The red ink flowed for The Bon-Ton Stores Inc. and Stein Mart Inc. in the second quarter, but Stage Stores Inc. managed to hold up better with just a small decrease in profits.
This story first appeared in the August 22, 2008 issue of WWD. Subscribe Today.
At Bon-Ton, losses widened to $33.8 million, or $2.01 a share, as the company took a $12 million, or 72 cent a share, charge to write down the value of goodwill. The charge was prompted by a drop in the firm’s stock value and expectation the tough economy will impede a near-term recovery. The quarterly losses compared with losses of $15 million, or 91 cents, a year ago.
Revenues for the three months dipped 4.9 percent to $694.9 million from $730.9 million as comparable-store sales fell 5.7 percent.
“We continue to adjust our operating plan based on what we are seeing in the marketplace and are making every effort to capture sales opportunities while remaining intently focused on controlling inventory, expenses and capital expenditures,” said Bud Bergren, Bon-Ton’s president and chief executive officer, on a conference call with analysts.
Like other regional players, the York, Pa.-based Bon-Ton has been pressured by a lack of consumer spending and stiff competition from better-capitalized national players.
Markdowns to move goods at Stein Mart pushed the Jacksonville, Fla.-based retailer to quarterly losses of $8 million, or 19 cents a share. This compared with earnings of $2.2 million, or 5 cents, a year ago. Sales for the three months slipped 5.8 percent to $311.6 million from $330.7 million, as comps fell 9.7 percent.
“We took aggressive markdowns in the second quarter to drive consumer traffic and achieve our goal of keeping inventory levels in line with the sales trend,” said Linda Farthing, president and ceo. “These lowered inventory levels, which we expect to continue, should give us a cleaner platform to present fresh fashion going forward.”
Stage Stores’ second-quarter earnings dipped 2.2 percent to $9.7 million from $9.9 million a year ago. Earnings per share, however, rose to 25 cents from 23 cents due to fewer shares outstanding in the most recent quarter. Sales rose 3.8 percent to $372.7 million from $359.2 million as comps dipped 1.4 percent.
“As a result of our strong inventory controls, we ended the quarter with our retail inventories down 8.9 percent on a comparable-store basis,” said Jim Scarborough, chairman and ceo. “Despite the difficult macroeconomic environment, our financial condition remains strong. Our free cash flow for the first half of the year exceeded last year’s level, while opening 28 stores this year versus 14 stores last year.”
The second quarter for Bon-Ton, Stein Mart and Stage Stores ended Aug. 2.