Bon-Ton Stores Q2 Loss Narrows, Cuts FY Outlook - Update

(RTTNews) - Department stores Bon-Ton Stores, Inc. (BONT) Thursday reported a narrower loss for the second quarter, on growth in total sales as well as comparable stores sales. The company also cut its earnings and comparable store sales outlook for the full year. The shares fell about 7 percent in pre-market trading.

For the quarter, the company's net loss narrowed to $36.19 million or $1.86 per share from $37.33 million or $1.95 per share in the previous year.

The company said its prior-year quarter results included $3.92 million of debt extinguishment costs associated with certain of its senior notes.

On average, four analysts polled by Thomson Reuters expected a loss of $1.54 per share for the quarter. Analysts' estimates typically exclude special items.

Total sales for the quarter grew 1.1 percent to $563.45 million from $557.14 million in the prior-year period. Analysts expected revenues of $577.05 million. Comparable store sales increased 1.6 percent compared with last year.

Gross margin decreased to 36.6 percent from 37 percent in the same quarter last year, mainly due to increased net markdowns and higher delivery costs.

For the full year, the company now expects earnings per share to be in a range of $0.25 to $0.55, assuming comparable store sales growth of 1.0 to 2.0 percent. Wall Street expects full year earnings of $0.57 per share.

In May, the company expected full year earnings in the range of $0.40 to $0.70 per share, on projected comparable store sales growth of 1 to 3 percent.

Keith Plowman, CFO, said, "Based on the estimated increase in implementation costs, primarily professional fees and severance, associated with our expense efficiency initiative and expenses associated with the CEO transition...and our first half results, we are revising our fiscal 2014 guidance for Adjusted EBITDA to a range of $165 million to $175 million."

Kathryn Bufano will assume the role of president and chief executive officer next week.

BONT closed Wednesday's regular trading at $9.05, down 1.20 percent. In the pre-market activity on Thursday, the shares are down 6.63 percent.