Bon-Ton's Dec Comps Up

The departmental store chain, Bon-Ton Stores Inc. (BONT), recently reported a 2.4% upside in same-store sales (comps) for the five-week period ended December 29, 2012, despite challenging weather conditions.

This compared favorably with a 0.7% decline in the year-ago period. The comps benefited from continuous efforts to improve the merchandise collection, a strong promotional calendar and the enhancement of marketing program.

Total sales crept up 1.5% to $512.9 million in the month of December. A new Goodwill Sale event in early December for the local communities must have helped drive monthly sales.

Categories like fine jewelry, ladies’ sportswear and dresses across all sizes, along with ladies’ outerwear and shoes performed well in the month. The company’s eCommerce business deserves a special mention, as it posted double-digit sales growth.

Bon-Ton’s year-to-date total revenue nudged up 0.3% year over year to $2,718.6 million while comps were down 0.6%. On the inventory front, the company ended the month with fewer goods, which will likely better place the company for the spring season.

Bon-Ton, headquartered in York, Pennsylvania and Milwaukee, Wisconsin, reiterated its outlook for 2012. The company expects fiscal 2012 results to range between a loss of $1.35 per share and a profit of 20 cents per share. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to be in the range of 160 million and $190 million.

Bon-Ton remains upbeat on its upcoming fourth quarter result. Superstorm Sandy will have negligible impact on its business. The Zacks Consensus Estimates for the fourth quarter is pegged at $3.90 reflecting year-over-year growth of 27.04%.

The stock has a Zacks #1 Rank (Strong Buy). We reiterate our long-term Neutral recommendation on Bon-Ton. Same-store sales at Bon-Ton’s rival Kohl’s Corporation (KSS - Analyst Report) jumped 3.4% in December with a total sales increase of 4.0% in the period