The Bon-Ton Stores reported operating results for the second quarter of fiscal 2015 ended August 1, 2015. Comparable store sales decreased 1.3%.
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Total sales in the period decreased 1.4% to $555.4 million, compared with $563.5 million in the second quarter of fiscal 2014.
Other income in the second quarter of fiscal 2015 was $15.6 million, compared with $14.7 million in the second quarter of fiscal 2014. The increase was largely the result of increased revenues associated with company's proprietary credit card operations. Proprietary credit card sales, as a percentage of total sales, increased 223 basis points to 53.2% in the second quarter of fiscal 2015.
The gross margin rate in the second quarter of fiscal 2015 increased 24 basis points as compared with the second quarter of fiscal 2014 to 36.8% of net sales, largely the result of reduced net markdowns.
A 52-basis-point increase in merchandise margin rate was partially offset by increased distribution and delivery costs associated with omnichannel selling efforts in the current quarter.
Gross margin decreased $1.6 million to $204.6 million in the second quarter of fiscal 2015 as a result of the decreased sales volume in the period.
In the second quarter of fiscal 2015, SG&A expense was $215.2 million, a decrease of $0.6 million from the second quarter of fiscal 2014 results.
This reduction was largely driven by expense control measures and avoidance of costs incurred in the prior year related to the implementation of company's expense efficiency initiative, partially offset by increased advertising expenses and continued investment in omnichannel operations and information technology.
SG&A expense rate increased 44 basis points to 38.7% of net sales in the second quarter of fiscal 2015 as a result of the decreased sales volume in the period.
We recorded a gain of $0.7 million for an insurance settlement in the second quarter of fiscal 2015, a residual of claims associated with one store that experienced fire damage in the fourth quarter of fiscal 2014.
In the second quarter of fiscal 2015, we recorded a $4.9 million loss on extinguishment of debt due to the early termination of one of the company's mortgage facilities. As a result of the prepayment, we paid an early termination fee of $4.7 million.
Additionally, unamortized deferred financing fees were accelerated on the date of termination.
The company's excess borrowing capacity under its revolving credit facility was $265.2 million at the end of the second quarter of fiscal 2015.
For fiscal 2015, the company now expects Adjusted EBITDA in a range of $145 million to $155 million.
Earnings per diluted share are expected to be in a range of a loss of $0.40 to $0.90 on an adjusted basis to reflect the $4.9 million loss on extinguishment of debt associated with the early termination of a mortgage facility (as previously announced, not reflected in original guidance)
Cash flow is now expected to be in a range of ($5) million to $5 million and has been adjusted to include the early termination fee. ■