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Comparable store sales fall in Q3 at Bon-Ton Stores

22
Nov '11
The Bon-Ton Stores Inc. reported results for the third quarter of fiscal 2011 ended October 29, 2011.

Third Quarter Highlights
• Comparable store sales decreased 5.9%.
• Gross margin rate was 37.4% of net sales compared with 38.2% in the prior year period.
• Operating income totaled $0.5 million, compared with operating income of $22.7 million in the third quarter of fiscal 2010.
• EBITDA was $25.0 million, compared with $48.7 million in the third quarter of fiscal 2010. EBITDA is not a measure recognized under generally accepted accounting principles Net loss totaled $22.0 million, or $1.21 per diluted share, compared with a net loss of $6.3 million, or $0.36 per diluted share, for the third quarter of fiscal 2010.

Year-to-date Highlights
• Comparable store sales decreased 3.0%.
• Gross margin rate was 36.7% of net sales compared with 37.9% in the prior year period.
• Operating loss totaled $13.8 million, compared with operating income of $22.0 million in the prior year period.
• EBITDA was $63.8 million, compared with $102.9 million in the prior year period (see Note 1).
• Net loss totaled $90.3 million, or $5.00 per diluted share, compared with a net loss of $63.5 million, or $3.60 per diluted share, for the prior year period. The first quarter of fiscal 2011 included a charge of $9.5 million, or $0.52 per diluted share, associated with the Company's prepayment of its second lien term loan and refinancing of its revolving credit facility.

Comments
Bud Bergren, President and Chief Executive Officer, commented, “Our third quarter performance did not meet our expectations. Performance in our moderate traditional assortments was soft and customers were not accepting of price increases in these categories, which further pressured sales results.

Additionally, our marketing efforts did not drive the sales we had anticipated. Looking ahead, we believe our merchandise assortment will be better aligned with customer preferences as we have significantly expanded our stronger selling updated categories.

We are planning more aggressive promotional events to drive traffic and transactions. In addition, our strategic initiatives, which were launched in September, continue to perform ahead of the Company average. We believe our inventory is now priced appropriately and well-positioned heading into the holiday season and the changes we have instituted in merchandising and marketing will yield improved results in the fourth quarter.”

Sales
For the third quarter of fiscal 2011, comparable stores sales decreased 5.9%. Total sales for the thirteen weeks ended October 29, 2011 decreased 6.3% to $656.1 million compared with $700.5 million for the prior year period.

Year-to-date comparable store sales through October 29, 2011 decreased 3.0%. Year-to-date total sales through October 29, 2011 decreased 3.5% to $1,901.4 million compared with $1,970.5 million for the prior year period.

Other Income
Other income in the third quarter of fiscal 2011 was $14.5 million, compared with $16.4 million in the third quarter of fiscal 2010. Year-to-date other income decreased to $42.9 million, compared with $44.3 million for the same period last year. The decrease in other income in both the third quarter and year-to-date primarily reflects the current year decrease in sales volume.

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The Bon-Ton Stores Inc


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