NEW YORK — Bon-Ton Stores Inc.'s fourth-quarter profits soared 42.5 percent profit as the retailer posted a tax gain of $2.2 million as well as higher gross margin rates.
The retailer, which just wrapped up its acquisition of the Saks' northern department store group, also said it was engaging in a new retail strategy aimed at luring in shoppers with better merchandise and an improved shopping environment.
For the quarter ended Jan. 28, Bon-Ton's net income rose to $38.2 million, or $2.30 a diluted share, from $26.8 million, or $1.65 a share, in the prior period, on sales that inched up 0.3 percent to $464.6 million from $463.3 million. For the year, net income climbed 28.7 percent to $26 million, or $1.57 a share, from $20.2 million, or $1.24, on sales that dropped 0.9 percent to $1.31 billion from $1.32 billion.
Same-store sales for the quarter showed a gain of 0.3 percent, while the gross margin rate climbed 1.3 percentage points, to 37.3 percent.
The tax gain during the quarter relates to a net reduction of income tax valuation allowances, the retailer said in its quarterly statement, created when it acquired Elder-Beerman in October 2003.
Regarding its repositioning, Byron L. Bergren, vice chairman, president and chief executive officer, said on a conference call with analysts that the retailer would "offer a unique and differentiated merchandise assortment, giving our customer a reason to shop with us."
"Our focus is on apparel, accessories, cosmetics, shoes and home furnishings," Bergren said. "We also have a significant opportunity to increase the penetration of private brands, to further differentiate our offerings and improve gross margin."
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