The Bon-Ton Stores Inc., which has dual headquarters in Milwaukee and York, Pennsylvania, today reported its fiscal fourth quarter results, which were lower than expected for the holiday period.
Net income was $44.7 million, or $2.09 per share, down from $50.6 million, or $2.42 per share, in the fourth quarter of 2016. Non-cash impairment charges of $16.7 million, or 78 cents per diluted share, impacted the fourth quarter profit. Seeking Alpha’s consensus analyst projection was for $3.24 per share in the fourth quarter of 2016.
Revenue totaled $877.3 million, down from $927.9 million in the fourth quarter of 2016. Analysts expected $892.6 million in revenue.
Comparable store sales, an important measure of retail performance, were down 4.7 percent year-over-year. January sales were lower than expected, weighing on the usual boost from holiday season sales in the fourth quarter.
For the full year, Bon-Ton reported a net loss of $63.4 million, compared with a net loss of $57.1 million in 2015. The year included consulting and severance costs related to its efforts to draw down expenses of 32 cents per diluted share. In addition, it incurred non-cash impairment charges of 85 cents per share for the year.
Full-year 2016 revenue was $2.6 million, down from $2.7 million in the prior year.
Comparable store sales decreased 3.8 percent from 2015 to 2016.
Like many retailers, Bon-Ton is struggling to attract customers as consumers shift more of their spending online and spend less time in brick-and-mortar stores. Bon-Ton Stores operates 263 department stores in 25 states under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers brands.
Kathryn Bufano, president and chief executive officer of Bon-Ton Stores, said the company will continue cutting costs, managing inventory and emphasizing its omnichannel shopping opportunities.
“While the continued weak traffic trends and unseasonably warm weather pressured sales in the fourth quarter, we expanded gross margin by 145 basis points and grew adjusted EBITDA by 8 percent,” Bufano said. “In addition, we exceeded our cost reduction goal by $7 million, with net savings of $31 million for the year. We also made progress on a number of initiatives designed to differentiate our stores within the retail landscape. As part of this, we believe we further solidified our position as the hometown shopping destination with an emphasis on our localization strategy which included the introduction of our Close to Home product assortment. In addition, we continued to focus on our omnichannel strategy, with sales once again growing in the double digits. Finally, we grew our base of loyal private label credit card users, and launched our new Love Style Rewards loyalty program, to great response.”
