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Hit by unseasonable warmth that chilled sales of cold weather goods, the Bon Ton Stores Inc. on Tuesday announced a decrease in fourth quarter sales, which contributed to lower net income for the 13 week holiday period that ended Jan. 30.
Bon Ton posted fourth quarter net income of $50.6 million, or $2.42 per share. That’s a 29.5 percent drop from last year’s fourth quarter net income of $71.7 million, or $3.55 per share.
Total sales for the fourth quarter decreased 1.6 percent to $927.9 million. While the company said sales were “robust” from Black Friday through December, increases in active wear, men’s big and tall, young men’s and young contemporary were more than offset by a 10 percent drop in sales of cold weather items.
“This year we were hit hard by the unseasonably warm weather,” said Kathryn Bufano, Bon Ton president and CEO, in a conference call with analysts Tuesday.
The Bon Ton Stores Inc. enters the busy holiday shopping season on a sour note, reporting a third quarter net loss that was triple the deficit of a year earlier. That prompted the department store chain to skip its quarterly dividend and announce plans to cut $35 million in costs next year.
For fiscal year 2015, Bon Ton recorded a net loss of $57.1 million, or $2.90 a share. In fiscal 2014, the company posted a net loss of $7 million, or 36 cents per share.
For the year, total sales dipped 1.4 percent to $2.72 billion.
Bufano said on the call that Bon Ton is focused on improving its sales and earnings performance by expanding its successful brands, such as Under Armour, and adding new brands, such as Ugg in 2016.
she said, Bon Ton will begin its “Buy Online Pick Up in Store” initiative in the second quarter, with an anticipated rollout to all stores in September.
“Overall, I believe we have put in motion actions that will drive increased share of wallet with existing customers and win new customers to position us for long term success,” Bufano said.
When asked about store closings, Bufano said Bon Ton plans to close three stores in 2016, but she did not name the locations. Company spokeswoman Kim George said the closures will occur toward the end of the year.
Bon Ton, with corporate headquarters in York and Milwaukee, Wis., operates 267 stores under several store names in the Northeast, Midwest and upper Great Plains.
The company has eight stores, which employ about 650 people, within 30 miles of Allentown.
On Tuesday, Bon Ton’s stock closed at $2.35, down 26 cents, or almost 10 percent, from its previous close. A year ago, on March 16, 2015, its stock closed at $5.97.