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TORONTO, Canada — Hudson's Bay Co., the Canadian company that owns Saks Fifth Avenue and Lord & Taylor, plunged as much as 8.9 percent in Toronto trading after forecasting lower earnings than analyst had predicted.
Earnings before interest, taxes, depreciation and amortization will be C$580 million to C$620 million ($526 million to $562 million) this year, the Toronto-based company said today after releasing its fiscal 2013 results. Analysts had estimated C$685.9 million on average, according to data compiled by Bloomberg.
“We forecast sales on a conservative side,” Donald Watros, the president of Hudson’s Bay, said in an interview. “We are going to manage our inventory position, and our goal is to expand margins.”
The stock fell 4.1 percent to C$18.05 as of 10:57 a.m. in Toronto. It dropped as low as C$17.15 earlier in the session, marking the biggest intraday decline since the company’s initial public offering in 2012. Before today, the shares had been up almost 5 percent this year.
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The Lord & Taylor chain, which is concentrated in the northeastern U.S., suffered from harsh winter weather last quarter. Saks, a more upscale chain, has benefited from spending by tourists from China, Russia and the Middle East, the company said. Hudson’s Bay plans to open Saks stores in Toronto by the spring of next year.
"The luxury consumer seems to be performing quite well," Chief Executive Officer Richard Baker said in an interview.
By Cotten Timberlake; Editor: Nick Turner
