Bon-Ton comp-store sales decreased 4.8% for the quarter. By contrast, Carson's comp-store sales were up 7.8%, compared with its previous third quarter, and up 4.3% for the period ranging from the time of its acquisition by Bon-Ton from March 5 through Oct. 28. Combined comp-store sales of the Bon-Ton and Carson's nameplates rose 3.3% for the 13 weeks ended Oct. 28.
Gross margins rose significantly during the quarter, up 2.8% to represent 36.6% of net sales, compared with 33.8% for the prior-year period. During a conference call, management attributed the margin increase to fewer markdowns on regular price merchandise.
Bud Bergren, president and CEO, acknowledged that tickets were up, but traffic was off in Bon-Ton units for the quarter. As in a second-quarter conference call, Bergren reiterated, "this is a year of transition." He said, "we've made great progress on integration," and said full results would not occur until 2008.
Private brands met with "favorable response," Bergren said. As a result, more will be rolled out in 2007. Among them will be Laura Ashley apparel in special sizes and shoes and accessories and a new Breckenridge brand to be introduced in spring 2007.
The company reaffirmed its 2006 guidance, which calls for earnings per share of between $2.15 and $2.25 and Ebitda of between $270 million and $280 million for full 2006."We succeeded in meeting key milestones during third quarter," Bergren said, referring to the integration of the Bon-Ton and Carson's operations. The company said it had realized $6 million in cost savings from integration to date and anticipated savings of $25 million in 2007.
Wall Street analysts generally applauded the company's progress on integration. BONT stock ended trading on the Nasdaq at $37.68 a share on Nov. 29, following the conference call, up more than 16.7% a share for the day, which was a positive day for the overall exchange. This rise approaches Bon-Ton stock's 52-week high of $38.60 a share and more than doubles the 52-week low of $17.71 a share.
Bon-Ton now operates 275 department stores and seven furniture galleries in 23 states under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers names plates in addition to four Parisian units in Detroit, Indianapolis, and Dayton, OH.
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