Aug 16 Department store operator Bon-Ton Stores
Inc cut its full-year earnings forecast due to higher
financing costs and said second-quarter loss widened on
continued off-price sales.
Shares of the company fell 4 percent to $7.10 on Thursday
morning on the Nasdaq. They were down as much as 7 percent
earlier in the session.
The company operates 272 department stores in the United
States and sells apparel, accessories, cosmetics and home
For the full year, Bon-Ton now expects results to range from
a loss of $1.35 per share to a profit of 20 cents per share. Its
earlier estimate ranged from a loss of 95 cents per share to a
profit of 50 cents per share.
It said the revised outlook reflects the fees associated
with its recently completed senior notes exchange program. In
July, Bon-Ton said about $330.0 million worth of outstanding
senior notes, or about 71.1 percent of the total, were tendered
under the program.
Second-quarter loss widened to $45 million, or $2.43 per
share, from $32.3 million, or $1.78 per share, a year earlier.
Bon-Ton said gross margin fell to 36 percent in the second
quarter from 37.2 percent a year earlier. Sales fell marginally
to $594.9 million.
"They've been working to get the right assortments within
the stores and it is taking time ... That's why we're seeing a
hit on gross margins," analyst Mary Ross Gilbert of Imperial
Capital told Reuters.
The company, which named Brendan Hoffman as its new top
executive in January, has been trying to trim costs, control
inventory levels and correct ineffective marketing programs as
it attempts to streamline its operations.