Bon-Ton Posts Q1 Loss
May 20, 2016,
YORK, Pa.—The Bon-Ton Stores said a challenging retail environment, unfavorable weather and a soft Easter were to blame for a first quarter net loss of $37.8 million.
Total sales in the quarter ended April 30 decreased 3.3 percent to $591 million, compared with $610.9 million in the first quarter of fiscal 2015. Comparable-store sales in the first quarter of fiscal 2016 decreased 2.9 percent.
Sales increases were achieved in home, young men’s, big and tall, and young contemporary, while woman’s accessories was the poorest performing category. Sales were also impacted by general weakness in apparel and shoes, the retailer said.The company posted double-digit sales growth in omnichannel.
“Ongoing headwinds in the retail environment, unfavorable weather, and a soft Easter all pressured our top line performance during the quarter,” said Kathryn Bufano, president and CEO. “We saw only a slight decrease in merchandise margin and reduced inventory levels by 4 percent 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.”
Based on its first-quarter performance and “expectations that the retail environment will remain difficult,” Bufano said the retailer is reducing its full year guidance. It now expects adjusted EBITDA in a range of $130 million to $140 million and assumes a comparable sales performance ranging from flat to a decrease of 1 percent.
“We remain focused on the controllables which we believe will drive incremental sales in the back half of the year, including further enhancing both our brand and our merchandise assortments, elevating the communication of our value proposition to both new and existing customers, and once again driving double-digit growth in our omnichannel sales,” Bufano said.
Last year, Bon-Ton ranked 65th on HFN’s list of the top home furnishings retailers, with home products sales of $471 million.