Bon-Ton grows Q4 profit; plans new e-commerce fulfillment center

York, Pa. – An insurance settlement from a store damaged by fire helped The Bon-Ton Stores Inc. increase net income in the fourth quarter of fiscal 2014 to $71.7 million, up 17% from net income of $61.3 million in the same quarter of the previous fiscal year.



Sales grew 3%to $942.6 million from $914.9 million. Top-performing merchandise categories included cold weather and active apparel and home. The company continued its trend of double-digit sales growth in e-commerce in the period. Same-store sales rose 4.3%.



Bon-Ton plans to open a new e-commerce fulfillment center in fiscal 2015. The company expects the new center will facilitate significant expansion of its shipping capacity with improved operational efficiency and support the fastest-growing area of our business. Bon-Ton will also focus on building compelling assortments, refocusing its brand, driving omnichannel business, maximizing operating efficiency and managing inventory for profitability.



“We were pleased with our sales performance in the fourth quarter in both stores and e-commerce,” said Kathryn Bufano, president and CEO. “However, increased promotional activity in support of our initiative to drive incremental traffic as well as higher delivery expenses associated with our omnichannel operations resulted in a reduced gross margin rate in the fourth quarter. We managed our inventory such that we ended the period in line with our sales trend and well-positioned for spring selling.”



For the full fiscal year, Bon-Ton reported a net loss of $6.97 million, up from a $3.55 million net loss the prior fiscal year. Total sales decreased 0.5% to $2.76 billion from $2.77 billion. E-commerce sales increased more than 25% in fiscal 2014, the fifth consecutive year of sales growth in excess of 20%, driven by an expanded merchandise assortment, increased marketing expenditures and ongoing technology investments to improve the customer experience.