Bon-Ton Stores reports Q4 profit
York, Pa. Bon-Ton Stores returned to a fiscal fourth-quarter profit Wednesday, benefiting from lower charges, tight inventory management and cost-control efforts.
Bon-Ton reported that it earned $80.3 million for the period ended Jan. 30, compared with a loss of $87.7 million a year earlier.
Bon-Ton’s impairment charge of $5.4 million was considerably lower than $25.9 million charge incurred in the prior-year period. The current quarter also included a favorable tax carryback of $6.3 million, while the year-ago period had a $108.5 million charge related to a deferred tax asset valuation allowance.
Selling, general and administrative expenses declined slightly to $269.1 million from $269.4 million.
Sales dipped 3% to $1 billion from $1.03 billion.
Same-store sales dropped 2.4% in the quarter.
For the year, Bon-Ton narrowed its loss to $4.1 million from a loss of $169.9 million in the previous year.
Annual sales slipped 5% to $2.96 billion from $3.13 billion, while same-store sales fell 5.4%.
A perfect storm for shoplifters
Retailers are fortunate the majority of customers are honest and choose to pay for the items they need and want. However, even the most well intentioned shoppers can succumb to the allure of theft when their moral compass is exposed to the polarizing forces of a recessionary economy and a retail environment where the perceived risk of apprehension is low due to thinly staffed stores. As a result, retail theft characterized as amateur or opportunistic is on the rise, according to 78% of retailers responding to a survey conducted by the Retail Industry Leaders Association (RILA). While amateur and opportunistic thieves are more active, all types of theft have increased, with 74% of retailers reporting seeing an increase of stolen items found in online marketplaces, and 65% reporting increased theft by organized groups.
A rebound awaits in key categories
Target is the beneficiary of a perceived quality gap relative to Walmart, and that typically helps it in head-to-head comparisons where such categories as apparel and home are concerned. Unfortunately, consumer decision-making is seldom so linear, and Target has a slew of other retailers against whom it must compete, and recent sales results suggest it has work to do. Target has reported weak (flat or declining) results for its apparel and home categories and did so again in February. However, such companies as TJX, Ross and Kohl’s, which appeal to the same value-oriented shoppers as Target, produced solid gains. TJX said its February same-store sales increased 10%, Ross produced an 11% increase and Kohl’s was up 3.7%. Also producing gains were such competitors as Nordstrom, Macy’s and JCPenney, which serve customers squarely in the crosshairs of Target’s “expect more, pay less” value proposition. Macy’s reported a better-than-expected increase of 3.7%, and Nordstrom topped analysts’ views with a 10.3% increase. JCPenney’s same-store sales rose 1.2%, which was also better than expected.