The Bon-Ton Stores reported operating results for its fiscal second quarter ended July 30, 2016.
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Comparable store sales decreased 2%. Total sales in the period decreased 2.4% to $542.4 million, compared with $555.4 million in the second quarter of fiscal 2015.
Sales increases were achieved in Activewear, Big & Tall, Denim, Young Men's, Young Contemporary Plus, Women's Better Handbags, Hard Home and Furniture.
The company achieved accelerated growth in omnichannel, which reflects sales via its website, mobile site, and its Buy Online Pick Up In-Store and Let Us Find It initiatives, as it continued to successfully leverage its West Jefferson facility and expanded store-fulfillment network.
Other income in the second quarter of fiscal 2016 was $16.3 million, an increase of $0.7 million over the comparable prior year period. The increase was largely the result of higher revenues associated with the company's proprietary credit card operations.
Proprietary credit card sales, as a percentage of total sales, increased 390 basis points to 57.1% in the second quarter of fiscal 2016.
Gross profit decreased $6.5 million to $198.1 million in the second quarter of fiscal 2016, primarily as a result of decreased sales volume. The gross margin rate in the second quarter of fiscal 2016 was 36.5% of net sales as compared to 36.8% in the same quarter last year.
Selling, general and administrative (SG&A) expense in the second quarter of fiscal 2016 decreased $3.3 million, or 1.5%, to $211.9 million, compared to the second quarter of fiscal 2015.
This was largely due to a benefit from a mid-single digit decline in non-customer facing store expenses, partially offset by higher medical claims, as well as severance costs and consulting expenses associated with the company's cost reduction initiatives.
The SG&A expense rate in the second quarter of 2016 was 39.1% of net sales, an increase of 40 basis points over the prior year, primarily as a result of the decreased sales volume in the period.
Excluding the severance and consulting costs in the second quarter of fiscal 2016, as well as the severance costs in the second quarter of fiscal 2015, SG&A expense in the second quarter of fiscal 2016 decreased $6.9 million from the comparable prior year period, and the SG&A expense rate leveraged 40 basis points, to 38.2%.
As of July 30, 2016, the company had approximately $225 million of borrowing capacity under its revolving credit facility and expects to decrease debt by approximately $40 million to $50 million by the end of the year.
For fiscal 2016, loss per diluted share is expected to be in a range of $0.95 to $1.45. The company continues to expect Adjusted EBITDA in a range of $130 million to $140 million. ■