Bon-Ton Narrows Loss

"The weather was definitely not beneficial to apparel sales," he said, adding that good weather during the first two weeks of April proved "people do bounce back." For April, comp store sales rose 4.9%. During the call, however, James H. Baireuther, vice chairman, chief administrative officer and CFO, stuck to an earlier guidance, which forecasts flat comp sales for full-year 2005.

First-quarter total sales declined 1% to $262.5 million, compared with $265.1 million in the same quarter the previous year. The strongest categories of this year's opening quarter were home, shoes, accessories and women's, while the weakest were dresses, juniors and childrens.

During the quarter, the department store owner spent approximately $1.2 million in costs associated with integrating Elder-Beerman, the 69-unit, Dayton, OH-based department store chain it acquired in October 2003. Total integration costs for the year are expected to be $1.5 million. No such costs are anticipated in 2006.

In addition, Baireuther said he expects a higher margin rate and lower selling, general and administration expenses in 2006, "although we're not ready to quantify those yet," he added. During the first quarter the company's gross margin rate increased from 36% for first-quarter 2004 to 36.2%, "primarily due to lower markdowns," he said.

Among the initiatives planned this year are the realization of improved synergies between Bon-Ton and Elder-Beerman units and better allocation and timing of inventory in stores. "For the full year," Baireuther said, "we should realize about $22 million in synergies," with an expectation that the larger share will come during the last half of the year.

An analyst, referring to the company's stock, which trades under BONT on the Nasdaq, said, "you're cheap on a lot of measures. What are you doing to get in front of Wall Street?"

Baireuther said, "We haven't really pursued coverage on the belief that if we performed well, the Street would recognize it." Meetings with analysts and investors in New York are planned for late summer, he added, "and we are going to increase our exposure."

By late afternoon on the day of the call, BONT shares traded at $18.05 a share, up more than 1.5% from the day before. The 52-week high is $19.78 a share, and the 52-week low is $9.84 a share. The locally based company operates 139 department stores and two furniture stores in 16 states from the Northeast to the Midwest under the Bon-Ton and Elder-Beerman names.