Hudson's Bay Co reports 43.2% CAPEX growth and 36.6% Revenue growth
04.04.2016 • About Hudson's Bay Co (
$HBC) • By InTwits
Hudson's Bay Co reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hudson's Bay Co is a growth stock: FY2016 revenue growth was 36.6%, 5 year revenue CAGR was 24.6% at FY2016 ROIC 10.1%
- EBITDA Margin is quite volatile: 10.2% in FY2016, 10.0% in FY2015, 3.4% in FY2014, 5.5% in FY2013, 7.8% in FY2012
- Hudson's Bay Co has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's in pair with industry average of 4.9%.
- CAPEX is quite volatile: 610 in FY2016, 426 in FY2015, 292 in FY2014, 159 in FY2013, 144 in FY2012
- The company has business model with average profitability: ROIC is at 10.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hudson's Bay Co ($HBC) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,850 | 4,077 | 5,223 | 8,169 | 11,162 | 36.6% |
| Gross Profit | 1,544 | 1,590 | 2,006 | 3,268 | 4,524 | 38.4% |
| SG&A | 1,347 | 1,370 | 1,826 | 2,759 | 4,066 | 47.4% |
| EBITDA | 302 | 225 | 180 | 817 | 1,142 | 39.8% |
| Net Income | 1,449 | -35 | -259 | 233 | 387 | 66.1% |
Balance Sheet
|
|---|
| Cash | 42 | 48 | 21 | 168 | 507 | 201.8% |
| Short Term Debt | 291 | 132 | 532 | 265 | 476 | 79.6% |
| Long Term Debt | 902 | 719 | 2,923 | 2,859 | 3,229 | 12.9% |
Cash flow
|
|---|
| Capex | 144 | 159 | 292 | 426 | 610 | 43.2% |
Ratios
|
|---|
| Revenue growth | 3.5% | 5.9% | 28.1% | 56.4% | 36.6% | |
| EBITDA growth | 23.5% | -25.6% | -19.9% | 353.9% | 39.8% | |
| Gross Margin | 40.1% | 39.0% | 38.4% | 40.0% | 40.5% | 0.5% |
| EBITDA Margin | 7.8% | 5.5% | 3.4% | 10.0% | 10.2% | 0.2% |
| Net Income Margin | 37.6% | -0.9% | -5.0% | 2.9% | 3.5% | 0.6% |
| SG&A, % of revenue | 35.0% | 33.6% | 35.0% | 33.8% | 36.4% | 2.7% |
| CAPEX, % of revenue | 3.7% | 3.9% | 5.6% | 5.2% | 5.5% | 0.3% |
| ROIC | 9.5% | 6.3% | 0.1% | 7.9% | 10.1% | 2.2% |
| ROE | 245.0% | -3.6% | -17.0% | 10.3% | 13.9% | 3.6% |
| Net Debt/EBITDA | 3.8x | 3.6x | 19.1x | 3.6x | 2.8x | -0.8x |
Hudson's Bay Co ($HBC) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,072 | 2,038 | 2,566 | 4,486 | 11.7% | 15.2% | 34.1% | 70.4% |
| EBITDA | 74 | 162 | 72 | 834 | -78.4% | 237.5% | -25.8% | 142.4% |
| Net Income | -49 | 59 | 7 | 370 | -127.8% | | | 221.7% |
Balance Sheet
|
|---|
| Cash | 35 | 58 | 292 | 507 | -10.3% | 52.6% | 563.6% | 201.8% |
| Short Term Debt | 406 | 338 | 615 | 476 | -5.1% | -28.4% | -10.7% | 79.6% |
| Long Term Debt | 2,738 | 2,230 | 3,769 | 3,231 | 12.9% | -7.6% | 51.5% | 13.0% |
Ratios
|
|---|
| Gross Margin | 41.2% | 39.5% | 42.2% | 39.7% | 2.6% | -0.1% | 1.1% | -1.3% |
| EBITDA Margin | 3.6% | 7.9% | 2.8% | 18.6% | -14.9% | 5.2% | -2.3% | 5.5% |
| Net Income Margin | -2.4% | 2.9% | 0.3% | 8.2% | -11.9% | 4.9% | 1.0% | 3.9% |
Revenue and profitability
Hudson's Bay Co's Revenue jumped on 36.6%. Revenue growth showed acceleration in FY16Q4 - it increased 70.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 56.1 pp from -5.8% to 50.3% in 2016.
Gross Margin increased slightly on 0.53 pp from 40.0% to 40.5% in FY2016. SG&A as a % of Revenue increased on 2.7 pp from 33.8% to 36.4% in FY2016.
Net Income marign increased slightly on 0.61 pp from 2.9% to 3.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 5.5%. Hudson's Bay Co showed small growth in CAPEX/Revenue of 1.6 pp from 3.9% in FY2013 to 5.5% in FY2016. Average CAPEX/Revenue for the last three years was 5.4%.To fuel this fast growth the company invested a large share of EBITDA (53.4%) to CAPEX.
Return on investment
The company operates at good ROE (13.89%) while ROIC is low (10.14%). ROIC increased on 2.2 pp from 7.9% to 10.1% in FY2016. ROE increased on 3.6 pp from 10.3% to 13.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.8x and Debt / EBITDA is 3.2x. Net Debt / EBITDA dropped on 0.8x from 3.6x to 2.8x in FY2016. Debt jumped on 18.6% while cash jumped on 202%.
Management team
Hudson's Bay Co's CEO Gerald L Storch "Jerry" is a founder and has spent 3 years at the company. Hudson's Bay Co's CFO is Paul V Beesley. Paul V Beesley has 4 years tenure at the company.
Appendix 1: Peers in Consumer, Cyclical
Below you can find Hudson's Bay Co benchmarking vs. other companies in Consumer, Cyclical industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 539.9% | |
| Restaurant Brands International Inc ($QSR) | | | 4.6% | 238.0% | |
| Amaya Inc ($AYA) | 311.5% | 85.2% | 254.0% | 113.8% | |
| NYX Gaming Group Ltd ($NYX) | 65.2% | 52.8% | 45.8% | 91.8% | |
| Rainmaker Entertainment Inc ($RNK) | -24.6% | -45.0% | 30.1% | 56.4% | |
| |
|---|
| Median (49 companies) | 5.3% | 4.9% | 7.8% | 8.6% | |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NYX Gaming Group Ltd ($NYX) | 91.3% | 86.7% | 88.3% | 85.6% | |
| DEQ Systems Corp ($DEQ) | 77.5% | 78.4% | 84.7% | 82.7% | |
| Second Cup Ltd/The ($SCU) | 86.6% | 85.1% | 72.7% | 81.1% | |
| New Look Vision Group Inc ($BCI) | 71.8% | 72.6% | 72.6% | 78.7% | |
| Cara Operations Ltd ($CAO) | | 79.2% | 78.9% | 78.4% | |
| |
|---|
| Median (42 companies) | 34.1% | 31.8% | 31.9% | 30.6% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($WTE) | 49.7% | 65.9% | 60.9% | 59.6% | |
| Gamehost Inc ($GH) | 46.1% | 45.7% | 45.9% | 42.8% | |
| Great Canadian Gaming Corp ($GC) | 16.8% | 41.1% | 40.1% | 36.6% | |
| Restaurant Brands International Inc ($QSR) | | 51.1% | 20.8% | 33.9% | |
| Cara Operations Ltd ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (46 companies) | 7.5% | 9.7% | 10.2% | 9.0% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | 8.2% | 6.7% | 14.8% | 26.7% | |
| WestJet Airlines Ltd ($WJA) | 7.9% | 19.5% | 18.6% | 22.5% | |
| Westshore Terminals Investment Corp ($WTE) | 25.7% | 11.5% | 6.2% | 21.2% | |
| Exchange Income Corp ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | |
| Chorus Aviation Inc ($CHR.A) | 9.9% | 9.6% | 3.9% | 15.0% | |
| |
|---|
| Median (49 companies) | 2.7% | 3.1% | 3.4% | 2.8% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Partner Jet Corp ($PJT) | -51.6% | -50.8% | 85.1% | 51.1% | |
| Westshore Terminals Investment Corp ($WTE) | 24.0% | 37.8% | 35.0% | 38.3% | |
| Cara Operations Ltd ($CAO) | | | 24.7% | 35.1% | |
| Air Canada ($AC) | | 37.0% | 23.2% | 28.4% | |
| BMTC Group Inc ($GBT) | 33.0% | 32.5% | 25.2% | 25.2% | |
| |
|---|
| Median (49 companies) | 9.2% | 9.7% | 9.9% | 7.7% | |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 39.7x | |
| Mountain China Resorts Holding Ltd ($MCG) | | | 317.1x | 29.0x | |
| Rainmaker Entertainment Inc ($RNK) | | | | 18.6x | |
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | |
| AutoCanada Inc ($ACQ) | 4.2x | 4.7x | 6.4x | 8.0x | |
| |
|---|
| Median (38 companies) | 1.6x | 2.0x | 2.4x | 2.7x | |
|---|
