The Bon-Ton Stores Inc. reduced its fourth-quarter guidance after achieving a mid-single-digit increase in holiday sales at a considerable cost to its margins.
The company said comparable sales, including those for its e-commerce activities, rose 5.3 percent during November and December as total sales for the period increased 3.8 percent to $796.4 million.
Adjusted earnings before interest, taxes, depreciation and amortization are now projected to end the quarter between $140 million and $150 million, $10 million below the earlier range provided.
Kathryn Bufano, president and chief executive officer, said customers responded well “to both in-store and online offerings. However, our strong sales performance was tempered by the highly promotional sales environment.”
Shares fell 11.3 percent, or 70 cents, to $5.50 in the first hour of Nasdaq trading Tuesday.
The company also said executive vice president and chief financial officer Keith Plowman would retire in August and then work for the York, Pa.-based department store group for 18 months under a consulting agreement.
Bon-Ton’s board plans to commence a national search for find his successor.
Plowman joined Bon-Ton in 1997 as divisional vice president of finance and was promoted to senior vice president and cfo in 2005. He played a key role in the acquisition of Elder-Beerman stores in 2003 and the northern division of Saks in 2006, as well as their subsequent integration into the Bon-Ton organization.
“Keith was instrumental in the planning, financing and execution of the company’s significant acquisitions in the prior decade when our store count grew four-fold in a three-year period,” said Tim Grumbacher, Bon-Ton’s chairman. “The progress made under Keith’s leadership is reflected in the great potential of our store base today.”
Bon-Ton currently operates 272 department stores, nine furniture galleries and four clearance centers in 26 states in the Northeast, Midwest and upper Great Plains. Its nameplates include Bergner’s, Boston Stores, Herberger’s and Younkers.