York, PA—Bon-Ton Stores today reported a 17.6% drop in its fourth quarter profit but narrowed its loss for 2013. The department store company also revealed that President/CEO Brendan Hoffman would step down when his contract expires in February 2015.
Saying that his departure was for “strictly personal reasons,” Hoffman said he remains “committed to continuing to execute the strategic initiatives we put forward as the company searches for a new chief executive officer.”
Snowstorms a Factor
“Despite disappointing fourth quarter sales results, we continued to make progress on several strategic initiatives that we believe will drive improved performance,” Hoffman noted. “Multiple snowstorms and the polar vortex during the December and January periods resulted in a sharp decline in traffic and, therefore, we were unable to achieve our comparable store sales goals in the fourth quarter.”
For the quarter ended Feb. 1, Bon-Ton reported net income of $61.34 million, or $3.04 a share, compared with $74.41 million, or $3.71 a share, in the prior-year quarter. That was good enough to beat analysts’ average estimate for $2.74 a share.
But revenue missed estimates. Total sales were $934.62 million, down from $1.03 billion last year, missing analysts’ consensus for $980.95 million in sales. Comparable store sales were down 7.3%.
Gross margin, however, improved 10 basis points to 36.3% from last year, and selling, general and administrative expenses increased 110 basis points to 27.1% from a year ago.
For 2013 in total, Bon-Ton’s net loss narrowed to $3.6 million, or 19 cents a share, compared to the loss of $21.6 million, or $1.16 a share, in fiscal 2012. Total sales were down 5.1% to $2.77 billion.
Looking ahead to 2014, the company forecast earnings in a range of 40 to 70 cents a share on a comparable store sales increase of 1% to 3%. Analysts’ consensus is looking for 99 cents a share on sales of $2.93 billion.
“We are excited about our new e-commerce fulfillment center, which will permit significant expansion of our shipping capacity with improved operational efficiency. We will continue strengthening our foundation to deliver profitable sales growth in the coming years,” added Hoffman, who previously was chief executive at Lord & Taylor.