The Bon-Ton Stores Inc. nearly halved its first-quarter loss and, in anticipation of improved comparable-store sales, lifted its second-quarter guidance.
For the three months ended May 1, the York, Pa.-based department store chain recorded a net loss of $23.5 million, or $1.33 a diluted share, versus a loss of $45.4 million, or $2.67, loss in the year-ago period. The loss in the 2010 period was 49 cents better than the $1.82 deficit estimate carried by Yahoo Finance.
Total revenues were up 1.9 percent to $675.2 million from $662.9 million. Included in the revenue gain was a 2.6 percent rise in sales to $661.4 million from $644.5 million, with comps up 3 percent. Offsetting the sales gain was a 24.8 percent decline in other income to $13.8 million from $18.4 million, due in part to the fine jewelry conversion to an owned department from a leased business and reduction in income from its proprietary credit card operations.
Bud Bergren, president and chief executive officer, told analysts during a conference call, “We are controlling expenses and inventory levels while generating sales and gross margin improvements. This strategy works well and we plan on continuing it.”
Bergren explained that in controlling inventory and offering a fresh flow of goods and fewer clearances, Bon-Ton “achieved our highest first-quarter gross margin rates in the last several years. Our private brand and incredible value program contributed to the improved gross margin performance. Substantial growth continues to come from e-commerce.”
Gross margin grew to 37.4 percent of sales from 34.8 percent in the first quarter of 2009, reflecting increased net markup and lower markdowns.
The company raised second-quarter earnings guidance to a range of 80 cents to $1.60 a diluted share, up from the 30 cents to $1.10 range projected on March 10. Bon-Ton said it expects a second-quarter comp gain of between 1 and 3 percent, and a reduction of $20 million to $25 million in selling, general and administrative expenses.