The Bon-Ton Stores Inc. slightly narrowed its second-quarter loss from a year ago, but still missed Wall Street’s estimates.
For the three months ended July 30, the net loss was $38.7 million, or $1.95 a diluted share, from a net loss of $39.6 million, or $2.01, a year ago. Net sales slipped 2.4 percent to $542.4 million from $555.4 million, while comparable-store sales fell 2 percent in the quarter. The company said other income in the quarter, $16.3 million, reflecting a $700,000 increase from a year ago, was from its proprietary credit card operations.
Wall Street was expecting a loss of $1.75 a share, and revenues of $557 million.
The company said it saw sales increases in activewear, big and tall, denim, young men’s, young contemporary plus, women’s better handbag, hard home and furniture. It also said the retailer posted accelerated growth in omnichannel, reflecting sales via its web site, mobile site and its Buy Online, Pick Up In-Store and Let Us Find It initiatives.
For the six months, the net loss widened to $76.6 million, or $3.86 a diluted share, on a 2.8 percent decline in net sales to $1.13 billion.
Kathryn Bufano, president and chief executive officer, said during a conference call to Wall Street analysts, “In the past three months, we expanded a number of highly recognized brands across our store base, increase the percentage of localized content in our stores and broadened our assortment in underpenetrated categories.”
She said customers responded favorably to the initiatives, which reflected a 6 percent increase in the retailer’s growth businesses, which included the activewear, contemporary, denim and young men’s categories.
Bufano said another major initiative was its omnichannel strategy, which saw “accelerated growth” helped by its Buy Online Pickup In Store and Let Us Find It initiatives. Its mobile site now has a simplified checkout and improved navigation, she said, which resulted in driving a “triple-digit growth in our mobile business once again. With free Wi-Fi available in every store, our customers can easily use our app or web site while they’re shopping.”
“Soft retail traffic trends and a highly promotional environment remained our biggest challenges,” Bufano said.
During the quarter, the company expanded Under Armour to 225 doors, while Under Armour’s men’s footwear and golf were made available in 100 doors. The brand’s women’s and kids footwear expanded by 50 doors, Bufano said. She also said the retailer will be introducing Tommy Hilfiger Women into 125 doors and plans to relaunch Jones New York this fall.
The retailer earlier this week said it closed on a new $150 million asset-based term loan that replaced an existing $100 million A-1 tranche of its credit facility and brings the total commitment under the facility to $880 million. The company will use part of the net proceeds to retire about $57 million remaining of its senior notes due in July 2017.
The retailer said it is maintaining its full-year 2016 guidance. The company expects comps to be flat to down 1 percent, and a loss per share in the range of 95 cents to $1.45.
Shares of Bon-Ton on Thursday closed up 7.3 percent to $1.76 in Nasdaq trading.