Bon-Ton Q2 exceeds expectations

YORK, Pa. Bon-Ton reported that total sales for second quarter fiscal 2009 were $609.2 million compared with $673.4 million in second quarter fiscal 2008. Net loss totaled $34.8 million, or $2.04 per diluted share, for second quarter fiscal 2009 compared with a net loss of $33.8 million, or $2.01 per diluted share for second quarter fiscal 2008.

Bud Bergren, president and CEO, commented, “During the quarter, we reduced our comparable-store and clearance inventories and generated an approximate 130 basis-point improvement in our gross margin rate. We also realized a net reduction of $23.5 million in our selling, general and administrative expenses, bringing our year-to-date total expense savings to $42.4 million, and we are on track to exceed our guidance of $70 million in annual selling, general and administrative expense reduction.”

Bergren continued, “With two important quarters approaching, we feel very good about our execution during this recession and believe our assortment of differentiated quality merchandise at outstanding values is well-aligned with our customers’ needs for the fall and holiday seasons. Lastly, maintaining strong cash flow and liquidity remain a key priority for the company.”

For second quarter fiscal 2009, comparable-store sales decreased 9.8%. Total sales for the thirteen weeks ended Aug.1 decreased 9.5% to $609.2 million compared with $673.4 million for the prior year period.

Keith Plowman, EVP and CFO, stated, “We are revising our full year 2009 guidance for EBITDA to a range of $150 million to $170 million and loss per diluted share in the range of $3.70 to $2.50. Additionally, our current estimate for cash flow is a range of $15 million to $35 million for the year, permitting us to manage and reduce our debt levels. Assumptions reflected in our full-year guidance include comparable store sales decrease in the range of 7% to 9% and a gross margin rate of 36%.