follow us

Bon-Ton's Loss Widens

Don Hogsett -- Home Textiles Today, November 28, 2005

York, Pa. — Hurt by falling same-store sales, falling margins and a $1.4 million charge stemming from the earlier sale of its credit card business, The Bon-Ton Stores put up a sharply widening third quarter loss of $6.3 million, compared with a year-ago deficit of $745,000.

Both overall and same-store sales declined 4.1 percent, to $285.7 million from $297.8 million during the same period a year ago.

Home, however, turned out to be one of the stronger performers during the quarter. James Baireuther, vice chairman and chief administrative officer, said better-than-average performers were women's special size apparel, shoes, intimate, men's sportswear, home and fashion accessories. Weakest were men's furnishings, dresses and coats.

Putting earnings under pressure, in addition to the falling sales, average gross margin contracted 370 basis points, or 3.7 percentage points, to 33.8 percent from 37.5 percent a year ago.

Baireuther said: “Factors which contributed to the decrease in sales and the subsequent higher markdowns were the unseasonably warm weather we experienced in our regions and the macro environment reflecting the lack of consumer confidence and the concerns of higher gas and heating costs. Additionally, the cost of procuring goods was affected by higher fuel costs.”

Those concerns, he said, led the company to lower its expectations for consumer spending — and Bon-Ton profits — during the Christmas season, to about $1.50 to $1.60. Since then, the company has revised its earnings target downward even further because of the cost of closing a store in Buffalo, N.Y.

The Bon-Ton Stores, Inc.

Qtr. 10/29 (x000) 2005 2004 % change
(loss)
a-Third quarter results include $2.1 million in miscellaneous income, compared with $2 million a year ago; a $1.2 million charge stemming from the sale of the company's proprietary credit card operations; and an income-tax benefit of $3.2 million, compared with a prior-year benefit of $745,000.
b-Nine-month results include miscellaneous income of $6.1 million, compared with $6.2 million last year; an income-tax benefit of $7 million, compared with $4 million a year ago; and a $1.2 million charge stemming from the sale of the credit card business.
Sales $285,676 $297,798 -4.1
Oper. income (EBIT) (6,694) 2,297 --
Net income (6,300)a (745)a --
Per share (diluted) (0.39) (0.05) --
Average gross margin 33.8% 37.5% --
SG&A expenses 34.2% 35.3% --
Nine months
Sales 822,555 847,079 -2.9
Oper. income (EBIT) (9,412) (637) --
Net income (12,157) (6,684) --
Per share (diluted) (0.75) (0.42) --
Average gross margin 35.5% 37.0% --
SG&A expenses 34.8% 35.3% --


Other Home Furnishings Sites

Casual Living
Gifts and Decorative Accessories
Home Accents Today
Kids Today
Furniture Today