Bon-Ton Stores sales numbers affected by cool weather in Q2 2015

By

Obi Anyanwu

Published
Aug 31, 2015

The Bon-Ton Stores Inc. announced today its operating results for the second quarter of 2015. The company had a difficult second quarter reporting a decrease in sales and net losses.

 
Comparable store sales decreased 1.3% and total sales decreased 1.4% to $555 million from $563 million in the previous year. E-commerce sales continued to grow in the double-digits, and the sales from smaller stores outperformed the larger locations. Other income in the quarter increased to $15.6 million from $14.7 million in the previous year. The company feels that sales were hindered by the weather.
 
Kathryn Bufano, President and Chief Executive Officer, commented, “While our second quarter sales results were challenged, we saw meaningful improvement in our gross margin rate and effectively managed expenses, enabling us to achieve Adjusted EBITDA in line with that of last year. Sales were pressured by unseasonably cool weather, which impacted our seasonal classifications, and by weakness in overall traffic trends. That said, we were encouraged by the sales improvement in certain core categories and our private label business. Additionally, as previously announced, we closed on a sale/leaseback transaction that enabled us to retire one of our mortgage facilities.”

The company also reported a net loss of $39.6 million compared to $36.2 million in the previous year. The results show a loss of $4.9 million, which was as a result of the early termination of one of the company’s mortgage facilities and a gain of $0.7 million for the insurance settlement.
 
Bon-Ton Adjusted EBITDA was $5.0 million compared to $5.1 million in the previous year. Ms. Bufano continued, “Looking ahead, we believe that some of the macro pressures that impacted our sales during the second quarter will continue into the second half and, therefore, we are reducing our fiscal 2015 Adjusted EBITDA guidance to a range of $145 million to $155 million. We will continue to prudently manage our business while we remain focused on the continued execution of our strategic initiatives to drive improved sales productivity and EBITDA growth over the long term.”