After experiencing a dip in comparable store sales for all the months in a year barring one, Bon-Ton Stores Inc. (BONT) recently reported a 1.5% upside in same-store sales for the four-week period ended May 26, 2012. This compared favorably with a 2.3% decline in the year-ago period and also marks the highest monthly comps increase in a year.
The comps benefited from new product offering and enhancement of marketing program. Earlier in February 2012, the company posted a 0.7% upside in same-store sales.
Total sales crept up 1.2% to $183.1 million during the four-week period ended May 26, 2012 from $181.0 million in the comparable period ended May, 2011.
May comps were primarily driven by improved performance of ladies’ ready-to-wear, particularly moderate sportswear. Additionally, Bon-Ton recorded double-digit sales growth in eCommerce and considers it to be a significant growth driver. Moreover, the company’s various efforts such as market share expansion of updated merchandise and marketing initiatives are expected to drive sales further. To support sales initiatives, the department store chain also increased its month-end inventories by 3%.
Bon-Ton’s year-to-date total revenue slipped 0.8% year over year to $823.9 million and same-store sales were down 0.7%.
Same-store sales at Bon-Ton’s rival, Kohl’s Corporation (KSS) fell 4.2% in the four-week period ended, May 26, 2012. Total sales fell 2.6% for the period.
The upside in comps is quite encouraging, but will not be sustainable as the company estimates comparable store sales in the range of negative 1.5% to positive 1.0% for 2012.
For 2012, Bon-Ton expects earnings in the range of loss of 95 cents per share to a profit 50 cents per share, down from its prior outlook of a profit of 15 cents to 75 cents per share. EBITDA is expected between $160 million and $190 million, below the previous guidance of $180 million–$200 million.
The Zacks Consensus EPS estimates for the second quarter and fiscal 2012 are pegged at a loss of $1.78 and 52 cents, respectively. The estimates have not budged in the last 7 days, implying that the analysts do not see any near-term catalysts.
The stock has a Zacks #3 Rank, implying a short-term Hold rating. We also reiterate our long-term Neutral recommendation on Bon-Ton.
York, Pennsylvania and Milwaukee, Wisconsin-based Bon-Ton has 272 department stores, which include 11 furniture galleries in 23 states in the Northeast, Midwest and upper Great Plains. Its brands comprise Bon-Ton, Bergner’s, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger’s, Younkers and Parisian.
BON-TON STORES (BONT): Free Stock Analysis Report
KOHLS CORP (KSS): Free Stock Analysis Report
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