NEW YORK — The Bon-Ton Stores Inc. swung to a profit in the second quarter while its acquisition target The Elder-Beerman Stores Corp. widened its loss.
For the three months ended Aug. 2, York, Pa.-based Bon-Ton reported net income of $858,000, or 6 cents a diluted share. That’s a significant improvement over last year’s loss of $1.6 million, or 10 cents.
While revenues slipped fractionally, or 0.5 percent, to $153.7 million, a comparable-store sales gain of 0.2 percent and a 250 basis-point contraction of selling, general and administrative costs allowed the company to return to the black.
“Although second-quarter sales were virtually flat with last year, we were able to control operating expenses, keep inventory levels in line with plan and offer our customer value with broad assortments of fresh, new merchandise,” said chief administrative officer James Baireuther in a statement. “The earnings improvement also reflects a gain on the sale of our Harrisburg distribution center and lower interest expense.”
As reported, last month Bon-Ton proposed to acquire Elder-Beerman for $7 a common share. The companies have since entered into a confidentiality agreement, since due diligence and financing arrangements are currently under way. As such, neither firm’s management would comment on the deal. Shortly prior to the Bon-Ton offer, Wright Holdings, a management-aligned acquisition group, offered $6 a share for Elder-Beerman’s stock. That proposal is currently under regulatory review by the Securities and Exchange Commission.
Overall, for the first half of the fiscal year, Bon-Ton narrowed its loss to $2.1 million, or 14 cents, from $5.9 million, or 39 cents, a year ago. Revenues fell 3.3 percent to $295.3 million and comps slipped 2.7 percent.
Meanwhile, the suddenly coveted Elder-Beerman’s second-quarter loss widened to $2.1 million, or 19 cents, from $1.7 million, or 15 cents, a year ago. Net revenues ticked down 0.8 percent to $139.8 million, but comps improved 1.6 percent.
“We our pleased with our comparable-store sales, with all three months of the quarter producing increases,” said chief executive Bud Bergren on a conference call. He added that women’s moderate apparel and cosmetics were among the best performing merchandise categories.For the first six months of the fiscal year, the Dayton, Ohio-based regional department store chain narrowed its loss to $4.6 million, or 40 cents, from $20.3 million, or $1.79, a year ago. Excluding a charge for an accounting change, last year’s loss would have been $5.2 million, or 46 cents. Revenues for the half declined 4 percent to $278.4 million from $289.9 million, and comps fell 3.2 percent.
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