Q3 comparable sales down 4.9 percent at Bon-Ton

Comparable store sales in the third quarter of fiscal 2016 decreased 4.9 at Bon-Ton Stores. Total sales in the period decreased 5.4 percent to 589.9 million dollars, compared with 623.4 million dollars in the third quarter of fiscal 2015, which the company said was primarily due to the impact that unseasonably warm weather on cold weather-related sales. Net loss was 31.6 million dollars or 1.58 dollars per diluted share, compared with net loss of 34 million dollars or 1.72 dollars same quarter, last year.

"Although our third quarter sales performance was impacted by warm weather in addition to soft traffic trends, we made progress on a number of our strategic initiatives. We delivered sales gains in several key categories as well as double digit growth in our omnichannel business and accelerated growth on our mobile site. In addition, we increased our gross margin rate by 170 basis points as a result of improved merchandise margin and reduced delivery costs,” said Kathryn Bufano, President and CEO in the company release.

Bon-Ton sees positive momentum in omnichannel

The company saw sales increases in furniture, dresses, denim, all active sportswear, contemporary plus, men's big and tall, and men's sportswear. Adjusted EBITDA was 10.6 million dollars compared to adjusted EBITDA of 5.7 million dollars in the third quarter of 2015.

The company saw accelerated growth in omnichannel, which reflects sales via its website, mobile site, and its Buy Online Pick Up In-Store initiative. The company also launched its Love Style Rewards program, rolled out a new and enhanced mobile site, expanded new brands and categories, and opened furniture departments in additional stores.

Gross profit decreased 1.3 million dollars to 207.1 million dollars as a result of lower sales volume, partially offset by improved merchandise margin and favourable delivery costs.

Warm weather expected to impact full year sales

The company said, as a result of unseasonably warm weather in the regions it operates and prevailing soft mall traffic trends, it is now forecasting loss per diluted share to be in the range of 2.04 dollars to 2.54 dollars and adjusted EBITDA to be in the range of 114 million dollars to 124 million dollars. Assumptions reflected in the company's revised full-year guidance include a comparable sales decrease ranging from 2.5 percent to 3.5 percent and a gross margin rate ranging from a 80- to 90-basis-point increase over the fiscal 2015 rate of 34.7 percent.

Picture:Bon-Ton Stores