Hudson Group reports record 2019 revenues but warns of COVID-19 impact in ‘20

In a year highlighted by major agreements with food and beverage concessions operator OHM Concession Group and Brookstone stores in U.S. airports, North American travel retailer Hudson Group turned in record full year revenues of $1.95 billion, a 1.5% year-over-year increase, in 2019.

Despite the strong showing in 2019, Hudson Group CEO Roger Fordyce voiced concerns about the impact that COVID-19 is having on world travel and Hudson.

Hudson, a Dufry company, operating more than 1,000 stores in airport, commuter hub, landmark, and tourist locations, reported that turnover increased $4.4 million or 0.9% to $475.8 million for the fourth quarter compared to $471.4 million in the fourth quarter of 2018. Full year turnover increased $29.5 million or 1.5% to $1,953.7 million compared to $1,924.2 million in the prior year.

Full year adjusted EBITDA of $230.6 million was a 3.1% year-over-year decrease; but full year operating profit of $147.4 million was 50.1% above the year before.

“Throughout 2019, we continued to win new contracts and extend existing ones, added exciting new brands to our portfolio…and entered new markets such as Indianapolis and St. Pete Clearwater,” said Fordyce.

“Looking ahead to 2020, we feel well positioned to compete on the robust pipeline of RFP packages and capture additional whitespace opportunities as airports continue to invest in renovating existing terminals and building new ones,” he said.

Recognizing the impact that COVID-19 is having so far in 2020, Fordyce says: “Our thoughts go out to our customers, partners and landlords that have been impacted around the globe.”

Hudson has seen its duty free business, which is approximately 20% of its total sales, decrease over the past eight weeks, primarily from reduced Chinese passenger travel.

But Fordyce points out that duty paid revenue, which represents 80% of Hudson’s total sales, comes from domestic travelers in the U.S. and Canada, and has seen less of an impact.

“However, we are actively monitoring the situation. If travel restrictions, event cancellations and overall concerns about the outbreak continue for a prolonged period and extend more prominently to domestic travel, we could see further impact on sales. While this is a temporary disruption, we are confident in the long-term strength of our business model and the resiliency of the travel retail industry,” he said.