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Bon-Ton Q2 comparable store sale declines 1.3 percent

By Prachi Singh

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Comparable store sales in the second quarter of fiscal 2015 at Bon-Ton Stores decreased 1.3 percent and total sales in the period decreased 1.4 percent to 555.4 million dollars, compared with 563.5 million dollars in the second quarter of fiscal 2014. Year-to-date fiscal 2015 comparable store sales decreased 0.2 percent.

Commenting on the company’s performance, Kathryn Bufano, President and Chief Executive Officer, said, “While our second quarter sales results were challenged, we saw meaningful improvement in our gross margin rate and effectively managed expenses, enabling us to achieve adjusted EBITDA in line with that of last year. Sales were pressured by unseasonably cool weather, which impacted our seasonal classifications, and by weakness in overall traffic trends.”

“Looking ahead”, Bufano added, “we believe that some of the macro pressures that impacted our sales during the second quarter will continue into the second half and, therefore, we are reducing our fiscal 2015 adjusted EBITDA guidance to a range of 145 million dollars to 155 million dollars.”

The gross margin rate increased 24 basis points as compared with the second quarter of fiscal 2014 to 36.8 percent of net sales, largely the result of reduced net markdowns. Gross margin decreased 1.6 million dollars to 204.6 million dollars as a result of the decreased sales volume in the period.

For fiscal 2015, the company now expects adjusted EBITDA in a range of 145 million dollars to 155 million dollars and earnings per diluted share in a range of a loss of 0.40 dollar to 0.90 dollar on an adjusted basis to reflect the 4.9 million dollars loss on extinguishment of debt associated with the early termination of a mortgage facility. Assumptions reflected in our full-year guidance include a comparable store sales performance ranging from a 1 percent to 1.5 percent increase and a gross margin rate ranging from a decrease of 10 to 30 basis points from the fiscal 2014 rate of 35.7 percent, among other factors.

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