Retailer Hudson's Bay raises sales forecast on Kaufhof deal close
(Reuters) - Hudson's Bay Co said it expects sales and earnings for the fiscal years ending in January 2016 and 2017 to "increase significantly" following cost cuts and acquisition of the German department store chain Galeria Kaufhof.
The Canadian department store operator raised its sales forecast for the current fiscal year to a range of C$11 billion to C$11.5 billion ($8.2 billion to $8.6 billion) from C$9 billion to C$9.3 billion.
The company on Tuesday revealed plans to cut 265 corporate jobs and reduce costs by C$75 million, as it streamlines its North American operations.
Hudson's Bay, which also expects to gain from opening of new stores in North America including Saks and Saks Off 5th in Canada, forecast sales of C$14.5 billion to C$15.5 billion for fiscal 2016.
The company now expects adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to rise to C$850 million to C$925 million for the current fiscal year, from C$612 million for the fiscal year ended January 2015.
The company also expects adjusted EBITDA to rise to the range of C$950 million to C$1.1 billion for fiscal 2016.
Hudson's Bay closed the previously announced 2.8 billion euros deal to buy the Kaufhof chain on Wednesday.
The Canadian store operator's shares rose as much as 10.4 percent to C$22.88 on Wednesday on the Toronto Stock Exchange. The stock had fallen 15.6 percent this year.
(Reporting by Shubhankar Chakravorty in Bengaluru; Editing by Shounak Dasgupta)
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