Bon-Ton Falls on Dismal Comps, Guides Low - Analyst Blog
January 13 2014 - 10:53AM
Zacks
Shares of Bon-Ton Stores Inc. (BONT) witnessed
a drastic fall of roughly 26% during the after-market trading
session on Jan 10, 2014, following soft December sales results and
a trimmed earnings outlook.
The departmental retailer stated that comparable-store sales for
the month of December were strongly affected by adverse weather
conditions. The company, which kick started the holiday season on a
strong note with Black Friday and exhibited a favorable trend into
early December, lost momentum owing to a bad winter coupled with
faulty commuting conditions.
Though unfavorable weather resulted in lower traffic count and
rendered its promotional offers ineffective in the main selling
season, its inventories for the month were significantly lower than
the previous-year level, positioning the company well for the
spring season.
Following the dismal results, Bon-Ton revised its guidance for
full-year fiscal 2013. It now envisions comps to dip 3.5% for
fiscal 2013, leading to a lowered guidance for earnings before
interest, income taxes, depreciation and amortization (EBITDA)
lying between $160–$170 million.
Given the trend so far, management is anticipating loss of 30 cents
to earnings of 15 cents a share for fiscal 2013. Earlier, the
company projected earnings in the band of 15-75 cents a share.
Bon-Ton is not the only company to have cut its forecast due to
lower-than-expected sales and margin pressure following intense
price competition that resulted in huge discounts. Retailers that
lowered guidance battered by the holiday results include
American Eagle Outfitters Inc. (AEO),
Pacific Sunwear of California Inc. (PSUN) and
L Brands Inc. (LB).
Apparel and accessories retailer, American Eagle, now expects its
fourth-quarter fiscal 2013 earnings to dovetail with the lower-end
of previously provided guidance range of 26 cents to 30 cents a
share.
Apparel retailer, Pacific Sunwear is anticipating the loss to
aggravate in the fourth quarter and projected loss of 18 cents to
21 cents a share. Earlier, it had forecasted loss between 12 cents
and 17 cents per share.
L Brands, the specialty retailer of women’s intimate and other
apparel, now anticipates fourth-quarter fiscal 2013 earnings to be
approximately $1.60 per share compared to its earlier forecast of
$1.67 to $1.82.
Currently, Bon-Ton holds a Zacks Rank #1 (Strong Buy). However, we
could witness a downward revision in the Zacks Rank in the coming
days given disappointing sales results and trimmed outlook.
AMER EAGLE OUTF (AEO): Free Stock Analysis Report
BON-TON STORES (BONT): Get Free Report
L BRANDS INC (LB): Free Stock Analysis Report
PAC SUNWEAR CAL (PSUN): Free Stock Analysis Report
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