The Bon-Ton Stores Inc. president and chief executive officer, Bud Bergren, said the company’s conservatism over the last year was paying off after the firm turned in an $80.3 million fourth-quarter profit versus a hefty year-ago loss.
Investors heartily approved of the profit, which translated into $4.34 a diluted share, and drove the stock up 9.2 percent to $12.71 Wednesday.
After a year of trimming back, Bergren told analysts on a conference call that “our organization is more appropriately structured for the environment and we have emerged as a stronger company.” The ceo also said comparable-store inventories at the end of the quarter were down about 3 percent from a year earlier and clearance levels were down about 10 percent.
The quarter’s profits were driven by cost cuts and inventory controls, which led to a gross margin rate of 38.2 percent — the highest since 2006 and well ahead of the 34.7 percent achieved a year ago. During the fourth quarter of 2008, an impairment charge and a tax allowance pushed the York, Pa.-based firm to a loss of $87.7 million, or $5.22 a diluted share.
Revenues for the three months ended Jan. 30 fell 3.4 percent to $1.02 billion from $1.06 billion and comparable-store sales dropped 2.4 percent.
For the full year, Bon-Ton narrowed losses to $4.1 million, or 24 cents a share, from $169.9 million, or $10.12, in 2008. Revenues fell 5.9 percent, to $3.03 billion from $3.23 billion, and declined 5.4 percent on a comp basis.
“Customers continue to respond to our value message,” said Tony Buccina, vice chairman and president of merchandising. “The moderate zones outperformed the better zones, especially in misses’ sportswear, petites, large sizes, shoes and handbags.”
This year, the firm said profits would rise to 30 cents to $1.10 a diluted share on comp sales that range from flat to up 2 percent. Capital expenditures are expected to total no more than $50 million.
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