Shaun Currie, CFA
Long/short equity, hedge fund analyst, momentum

The Bon-Ton Stores: Too Much Debt, Too Many Problems

The Bon-Ton Stores (NASDAQ:BONT) recently lowered guidance on its latest earnings call in August, sending shares lower. After reviewing the company, I believe that SG&A projections are still $50-60MM too aggressive, and that we will see further guidance reductions over the next several quarters. Normally $50-60MM in annual SG&A would not be a big deal, but considering the company only does about $90-$100MM in operating income annually (3% operating margins) and the fact that the company has only 20MM shares outstanding, I believe that EPS, EBITDA, and free cash flow guidance could be slashed from their already low levels. Furthermore, the company is extremely over-levered with debt and may be unable to meet future payments and maturities over...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details