadian retail group said earnings amounted to CAD1m (US$731.5m) in the three months ended 31 October. This compared to a loss of CAD13m in the prior year quarter. 

Same store sales grew 12.9% in the period, and on a constant currency basis increased by 2%. Total retail sales, including digital sales from all banners, reached CAD2.57bn, an increase of 34.1% on last year. Online sales jumped 36.3%.

The company, which bought Germany's Kaufhof department store chain this year in a bid to expand into Europe, said sales in the region were up 6.6%, while sales at Saks Fifth Avenue were down 3.6%. 

Chairman Richard Baker said the third quarter was an important one for the group's retail business as it continues to execute its strategy of delivering operational improvements while growing and diversifying its retail offerings through targeted acquisitions. 

"With the addition of HBC Europe during the quarter, we now generate the majority of our sales outside the US, and have a significant European retail platform from which we can explore additional growth opportunities."

Based on current trends in the overall retail industry environment, the impact of terrorism incidents on HBC's businesses in Belgium and Germany (including store closures), and management's views on the current and anticipated operating environment, the company updated its fiscal 2015 and 2016 outlook.

It now expects 2015 sales of CAD10.7bn to CAD11.2bn from previous guidance of CAD11bn to CAD11.5bn. It also reduced its 2016 sales guidance to CAD14.2bn to CAD15.2bn, from CAD14.5bn to CAD15.5bn.