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The Bon-Ton Stores books losses in Q3

22
Nov '08
For the thirteen-week period ended November 1, 2008, the Company reported a net loss of $14.3 million, or $0.85 per diluted share, including a favorable tax benefit adjustment of $7.0 million, or $0.42 per diluted share, pursuant to the provisions of Financial Accounting Standards Board Interpretation No. 48, compared with a net loss of $19.4 million, or $1.17 per diluted share, for the thirteen-week period ended November 3, 2007.

For the thirty-nine-week period ended November 1, 2008, the Company reported a net loss of $82.2 million, or $4.90 per diluted share, including the second quarter non-cash goodwill impairment charge of $0.71 per diluted share and the favorable tax benefit adjustment in the third quarter of $0.42 per diluted share, compared with a net loss of $63.6 million, or $3.86 per diluted share, for the comparable period last year.

Sales:
For the third quarter of fiscal 2008 ended November 1, 2008, comparable store sales decreased 8.3% compared with the prior year period. Total sales decreased 7.2% to $724.9 million compared with $780.8 million for the prior year period.

Year-to-date comparable store sales decreased 6.3% compared with the prior year period. Year-to-date total sales decreased 5.8% to $2,098.6 million compared with $2,227.0 million for the same period last year.

Other Income:
Other income in the third quarter of fiscal 2008 decreased to $22.7 million compared with $24.8 million in the third quarter of fiscal 2007. Year-to-date other income decreased to $67.0 million compared with $69.9 million in the prior year period. The decrease in the third quarter and year-to-date fiscal 2008 amounts primarily reflects the reduced sales volume.

Gross Margin:
In the third quarter of fiscal 2008, gross margin dollars decreased $13.9 million compared with the third quarter of fiscal 2007, reflecting the current year decrease in sales volume. The gross margin rate for the third quarter of fiscal 2008 increased by 0.8 percentage point to 35.6% of net sales compared with 34.8% in the third quarter of fiscal 2007, primarily due to decreased markdowns on lower levels of inventory and improved inventory aging as well as reduced distribution costs.

Year-to-date gross margin dollars decreased $51.0 million compared with the prior year period, reflecting the current year decrease in sales volume and margin rate. The year-to-date gross margin rate decreased 0.3 percentage point to 35.1% of net sales compared with 35.4% in the prior year period, reflecting an increased net markdown rate.

Selling, General and Administrative Expenses:
Selling, general and administrative ("SG&A") expenses in the third quarter of fiscal 2008 decreased $3.5 million to $261.9 million compared with $265.4 million in the third quarter of fiscal 2007. The SG&A expense rate for the third quarter of fiscal 2008 was 36.1% compared with 34.0% for the third quarter of fiscal 2007, reflecting the reduced sales volume.


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