Bon-Ton Reports Flat December - Analyst Blog

Bon-Ton Stores Inc. (BONT) reported total sales of $510.8 million for December 2010, which dropped 0.1% from $511.1 million in the year-ago quarter. The company's comparable store sales inched up 0.1% for the month. The decline in revenues was due to heavy snow storms in the Northeast and Midwest, which eroded top line margin by 150-200 basis points (bps).

In the month of December, the categories which performed well are fine jewelry, hard and soft home, accessories, shoes and furniture. However, the performance from some of the categories such as ladies' ready-to-wear, children's and intimate apparel was not up to the mark, which hurt the top-line results.

The upside in the company's eCommerce sales during the month was robust, having more than doubled. Bon-Ton views online sales as a significant growth driver and is also taking initiatives to improve the customers' online shopping experience.

Bon-Ton's year-to-date total revenue jumped 0.7% year over year to $2.8 billion and same-store sales upped 1.0%.

Bon-Ton, headquartered in York, Pennsylvania and Milwaukee, Wisconsin ended the month with a revolving credit facility of $659 million.

However in November, total sales were $319.1 million, 2.7% higher than $310.8 million in the year-ago quarter. The company's comparable store sales grew 2.9% for the month. The upside in revenues was driven by strong Black Friday sales and cold weather merchandise purchases. Moreover, for fiscal 2010, the company expects same store sales in the range of 1% to 1.5%.

The Zacks Consensus Sales Estimate for the fourth quarter of 2010 is $1.0 billion and for fiscal 2010 is $3.1 billion. The Zacks Consensus EPS estimates for the fourth quarter and fiscal 2010 are $4.14 and $1.03, respectively. The estimates have not budged in the last 30 days. Hence we do not foresee any surprises during earnings and expect the company to report in-line results.

The stock has a Zacks #3 Rank (short-term Hold recommendation). We also reiterate our long-term Neutral rating on Bon-Ton.

One of its competitors, Dillard's Inc (DDS) reported a 6% growth in total sales and a 7% increase in same stores sales for December.

Bon-Ton has 277 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.

 
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