USA. North American travel retailer Hudson Group announced record turnover of US$1.8 billion in 2017, up +6.8% year-on-year. Organic sales increased +8.8%. EBITDA surged +10.4% to US$173 million.
Hudson revealed its fourth quarter (Q4) and full-year results for the period ended 31 December 2017 following the earlier full-year results announcement from parent company Dufry.
Moodie Davitt snapshot: Hudson full-year 2017 results – Record turnover of US$1.8 billion, up +6.8% – EBITDA increases +10.4% – Sales (organic) up +8.8% – Like-for-like sales growth of +4.8% – Q4 sales rise +8.5% – 13 concessions won, extended or expanded in 2017 – IPO on New York Stock Exchange completed in February 2018 – 996 stores across 88 locations operated in 2017 Source: The Moodie Davitt Report |
Full-year net sales increased US$110.7 million or +6.7% to US$1.76 billion.
Hudson reported like-for-like sales growth of +4.8% in 2017 (+4.4% in constant currency) compared to +3.9% (+4.3% in constant currency) in 2016.
The company reported gross profit of US$1.12 billion, up +7.7%.
Gross margin increased 50 bps to 62.3% in 2017 due to a sales mix shift to higher margin categories, as well as improved supply chain synergies related to the integration of acquired World Duty Free stores.
The company won, extended or expanded 13 concessions during 2017. In February 2018, it completed its initial public offering (IPO) on the New York Stock Exchange.
“Our strong performance in 2017, highlighted by increased like-for-like and organic sales growth, underscores our ability to drive value and productivity from our existing portfolio of stores, while simultaneously executing new business opportunities,” stated Hudson Group President and CEO Joe DiDomizio.
“During the year, we expanded our breadth and scale by winning RFP processes in five new locations, extending or expanding operations in eight existing airports and increasing our overall footprint. As a newly public company, I am energised by the prospect for continued growth and believe we are well-positioned to drive long-term shareholder value through our core purpose of being the ‘Traveler’s Best Friend’.”
As at 31 December 2017, Hudson Group operated 996 stores across 88 locations, totalling 1.1 million sq ft of retail space.
The company retained and expanded business through contract wins at Jackson–Medgar Wiley Evers, Raleigh–Durham, Chicago Midway, Ontario (Canada), Phoenix Sky Harbor, Grand Rapids, Los Angeles International and Dallas Fort/Worth airports.
Hudson also won concessions in two new airports in Tulsa and Des Moines and extended existing contracts in Norfolk International, Las Vegas McCarran and Mineta San José International airports.
Strong fourth-quarter results
The company’s turnover in Q4 reached US$450 million, a year-on-year increase of +8.5%. Organic sales growth was +9.4%, compared to +10.1% a year ago. Fourth quarter net sales grew +8.6% or US$34.9 million year-on-year. Adjusted EBITDA climbed +9.2% to US$41 million.
Like-for-like sales growth was +5.6% (+4.5% in constant currency), compared to +6.5% (+6.5% in constant currency) a year ago.
Gross profit increased US$22.2 million or +8.6% to US$281.5 million in the Q4 compared to US$259.3 million in 2016.
Adjusted EBITDA increased +9.2% to US$41.4 million in Q4 as compared to the prior-year quarter.
IPO
Hudson IPO on the New York Stock Exchange on 1 February in which parent Dufry sold 39,417,765 shares of common stock. The shares were sold at an IPO price of US$19 per share, which generated net proceeds of around US$714.4 million. Hudson Group did not receive any of the proceeds from the offering. Dufry retained majority ownership of Hudson, which was listed under the symbol ‘HUD’.
