The regional department stores reporting results Tuesday posted weak fourth-quarter and year-end numbers amid a tough consumer spending environment, but an optimistic outlook from one of the companies — Bon-Ton Stores Inc. — bolstered the retailer’s stock.

Stage Stores Inc.’s profits were worn down by weak sales and a tougher year-over-year earnings-per-share comparison, while Gottschalks Inc. saw a steep drop in earnings as shoppers pulled back their spending.

For the quarter ended Feb. 2, Bon-Ton Stores delivered a 15 percent net income decline to $75.2 million, or $4.43 a share, from $88.4 million, or $5.20 a share, in the same period last year on sales that fell 8.9 percent to $1.14 billion.

For the year-end period, earnings dropped 75 percent to $11.6 million, or 68 cents, from $46.8 million, or $2.78, in the prior year on sales that rose 0.1 percent to $3.36 billion.

Quarterly EPS came in ahead of Wall Street analysts’ estimates. Excluding a 16 cent impairment charge, the EPS was $4.59 for the fourth quarter. Analysts had the retailer pegged to earn $4.02. Shares of the company finished the day up 11.8 percent to $5.88, outpacing Tuesday’s stock market rally.

Bud Bergren, president and chief executive officer of Bon-Ton Stores, said the company navigated an “extremely difficult year by managing inventory and expenses, while accomplishing goals we had established for the second year of integration of Bon-Ton and Carson’s.”

The ceo said the retailer is fully integrated “We expect the difficult macroeconomic environment to continue. Therefore, we will operate to a conservative plan in order to maintain our strong financial position. We believe improvements in merchandise content and inventory control, along with stringent cost controls, will allow us to maximize our earnings and cash flow in this challenging environment.”

Although the fourth-quarter gross margin rate shed 70 basis points on markdowns, management sees efforts in reducing debt and other financial and operating initiatives as bolstering its bottom line.

Keith Plowman, executive vice president and chief financial officer, said, “We expect the retail environment to remain difficult in fiscal 2008, but we will continue to focus on strengthening our company through additional operating efficiencies to position it for the future.” For 2008, EPS is forecast to range between 20 cents and 45 cents, with pretax earnings coming in between $230 million and $237 million.

This story first appeared in the March 12, 2008 issue of WWD. Subscribe Today.

At Stage Stores, net income dropped 20 percent to $31.7 million, or 78 cents, from $39.6 million, or 88 cents, in the same period last year on sales that fell 3.7 percent to $473 million.

For the year, net income declined 4 percent to $53.1 million, or $1.24, from $55.3 million, or $1.25, in the prior year on sales that shed 0.3 percent to $1.55 billion.

The operator of Bealls and Peebles stores said carving out noncomparable items from the prior year’s fourth-quarter period shows flat earnings. Management said the fourth-quarter results “benefited from our careful management of inventory levels and merchandise receipt flows, tight controls over our operating expenses and our stock repurchase activities.”

Worn down by macroeconomic trends, Gottschalks reported a fourth-quarter drop in net income to $1.1 million, or 8 cents a share, from $8.9 million, or 64 cents a diluted share, during the same quarter last year. Sales in the quarter fell 14.2 percent to $204.4 million from $238.1 million. Same-store sales during the quarter fell 5.1 percent.

For the fiscal year ended Feb. 2, Gottschalks reported a net loss of $12.4 million, or 91 cents a share, versus net income the prior year of $2.6 million, or 20 cents, as sales declined 8.1 percent to $628.6 million.

James Famalette, chairman and ceo of Gottschalks, said results reflect “persistent challenges in the retail environment. Difficult economic conditions, including the weak housing market and high gas prices, also more heavily affected consumers in California, where the majority of our stores are located. Like many other retailers, we conducted deep discounting during the year, which negatively impacted our gross margin.”