Bon-Ton Profit Tops View But Revenues Miss; Provides Weak Outlook

(RTTNews) - Department stores Bon-Ton Stores, Inc. (BONT) reported Tuesday a profit for the fourth quarter that declined from last year, reflecting higher expenses and a near double-digit drop on net sales amid severe winter weather.

Earnings per share for the quarter topped analysts' expectations, while quarterly revenues missed estimates. The company also provided earnings forecast for the full-year 2014, well below Street view.

Separately, the company announced that President and CEO Brendan Hoffman has notified the board that he does not intend to renew his employment agreement with the company after the expiry of his term on February 7, 2015.

Hoffman, who joined the company in 2012, said he has decided to end his tenure with the company for strictly personal reasons. The company said the board will undertake a national search to find a new CEO to succeed Hoffman.

"Despite disappointing fourth quarter sales results, we continued to make progress on several strategic initiatives that we believe will drive improved performance. Multiple snowstorms and the polar vortex during the December and January periods resulted in a sharp decline in traffic and, therefore, we were unable to achieve our comparable store sales goals in the fourth quarter," Hoffman said in a statement.

The company said results for the quarter were negatively impacted by the inclusion of an additional week in the year-ago quarter.

The York, Pennsylvania-based company reported net income of $61.34 million or $3.04 per share for the fourth quarter, lower than $74.41 million or $3.71 per share in the prior-prior quarter.

On average, five analysts polled by Thomson Reuters expected the company to report earnings of $2.74 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter declined to $934.62 million from $1.03 billion in the same quarter last year, and missed five Wall Street analysts' consensus estimate of $980.95 million.

Net sales slipped 9.9 percent to $914.86 million from $1.02 billion a year ago, and comparable stores sales decreased 7.3 percent for the quarter.

Gross margin for the quarter improved 10 basis points to 36.3 percent from last year, and selling, general and administrative expenses increased 110 basis points to 27.1 percent from a year ago.

Looking ahead to fiscal 2014, the company said it expects earnings in a range of $0.40 to $0.70 per share, on projected comparable store sales growth of 1 to 3 percent. Street is currently looking for full-year 2014 earnings of $0.99 per share on annual revenues of $2.93 billion.

"We are excited about our new eCommerce fulfillment center, which will permit significant expansion of our shipping capacity with improved operational efficiency. We will continue strengthening our foundation to deliver profitable sales growth in the coming years," Hoffman added.

BONT closed Monday's regular trading session at $10.87, down $0.40 or about 3.40% on a volume of 0.64 million shares.