Bon-Ton Stores reported operating results for the first quarter of fiscal 2015, the 13-week period ended May 2, 2015, and reaffirmed its earnings guidance for full-year fiscal 2015.
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Comparable store sales increased 0.8% as compared with the prior year period. Adjusted EBITDA was $4.1 million in the first quarter of fiscal 2015, compared with $7.1 million in the first quarter of fiscal 2014.
Net loss in the first quarter of fiscal 2015 was $34.1 million, or $1.74 per diluted share, compared with net loss of $31.5 million, or $1.63 per diluted share, in the first quarter of fiscal 2014.
Comparable store sales in the first quarter of fiscal 2015 increased 0.8% over the prior year period. Total sales increased 0.6% to $610.9 million, compared with $607.5 million in the first quarter of fiscal 2014.
Growth in our small and mid-tier stores continued to outpace that of our larger locations. Although not as robust as in prior periods, we continued our trend of double-digit sales growth in eCommerce in the period, primarily due to a higher conversion rate.
Other income in the first quarter of fiscal 2015 was $16.3 million, compared with $15.1 million in the first quarter of fiscal 2014. The increase was largely the result of increased revenues associated with the Company's proprietary credit card operations and increased delivery revenues.
Proprietary credit card sales, as a percentage of total sales, increased 159 basis points to 50.9% in the first quarter of fiscal 2015.
Gross margin decreased $7.9 million to $206.5 million in the first quarter of fiscal 2015 as compared with the comparable prior year period.
The gross margin rate in the first quarter of fiscal 2015 decreased 149 basis points to 33.8% of net sales, as a 17-basis-point improvement in merchandise margin was offset by increased distribution and delivery costs associated with our omnichannel selling efforts and an unfavorable comparison to prior year permanent markdowns.
In the first quarter of fiscal 2015, selling, general and administrative ("SG&A") expense was $218.7 million, a decrease of $3.6 million from the first quarter of fiscal 2014 results. This reduction was largely driven by expense control measures and avoidance of costs incurred in the prior year in the implementation of our expense efficiency initiative, partially offset by an unfavorable comparison to a prior year gain on the sale of assets.
We achieved an 80-basis-point reduction in SG&A rate, as the rate decreased to 35.8% of net sales, compared with 36.6% of net sales in the first quarter of fiscal 2014.
Kathryn Bufano, president and chief executive officer stated, "Based on our performance in the first quarter, we expect our comparable store sales growth assumption to be 2.0% to 2.5% in fiscal 2015, and we are reaffirming our fiscal 2015 guidance of Adjusted EBITDA in a range of $150 million to $160 million, earnings per diluted share in a range of a loss of $0.25 to earnings of $0.25 and cash flow (see Note 2) in a range of $5 million to $15 million.
"Our guidance does not reflect any potential impact associated with an early termination of our mortgage facilities, thereby excluding the financial effect of the make-whole provision in the agreements, which could range up to approximately $10 million."
Ms. Bufano added, "Our excess borrowing capacity under our revolving credit facility was approximately $368 million at the end of the first quarter of fiscal 2015." ■