Aug 16 (Reuters) - 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 furnishings.
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.