Hudson 3Q and 9 month financial results improve from first half

Hudson Group reported improved sales trends in the third quarter ended Sept. 30, relative to the year-over-year sales results in the second quarter of 2020.

Nevertheless, the COVID-19 impact on the travel retailer’s sales have been significant. Turnover for the three months ended September 30, 2020 decreased from the prior year period by 74.1% to $135.4 million, while net sales declined by 74.4% to $130.9 million. Duty Paid sales have recovered more rapidly than Duty Free sales, due to the limited number of international flights and the continued closure of the U.S./Canada border.

Turnover for the nine months ended September 30, 2020 decreased by 63.6% from the prior year period to $538.6 million, while net sales declined by 63.9% to $521.5 million.

 

Dufry Re-Integration

On August 19, 2020, Hudson announced that it had entered into a definitive agreement with Dufry, its controlling shareholder, in which Dufry would acquire all of the equity interests in Hudson that it does not already own for $7.70 in cash for each Hudson Class A share. Dufry currently owns 57.4% of the Company. Pending Hudson shareholders’ approval and regulatory consent from the respective authorities, the Transaction and the delisting are expected to close in the fourth quarter of 2020.

Upon completion of the Trans-action, Hudson will become an indirect wholly owned subsidiary of Dufry and will be delisted from the New York Stock Exchange.

 

Reopening stores

After temporarily closing more than 700 of its approximately 1,000 stores at the height of the pandemic, Hudson has been gradually reopening stores and bringing back a number of furloughed team members as air and other travel resume. Working in close partner-ship with airports and other land-lords, Hudson has reopened over 300 stores as of October 31, 2020.

While strategically reopening stores as passengers return and when financially prudent to do so,

Hudson has continued to focus on cost savings initiatives and rent waivers and deferrals. This has resulted in significantly reduced cash usage as the year has progressed, decreasing from $92.4 million in the first quarter to $21.1 million in the second quarter, and $14.3 million in the third quarter of 2020.

 

Passenger levels

North American passenger volumes have increased significantly since April and the year-over-year volume trends have improved consecutively each month from May through October. U.S. airport passenger levels were down approximately 65% year-over-year in the month of October, compared to 95% down at the height of the COVID-19 pandemic in April 2020, reports Hudson.

Hudson also opened a number of new stores in the first nine months of 2020: four stores at Salt Lake City International Airport; two New York branded travel convenience stores at the new Arrivals and Departures Hall in LaGuardia and a travel convenience concept at Nashville International Airport. Additionally, Hudson has rolled out vending machines that provide 24/7 access to health and safety supplies, introduced Sunglass Hut shop-in-shops in some travel convenience stores, and expanded self-checkout capabilities to minimize contact and speed up checkout.

Hudson ECO Roger Fordyce, comments, “While the past seven months have been challenging, we’re continuing to position the Company for a strong recovery both in the immediate and long-term by minimizing our cash spend, optimizing our operational efficiency, advancing our digital initiatives, and above all, prioritizing the health and safety of our teams and customers. The progressive improvement in our business is due in large part to the support of our team members, customers, business partners and landlords, for whom we are extremely grateful… we are eager to welcome customers back to our stores as we remain commit-ted to being the Traveler’s Best Friend in the months to come.”

 

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