Bon-Ton negatively impacted by warm weather, weak January sales

The Bon-Ton Stores on Tuesday reported its fourth quarter and fiscal 2016 results, which includes net income of $44.7 million, or $2.09 per diluted share, in the fourth quarter.

A Close to Home shop at Bon-Ton in Milwaukee, WI

Comparable store sales decreased 4.7% in the fourth quarter and decreased 3.8% in the fiscal year. Sales trends picked up during the holiday season and fell out in January. The company also achieved double-digit sales growth in omnichannel, which reflects sales via its website, mobile site, and its Buy Online Pick Up In-Store initiative.
Kathryn Bufano, President and Chief Executive Officer, commented, “While the continued weak traffic trends and unseasonably warm weather pressured sales in the fourth quarter, we expanded gross margin by 145 basis points and grew Adjusted EBITDA by 8%. In addition, we exceeded our cost reduction goal by $7 million, with net savings of $31 million for the year. We also made progress on a number of initiatives designed to differentiate our stores within the retail landscape.
The company reported a net loss of $63.4 million, or $3.18 per diluted share, compared to a net loss of $57.1 million, or $2.90 per diluted share, in the previous year. Gross margin increased 145 basis points to 36.2% in the fourth quarter and jumped 80 basis points to 35.5% for the year.
In addition, adjusted EBITDA increased to $101.6 million in the fourth quarter and $116.0 million in fiscal 2016.
Bon-Ton plans to remain focused on capitalizing on its omnichannel business, refining marketing strategies, further evolving its merchandise assortment, and remaining disciplined in its inventory management.
The company also expects loss per diluted share to range between $2.08 to $2.59 in fiscal 2017, and for comparable sales to decrease in range of 2% to 3%.

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