IMPROVED INVENTORY BOOSTS BON-TON NET
NEW YORK — More stringent inventory and expense controls received much of the credit for The Bon-Ton Stores’ 8.8 percent improvement in fourth-quarter net income.
Net income for the 14 weeks ended Feb. 3 totaled $17.1 million, or $1.13 a diluted share, compared to $15.8 million, or $1.06 a share, in the final 13 weeks of the prior year.
Sales for the quarter were $266.4 million, an increase of 6.3 percent over the $250.6 million reported during the final quarter of the prior year, which was one week shorter. Comparing the final 13 weeks of both years, same-store sales increased 3 percent.
Noting that Bon-Ton’s business improved in the fall after a “rather disappointing spring,” vice chairman and chief operating officer Michael Gleim commented in a statement, “Profitability increased in the fall due to several merchandising and operational initiatives.”
Specifically, he stated, better management of inventories boosted gross margins 0.5 percent during the second half of the year, while selling, general and administrative expenses, as a percentage of sales, declined 0.6 percent to 30.9 percent for the full year. For the full year, net income declined 22.3 percent to $7.5 million, or 50 cents a diluted share, from $9.7 million, or 66 cents. Earnings per share in the most recent year would have been 77 cents without a pre-tax expense of $6.5 million related to workforce reductions and management changes. The prior-year earnings reflect an after-tax charge of $378,000, or 2 cents, for early extinguishment of debt.
Sales for the year rose 5.5 percent to $749.8 million from $711 million in the prior year.