Bon-Ton Stores store sales fall short in Q1, achieves omnichannel growth
The Bon-Ton Stores, Inc. on Thursday announced the financial results for its first quarter ended April 30, 2016. The company struggled in sales and revised its earnings guidance for the full year.
Comparable store sales for the quarter decreased 2.9% and total sales in the period decreased 3.3% to $591 million from $610.9 million in the first quarter of fiscal 2015. The company achieved sales increases for its Home, Young Men’s, Big and Tall and Young Contemporary categories, while the Woman’s Accessories category performed the poorest.
Bon-Ton once again achieved double-digit sales growth in omnichannel, which reflects sales via the company’s website and Let Us Find It initiative, and other income increased $1.1 million to $17.4 million. The gross margin rate increased six basis points over last year, and gross profit decreased to $200.1 million as a result of decreased sales volume.
Kathryn Bufano, President and Chief Executive Officer, commented, “Ongoing headwinds in the retail environment, unfavorable weather, and a soft Easter all pressured our top line performance during the quarter. We saw only a slight decrease in merchandise margin and reduced inventory levels by 4.0% on a comparable store basis despite the sales pressure, as we maintained disciplined inventory management. In addition, we moved forward with our cost savings initiatives while continuing to carefully manage expenses. That said, based on our first quarter performance as well as current trends in the second quarter to-date and our expectation that the retail environment will remain difficult, we believe that it is prudent to reduce our full year guidance.
The company plans to remain focused on the factors it can control, which it believes will drive sales in the latter half of the year.
For fiscal 2016, Bon-Ton expects its adjusted EBITDA to range between $130 million and $140 million assuming that comparable sales range from flat to a decrease of 1%.
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