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Bon-Ton announces Q2 fiscal 2008 results

22
Aug '08
The Bon-Ton Stores Inc reported results for the second quarter of fiscal 2008 ended August 2, 2008.

For the thirteen-week period ended August 2, 2008, the Company reported a net loss of $33.8 million, or $2.01 per diluted share, including a $17.8 million non-cash pre-tax goodwill impairment charge, or $0.72 per diluted share, compared with a net loss of $15.0 million, or $0.91 per diluted share, for the thirteen-week period ended August 4, 2007.

For the twenty-six-week period ended August 2, 2008, the Company reported a net loss of $67.9 million, or $4.04 per diluted share, including the non-cash goodwill impairment charge of $0.72 per diluted share, compared with a net loss of $44.3 million, or $2.68 per diluted share, for the comparable period last year.

Comments:
Bud Bergren, President and Chief Executive Officer, commented, "Our second quarter financial results reflect the continuation of the difficult macro-economic environment. Despite this, we successfully reduced our comparable store inventories by approximately 9%.

In addition, we continue to review our expenses and are pleased that during the second quarter we realized a net reduction of $9.3 million in our selling, general and administrative expenses. Lastly, we reduced our debt levels and increased our excess borrowing capacity under our credit facility, which improved our balance sheet as compared with the second quarter of fiscal 2007."

Mr. Bergren continued, "We are taking the appropriate actions in this environment by controlling our inventories, expenses and capital expenditures and identifying sales opportunities. We have many opportunities that we expect to take advantage of during the important fall and holiday seasons, such as new merchandise offerings, expanded eCommerce, fresh marketing initiatives and a new proprietary credit card loyalty program. We remain confident these actions will benefit both the short- and long-term growth of our Company."

Sales:
For the second quarter of fiscal 2008, comparable store sales decreased 5.7%. Total sales for the thirteen weeks ended August 2, 2008 decreased 5.0% to $673.4 million compared with $708.6 million for the prior year period.

Year-to-date comparable store sales decreased 5.1%. Year-to-date total sales decreased 5.0% to $1,373.6 million compared with $1,446.2 million for the same period last year.

Other Income:
Other income in the second quarter of fiscal 2008 decreased to $21.5 million compared with $22.3 million in the second quarter of fiscal 2007. Year-to-date other income decreased to $44.3 million compared with $45.1 million in the prior year period. The decrease in the second quarter and year-to-date fiscal 2008 amounts reflects the reduced sales volume.

Gross Margin:
In the second quarter of fiscal 2008, gross margin dollars decreased $28.0 million compared with the second quarter of fiscal 2007, reflecting the current year decrease in sales volume and a lower gross margin rate.


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