Why Shares of Bon-Ton Stores Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Bon-Ton Stores (NASDAQ: BONT  ) were looking stunning, finishing up 24% after a better-than-expected third-quarter earnings report.

So what: The parent of department stores such as its namesake Bergner's, Boston Store, posted a smaller-than-expected loss at $0.05 per share, up from a $0.55 loss a year ago. Analysts had expected a $0.29 shortfall. Nonetheless, same-store sales fell 2.8%, though CEO Brendan Hoffman said, "We saw meaningful improvement in comps toward the end of the quarter." Reduced expenses boosted the bottom line, and the company maintained its full-year EPS guidance. However, the provided range of $0.15-$0.75 was so wide as to be nearly meaningless. Analysts expect $0.46 a share.

Now what: While the solid earnings beat is encouraging, declining same-store sales are always a warning sign for retailers, and Bon-Ton also missed sales estimates by a considerable margin. The fourth quarter is where the company makes its money, and Hoffman said, "We are looking forward to the holiday selling season with a fresh and inspired merchandise assortment," and promised continued cost-cutting. Other retailers have warned about the holiday season, but if management follows through, shares could bounce again. Keep your eye on same-store sales, though, as another decline could be a signal to sell.

One stock for 2014
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2738583, ~/Articles/ArticleHandler.aspx, 9/29/2016 4:49:56 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 4:00 PM
BONT $1.67 Up +0.06 +3.73%
The Bon-Ton Stores CAPS Rating: *