An ill retail wind — that is, one that was unseasonably warm and easy to blame — hit The Bon-Ton Stores Inc. and Stage Stores Inc. in the third quarter, while Stein Mart Inc. suffered for its unsuccessful effort to get too young too fast.
And each company paid a steep price with investors, who hit the sell button — and hard — when they revealed quarterly losses on Thursday.
Shares of Stein Mart dropped 24.8 percent to $5.12 while Stage Stores fell 17.8 percent to $4.77, and Bon-Ton decreased 15.3 percent to $1.60. The steep declines stood out as the broader market, as read in the Dow Jones Industrial Average, rose 35.68 points to 18,903.82.
Clearly, there are still gains to be had in the market, warmer weather or not. Off-pricer Ross Stores Inc., in an after-market report, said its third-quarter net earning rose 13.4 percent to $244.5 million, or 62 cents a diluted share, as sales jumped 10.9 percent to $3.09 billion.
Bon-Ton’s third-quarter losses narrowed slightly, to $31.6 million, or $1.58 a share, as revenues fell 5.2 percent to $607.3 million.
Kathryn Bufano, president and ceo, pinned the weaker sales performance on “warm weather in addition to soft traffic trends.” The department store cut its forecast for the year significantly, and is now looking for losses of $2.04 to $2.54 per diluted share. That’s down from losses of 95 cents to $1.45 that were projected in August.
Stage Stores’ losses widened to $15.6 million, or 58 cents a share, as sales fell 9.8 percent to $317.1 million.
Michael Glazer, president and ceo, said the results were hurt by “a difficult retail environment, unseasonably warm weather, the weak peso and ongoing pressure in Texas, Oklahoma, Louisiana and New Mexico from depressed oil prices.”
But some relief, in the form of a cold front, might be on the way. Weather forecasting firm Planalytics said that after warmer temperatures this fall, particularly across the interior and western regions of the U.S., the upcoming weekend “will represent a continued transition into fall from the Plains eastward. Below normal temperatures will engulf interior regions and the entire East Coast.”
Stein Mart, though, can’t pin its hopes on a drop in the mercury. The company’s losses widened to $11 million, or 24 cents a diluted share, from $197,000, or 1 cent a year earlier, as sales slipped 0.4 percent to $299.5 million. Dawn Robertson, who was chief executive officer of the value retailer for seven months, stepped down in September after her efforts to attract a younger more modern customer fell flat.
Hunt Hawkins, interim ceo said: “We introduced new marketing and promotional changes, as well as new merchandising strategies, during the quarter which were not embraced by our customer. The promotional changes were particularly impactful on our ability to clear spring merchandise on a timely and profitable basis during the quarter. As a result, we took significant markdowns to liquidate spring inventories. The lower gross profit rate also reflects higher occupancy costs, mostly from new stores, which negatively leverage on lower comparable-store sales.”
Hawkins said the company was reverting back to its traditional marketing and promotional stance as it looks for a better strategy.