Canadian department store operator Hudson's Bay Co on Wednesday posted its first profit in eight quarters, but missed expectations as a tough retail environment ate into comparable sales and margins.

The company said a transformation plan announced in June to improve efficiencies had caused some business disruptions, which had a negative impact in the fourth quarter, but that it will generate annual savings of C$350 million ($271.02 million) by this fiscal year’s end.

Its shares, which touched a record low earlier in the session, recovered to trade up 1.5 percent at C$8.65 at 2:45 p.m. ET (1845 GMT)

The owner of the Saks Fifth Avenue luxury retailer said it had net income of C$84 million (46.11 million pounds), or 39 Canadian cents per share, in the fourth quarter, which ended Feb. 3, compared with a net loss of C$152 million, or 83 cents, a year earlier. The increase was primarily due to a tax benefit on recent U.S. tax reforms, the company said in a statement.

Adjusted net income excluding one-time items was C$20 million, missing analyst expectations of C$120.18 million, according to Thomson Reuters I/B/E/S.

The company, which also operates Lord & Taylor in the United States and GALERIA Kaufhof in Europe, has been trying to extract value from its substantial real estate holdings as it wrestles with a shift in consumer preferences away from department stores to e-commerce and off-price offerings.

"While we are not pleased with our recent performance, we continue to capitalise on the value of our real estate portfolio and are taking action to improve our operating results," Executive Chairman Richard Baker said in a statement.

Moody's Investors Service in January downgraded Hudson's Bay's ratings, saying the changing consumer behaviour is increasing the need for department store operators to improve their technological capabilities and operational execution.

Comparable sales in Hudson's Bay's digital division, including its Gilt online store, rose 2.8 percent in the three months. Comparable sales in its European division, which includes Kaufhof, Germany's largest retail chain, and new stores in the Netherlands, fell 3.4 percent. They also fell across all other divisions except Saks Fifth Avenue, where they rose 2.1 percent.

Performance at the company’s Lord & Taylor and HBC Off Price banners has “clearly not met expectations,” Helena Foulkes, who became chief executive on Feb. 19, said on a teleconference on Wednesday. “We’re looking at every part of the business to improve performance. Everything is on the table.”

The company plans to open 10 stores and close nine, including four Lord & Taylor locations and one Hudson’s Bay, this year.

Comparable sales in its European division, which includes Galeria Kaufhof, Germany’s largest retail chain, fell 3.4 percent.

Canada’s oldest company said last month it had rejected Austrian property and retail group Signa Holding GmbH’s 3 billion euro bid for the Kaufhof unit, and that Signa had withdrawn its offer.

German magazine Manager Magazin last week reported that Kaufhof was set to post a loss of more than 100 million euros for the fiscal year, due to rental increases of 50 million euros annually imposed by Hudson’s Bay, which is also Kaufhof’s main landlord.

Hudson’s Bay does not provide a breakdown of the earnings of individual divisions.

Hudson’s Bay reported net income of C$84 million, or 39 Canadian cents per share, in the fourth quarter, which ended Feb. 3, compared with a net loss of C$152 million, or 83 cents, a year earlier, primarily due to a tax benefit on recent U.S. tax reforms, the company said in a statement.

Adjusted net income excluding one-time items was C$20 million, missing analyst expectations of C$120.18 million, according to Thomson Reuters I/B/E/S.

The company reported a loss of C$581 million, or C$3.04 per share, for the full year, compared with C$516 million, or C$2.83, in the prior period.

The company has put its downtown Vancouver store, which it owns in a joint venture with Canadian retail property trust RioCan RIO_u.TO, up for sale. That follows the sale of its flagship Lord & Taylor building on Manhattan’s Fifth Avenue to Softbank-backed WeWork Companies Inc for $850 million.