Bon-Ton Lowers 2007 Guidance After Slump
YORK, Penn. – Bon-Ton is reporting second quarter net losses of $15.0 million (91 cents per share), better than last year’s second quarter net loss of $19.8 million ($1.20 per share). Sales were down 5.1 percent from $746.8 million last year to $708.6 million in the second quarter this year. Bon-Ton and Carson’s combined same stores sales decreased five percent, the company said.
Bon-Ton CEO Bud Bergren commented in the financial release today, “We improved our gross margin rate in the second quarter of 2007 by 310 basis points to 38.0% with the elimination of liquidation events we offered in the second quarter of 2006. We also achieved an EBITDA improvement in the second quarter of approximately 60% over the prior year period. However, the additional sales shortfall reflecting what we believe was a challenging retail environment, along with the planned reduction in our sales of approximately $17.5 million related to last year’s liquidation events, reduced our EBITDA and net income below our expectations for the quarter.”
Bergren was optimistic for the year ahead. “As we have noted before, fiscal 2007 is a transitional year for Bon-Ton as a result of the ongoing process of integrating Bon-Ton and Carson’s; we will not have a fully comparable year until 2008,” he said.
The company has lowered its guidance for the year based on poor sales in June and July and lower than expected first quarter performance.
Bon-Ton operates 278 stores under the names Bon-Ton, Bergner’s, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger’s and Younkers. It also operates two Parisian stores in the Detroit, Michigan area.
