Bon-Ton Stores improves net loss in 2Q
HTT Staff -- Home Textiles Today, 8/18/2011 1:30:17 PM
York, Pa. - The Bon-Ton Stores' second quarter was another challenging period for the regional department store chain.
Bud Bergren, president and ceo, noted: "We improved our net loss in the second quarter by 13 cents per share, reflecting lower selling, general and administrative and interest expenses and a favorable tax benefit."
For the quarter, ended July 30, Bon-Ton's net loss narrowed slightly to $32.3 million, or $1.78 per share, compared with a net loss of $33.7 million, or $1.91 per share, for the year-ago period.
Sales fell 2.2% to $595.5, and comps decreased 1.5%.
Year-to-date results were harsher, as net loss widened to $68.3 million, or $3.79 per share, compared with a net loss of $57.3 million, or $3.24 per share, for the prior year period. Comps were down 1.4% and sales decreased 1.9% to $1.245 billion.
Hard home was among the top performers during the second quarter, and furniture was among the weakest for the period.
Cost increases are top of mind, and Bergren offered an outline of the retailer's strategy during Bon-Ton's earnings call this morning.
"We instituted price increases in spring 2011 to reflect cost increases of approximately 5% to 8%," he said. "We found some price resistance to basic commodity products while we saw little impact on price increases on fashion merchandise. We will be increases price in early fall 2011 in fashion merchandise to offset the 18% to 15% expected increase in cost. Our pricing strategy consists of fashion merchandise and holding select key items to last year's prices."
For spring 2012, Bon-Ton's pricing outlook sees "moderated" cost pressures, "and cotton prices have dropped sharply from spring '11 highs. Chinese domestic demand has slowed, yet factory production is down in response to U.S. and Europe demand. We expect some cost reductions come late fall 2011 and we expect this to continue going into spring of 2012."
Looking ahead at the company's overall performance, Bon-Ton remains "optimistic about sales improving in the third and fourth quarters" but, Bergren noted, "we continue to closely monitor the macroeconomic environment and will take measures warranted."
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