Bon-Ton sluggish, lowers fiscal year expectations
Staff Staff -- Home Textiles Today, May 22, 2008
York, Pa. – Bon-Ton lowered its fiscal year guidance today after reporting a widened loss for the first quarter.
For the quarter ended May 3, Bon-Ton’s loss widened to $34.1 million, or $2.03 per share, from a loss of $29.3 million, or $1.78 per share, in last year’s first quarter. Sales dropped 5% to $700.2 million, with comps declining 4.6%.
President and ceo Bud Bergren said in a conference call with analysts today that although results were impacted by the soft economy, Bon-Ton managed to widen gross margin, particularly by improving inventory levels. Comp-store inventory came in 8.7% below last year’s levels, he said, and SG&S (sales, general and administrative expenses) were reduced by $4.6 million.
Bon-Ton continues to push private and exclusive labels, with the biggest increases of the past quarter taking place in moderate sportswear, petite and large-size sportswear, soft home and women’s shoes.
The retailer’s relatively small e-commerce operation met plan for the first time, with the strongest performances coming from soft home, hard home and shoes.
But looking ahead, Bergren said the retail environment will remain challenging through the end of the year. Bon-Ton now expects a comp decline of 2.5% to 3.5% for the year, where previously is estimated a comp gain of 1% to 2%.
The retailer now expects fiscal 2008 results to range from flat to a profit of 30 cents per share. Earlier, Bon-Ton forecast full-year earnings of between 20 cents and 45 cents per share.