Bon-Ton Stores did not become profitable as it expected in the third quarter due to lower sales and costs from nearly doubling in size through last year's acquisition of Elder-Beerman stores.
The Bon-Ton, which has 10 stores in Western New York, lost $745,000 or 5 cents per share compared with a loss of $1.7 million or 11 cents per share in the prior year. A large part of the loss last year -- 10 cents per share -- was due to the acquisition of Elder-Beerman in October 2003.
For the nine months ended Oct. 30, the Bon-Ton lost $6.7 million or 42 cents per share versus a loss of $3.8 million or 25 cents per share in the prior year, including the acquisition costs.
The Bon-Ton expected to lose money in the first two quarters, but executives had expected to become profitable this quarter. The disappointing results caused the Bon-Ton to revise its expected earnings for fiscal 2004 to $1.20 to $1.30 per share. The company previously expected to make $1.20 to $1.40.
Bon-Ton made $1.52 per share in the fourth quarter of last year. It would have to make $1.62 per share this year to make the low end of its earnings estimate.
Comparable store sales for the Bon-Ton fell 3.1 percent in the third quarter and 1.9 percent for the year to date. Comparable stores sales at Elder-Beerman fell 4.8 percent in the third quarter and 3.4 percent for the year to date. For Elder-Beerman and Bon-Ton combined, comparable store sales for the third quarter fell 3.9 percent and year-to-date comparable store sales decreased 2.6 percent.
For the year to date, the Bon-Ton improved its gross margin by 0.9 percent to 37.1 percent.
Bon-Ton shares closed at $13.63 Thursday on Nasdaq, up 24 cents.
The Bon-Ton operates 141 department stores in 16 states from the Northeast to the Midwest under the Bon-Ton and Elder-Beerman names.