The Bon-Ton Stores' (BONT) CEO Kathryn Bufano on Q3 2016 Results - Earnings Call Transcript

| About: The Bon-Ton (BONT)

The Bon-Ton Stores, Inc. (NASDAQ:BONT)

Q3 2016 Earnings Conference Call

November 17, 2016 10:00 AM ET

Executives

Wendy Wilson - VP of Investor Relations

Kathy Bufano - President and Chief Executive Officer

Nancy Walsh - EVP and Chief Financial Officer

Analysts

Kristen McDuffy - Goldman Sachs

Carla Casella - JP Morgan & Co.,

Karru Martinson - Jefferies LLC

Jenna Giannelli - Citigroup Global Markets, Inc.

Steven Ruggiero - R.W. Pressprich & Co.

Operator

Good day, ladies and gentlemen, and welcome to The Bon-Ton Stores, Incorporated Fiscal Third Quarter Results Call. Today's conference is being recorded.

And at this time, I would like to turn the floor over to Wendy Wilson. Please go ahead.

Wendy Wilson

Thank you, operator. Good morning, everyone, and welcome to Bon-Ton's third quarter 2016 earnings conference call. My name is Wendy Wilson and I am Bon-Ton's VP of Investor Relations. Kathy Bufano, President and CEO, and Nancy Walsh, Executive Vice President and CFO, will host today's call.

You may access the copy of our earnings release on the Company's website at www.bonton.com, or by calling 203-682-8200. The statements contained in this conference call which are not historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in such statements due to a number of risks and uncertainties, including those set forth in our cautionary note in our earnings release and all of which are described in our filings with the SEC.

With that, I’ll turn the call over to Kathy.

Kathy Bufano

Thank you, Wendy. Good morning and thank you for joining us today. I’ll begin the call with a recap of our third quarter followed by our plans for the remainder of the year. Comparable store sales in the third quarter decreased 4.9% year-over-year, largely resulting from unseasonably warm weather as well as continued weakness in mall traffic trends. This caused a significant drop in sales. Based on these trends we are revising guidance for the rest of this year. Nancy will provide additional detail on the quarter and provide an update on our financial outlook for fiscal 2016 later on the call.

Despite the headwinds that we faced during the quarter we executed our plan to upgrade our customers’ shopping experience. We completed our Buy Online Pick-Up In-Store rollout, launched our LoveStyle Rewards loyalty program, and implemented a new mobile and omnichannel initiative.

We expanded our localized content, tested our Close to Home merchandise sourcing initiative in select markets and expanded furniture locations as well as expanding several brands and categories. We also prudently managed our inventory to ensure that our assortment is fresh heading into our busiest season of the year. Despite topline pressure, we drove gross margin expansion by a 170 basis points to 35.1%.

As a result of reduced markdowns, lower distribution cost and delivery expense in addition to a reduction of promotional gift cards. We also made progress on our cost saving initiatives in the quarter, and we remain on track to achieve our previously stated $21 million, $24 million net SG&A and cost of good savings which Nancy will speak to in more detail shortly.

Adjusted EBITDA for the quarter was $10.6 million versus adjusted EBITDA of $5.7 million in the third quarter of fiscal 2015. Excluding the financial impact of the severance costs and consulting expenses, adjusted EBITDA was $12.7 million in the third quarter of fiscal 2016, an increase of $7 million. Our commitment to disciplined inventory management continues, as evidenced by our 4.9% inventory reduction this quarter.

We better managed timing of receipts to improve freshness especially as we head into the holiday season and more closely aligned inventory to customers’ shopping behavior. In addition we had another quarter of reduced aging. We continue to strengthen our connection with customers through our private label credit card program. During the quarter sales to PLCC customers remained strong at a 57% sales penetration.

We adapted some of our PLCC learnings to develop our new LoveStyle Rewards loyalty program for our non-PLCC customers, which launched in the second week of October. This provides non-PLCC customers the opportunity to pay their way and earn loyalty rewards. This program will provide greater insight into our customer base and drive increased engagement.

Since launching we signed up over 90,000 customers to date, exceeding our expectations and providing a springboard to expand the program as we enter the holiday season. Another major initiative is omnichannel strategy. We delivered 27% comp sales growth in our omnichannel business and expanded our store fill capability to 150 locations.

We made a number of improvements to our mobile experience, including the launch of a new responsive mobile site that just went live at the end of the quarter. The mobile navigation is designed so shoppers make fewer clicks to search for products and includes add-on functionality that allows us to make further enhancements to the site in the future. We will continue to invest in digital media for mobile.

In terms of performance upgrades to our mobile platform this year drove a 30% increase in traffic and a 43% improvement in conversion in the quarter. Our total mobile demand has increased over 73% in the third quarter and performed with strong momentum. Another one of our successes in the quarter was the grand reopening of our Evergreen Park, Illinois store on the southwest side of Chicago.

We moved out of a three-level, 240,000 square foot mall-based location built in 1955 into a brand-new 120,000 square foot store next door that will be located next to a redesigned shopping center. We remerchandised this new location, introducing new brands, and we are very happy with response from the community.

Since our grand reopening on September 14 to the end of the quarter, sales in that store were up 68% year-over-year. If you ever travel to Chicago, we invite you to visit the store. It is a great example of what we can do to drive increased sales in a brick-and-mortar environment.

We are on track to close five stores that have leases expiring at the end of this year as we continue to assess our real estate. Today we have announced three store closings: a Bergner's in Illinois, a Bon-Ton in Connecticut, and an Elder-Beerman store in Ohio. We will review our leases as they come up for renewal in 2017 and evaluate all options available to us.

Our expansion of furniture into 24 additional stores has performed well for us. Customers have responded favorably, as evidenced by the 10.9% year-over-year increase in the category. Mattresses led the way during the quarter, with strong double-digit growth. Our mattress business growth is partially driven by the installation of our find your sleep style stations. These stations, which we have rolled out to 32 of our stores, identify the perfect mattress for each customer based on their preferred sleeping style. Our plan is to expand the find your sleep style stations to additional doors in 2017.

In November we are expanding into two more furniture locations, in addition to the 24 added in quarter three, which will bring us to a total of 64 locations as we head into the holidays. Sales of cold weather outerwear and associated categories were down double digits, negatively impacted by exceptionally warm fall season. However, we experienced continued strength from our other growth initiatives, including furniture, dresses, denim, all active sportswear, contemporary plus, men's big and tall, and men's sportswear.

During the quarter we expanded the Under Armour collection to all doors, Under Armour ladies and kids footwear to 50 doors, and we launched Under Armour men's footwear and golf in 100 doors. Jones New York, which was not in our stores at this time last year, was added to 50 doors. We also launched UGGs in 60 doors and Tommy Hilfiger intimate apparel and Tommy suiting for women in 100 doors. All these brands are also available online.

We also added fine jewelry to four more doors in the quarter and plan to expand fine jewelry to five additional stores in 2017 for a total of [indiscernible] locations. We believe that strengthening our merchandise offering provides an opportunity for us to reach a broader customer base.

Turning to our private brand strategy, performance overall was softer than expected during the quarter as sales in cold weather categories affected results. We experienced strength in our Home and Activewear categories as well as Studio Works and Ruff Hewn in ladies sportswear. Overall, I believe we have a compelling private brand assortment that delivers quality, price, and exclusivity to our customers.

During the quarter localized content represented 16% of our seasonal assortment. We tested a new localized sourcing initiative called Close to Home that features locally made products in our stores, which is getting good reviews and great support from local vendors. The response to Close to Home has been so positive that we are expanding the initiative. As we look to 2017, we believe this will be a 200-plus store opportunity.

As we enter the all-important holiday season, our focus is on expanding in-store special events. Our very popular Santa Fest events will be held two Saturdays in December, with Santa at every location. And we have scheduled a special holiday VIP shopping event for our loyal PLCC customers. We will be holding beauty and style events throughout the season, including our Very Merry Beauty Bash featuring makeup artists, DJs, and giveaway opportunities for our customers who visit our stores to shop.

For holiday, we will also expand our gourmet food and gift categories, window treatments, decorative pillows and introduce greeting card assortments. We recognize that the retail environment continues to be challenging. However, we remain focused on executing our strategic initiatives in addition to maintaining disciplined inventory controls and delivering against our cost savings plan.

To date we have made meaningful progress on several fronts designed to strengthen our competitive positioning. This includes evolving the merchandise assortment that resonates with our customers and emphasizing categories where we see the greatest opportunities; launching our new LoveStyle Rewards loyalty program and providing upgraded mobile and omnichannel capabilities, such as Buy Online Pick-Up in Store. We believe that we are well positioned with a compelling and relevant assortment and strong marketing messages that will engage our customers.

With that, I will turn the call over to Nancy.

Nancy Walsh

Thank you, Kathy, and good morning, everyone. As Kathy mentioned, we have made meaningful progress across a number of initiatives that had a positive impact on our results. However, weak traffic trends and unseasonably warm weather continue to challenge our sales performance.

Turning to our third quarter 2016 financial results, comparable sales decreased 4.9% in the quarter to $584.4 million, and total sales decreased 5.4% to $589.9 million. Despite planning cold weather conservatively, the majority of our sales mix is a result of the unseasonably warm weather. Excluding the negative impact from cold-weather categories, our total sales decreased to 2.6%.

As Kathy stated, we saw continued momentum in our omnichannel sales. Proprietary credit card sales as a percentage of total sales increased 250 basis points to 57% in the third quarter of fiscal 2016. As you know, these are our best customers. They shop more frequently and generate a higher transaction size than non-cardholders.

Gross profit decreased $1.3 million to $207.1 million over the third quarter last year, primarily due to lower sales volumes. However, our gross margin rate increased 170 basis points in the quarter to 35.1% of net sales, due primarily to reduced markdowns, lower distribution costs, and delivery expense, as well as a reduction in promotional gift cards.

Our SG&A expense decreased $6.4 million or 2.9% to $213.8 million for the quarter as we continue to execute against our cost savings program. This was largely due to savings related to non-customer-facing expenses, partially offset by higher medical claims as well as the consulting expenses and severance associated with the Company's cost savings initiatives.

The SG&A expense rate in the third quarter of 2016 was 36.2% of net sales, an increase of 90 basis points over the prior year, primarily as result of the decreased sales volume in the period. Excluding the $2.1 million of consulting cost and severance in the third quarter, SG&A expense in the third quarter of fiscal 2016 decreased $8.6 million from the comparable-year period. We remain on track to achieve our previously stated goal of $21 million to $24 million net SG&A and cost of goods savings.

With respect to additional cost savings initiatives, we partnered with FedEx to refine our contract, which will generate an additional $2.3 million of delivery cost savings for the first 12 months beginning in October of 2016. We will see an additional $700,000 savings in Q4, which is incremental to last year's previously announced renegotiated FedEx contract, which will generate $40 million of delivery cost savings over three years.

This resulted in adjusted EBITDA of $10.6 million in the third quarter. Excluding the consulting costs and severance of $2.1 million, adjusted EBITDA was $12.7 million versus $5.7 million in the third quarter last year. Adjusted EBITDA is not a measure recognized under GAAP. Please refer to the financial table in our release, which reconciles this non-GAAP measure to net loss.

Moving to a review of select balance sheet items and other data, we entered the period with inventory, including in-transit, down 4.9% to prior-year levels, despite fewer markdowns than last year. We are pleased that our inventory is clean, with another quarter of reduced aging; and as previously stated, we remain on track to end the year with inventory down 4% to 5%.

As previously announced, on November 29, 2016, the Company will repay the outstanding principal amount of $57 million of its 10 5/8% second lien senior secured notes due in 2017. The redemption meets our objective of reducing short-term debt and improving our capital structure. The notes will be repaid well in advance of the July 2017 maturity date at a redemption price of 100% the principal amount plus accrued and unpaid interest.

Total debt decreased 1.8% over prior year due to working capital reductions and changes in our capital structure. At period-end, debt consisted of our senior notes due 2017 in the amount of $57 million; senior notes due 2021 in the amount of $350 million; our asset base line revolver, $572.1 million; and capital lease and financing obligations of $101.3 million.

As of October 29, 2016 the Company had approximately $303 million of borrowing capacity under its revolving credit facility. We are still on track to achieve our previously stated $21 million, $24 million net SG&A and cost of goods savings. And we expect to decrease debt by approximately $5 million to $10 million by the end of the year.

Year-to-date capital expenditures, excluding external contributions, were approximately $44 million and net of external contributions were approximately $23 million. Our CapEx spending focuses primarily on projects that build infrastructure for growth, such as omnichannel operations; customer-facing store upgrades, including fixtures, visuals and remodels; and information systems.

Turning now to our fiscal full-year 2016 guidance, as result of unseasonably warm weather and prevailing soft mall traffic trends, we believe it is prudent to revise our guidance for the year. We are now forecasting loss per diluted share in the range of $2.04 to $2.54 and adjusted EBITDA to be in the range of $114 million to $124 million.

Assumptions reflected in the Company's revised full-year guidance include the following: a comparable sales decrease ranging from 2.5% to 3.5%; gross margin rate ranging from an 80 to 90 basis point increase over the fiscal 2015 rate of 34.7%; SG&A between $885 million and $888 million, or an expense rate ranging from 50 basis point to 70 basis point increase from the fiscal 2015 rate of 33.3%.

CapEx will not exceed $40 million net of external contributions, and an estimated 20 million weighted average shares outstanding. As a general note, our Form 10-Q for the third quarter 2016 will be available by December 8, 2016.

With that, we will open the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions] And first from Goldman Sachs we’ll hear from Kristen McDuffy.

Kristen McDuffy

Good morning. Thanks for taking my questions. In terms of your gross margin, I was wondering if you could give us a little more insight into how the merchandise margin improved in terms of what drove it. And then you noted improved delivery costs at the same time as you experienced double-digit growth in omnichannel. Is that all related to the FedEx renegotiation? Thanks.

Kathy Bufano

Thanks, Kristen; good to hear from you. We have been reducing inventory. We ended the quarter down 4.9%, and that was pretty consistent throughout the quarter. We had less markdowns, quite frankly – a big reduction in gross markdowns. And that's really what drove the profitability.

In delivery expense, not only do we have the new FedEx contract, but we have the efficiency of West Jefferson. A year ago we had just launched West Jefferson end of September and early October, so we had the normal startup pressures. So we're finally getting to a point of efficiency in West Jefferson. So those were the two big components.

Nancy Walsh

And just to add a little bit to that, we did see strong improvement in the RSL margin. And in addition to delivery expense, we're also seeing those efficiencies at the DC center itself. So both of those components, as we have been talking about throughout the year, contributed to that increase in the gross margin for this quarter.

Kristen McDuffy

Got it. And I'm sorry, what did you - you said RSL margin?

Nancy Walsh

Retail margin, sorry.

Kristen McDuffy

The what?

Kathy Bufano

The retailer merchandise margin.

Kristen McDuffy

Okay, got it. Thanks. And then just one follow-up. Your full-year same-store sales guidance suggests that same-store sales could be negative in 4Q, but less so than what we saw in the third quarter, but that your gross margin benefit is going to continue. How are you thinking about the weather and what to expect? Are you banking on more normalized winter weather? Thanks.

Kathy Bufano

No, not at all. Actually, we took out the sales guidance to where our original plans were, because we are anticipating the same warm trends.

Kristen McDuffy

Thank you.

Kathy Bufano

You’re welcome. Thanks Kristen.

Operator

Moving on we’ll hear from Carla Casella with JP Morgan.

Kathy Bufano

Good morning, Carla.

Carla Casella

Can you just talk about the - the guidance change - you may have answered this, but the guidance change was a little more dramatic than we would have thought. Was third-quarter below your plan as well, or was that really just a full impact of fourth quarter on - of the warm weather?

Kathy Bufano

Absolutely. Third quarter we had anticipated - last year, to give you a perspective, for the entire season we dropped $34 million in cold weather merchandise. And we thought that was a shocking number last winter. In third quarter this year alone we dropped $28 million off of what our plan and our forecast was. So looking at that trajectory, today we are going to have more record warmth this whole week, so that's where we really just – we took a haircut so that we can get a perspective, if this continues - and we are seeing that it is continuing - that we accurately reflect it.

Carla Casella

Okay, great. But in your margins, though, held in better than expected. Is it that you are holding that off till - for later in the season to potentially discount it? Or is it just that you need less clearance to move some of the merchandise?

Kathy Bufano

Last year we were very, very hamstrung coming into the holiday season in terms of carryover from spring in 2015. Our inventory control is absolutely paying off. Our inventory is less age and far cleaner going into the fourth quarter, less receipts. And we feel very strongly that we're going to be promotionally enough of where we need to be. Black Friday is loaded for bear, and the whole period of fourth quarter is just really getting back to much more historical margin rates than what we experienced last year. Third quarter was very depressed.

Carla Casella

Okay, great. Thank you.

Kathy Bufano

Thanks, Carla.

Operator

Our next question comes from Karru Martinson with Jefferies.

Karru Martinson

Last year, when you guys look at the unseasonably warm weather that was about, what, a $6 million impact on EBITDA?

Kathy Bufano

It would be more than that, because we dropped for the whole year. Yes, well, for the quarter, sure, yes; it was about a $6 million. It was 12, yes, exactly. Yes.

Karru Martinson

Okay. And when you look at the inventory that you have on hand, you guys have reduced the aged inventory, but how heavily are you weighted on cold weather goods going into the fourth quarter this year? Do you still feel that you are appropriately positioned for that warmer weather?

Kathy Bufano

You know, our cold weather - when it clicks, it clicks. We already have contingencies in place. We have already - you know, we thought we would have upside to cold weather, so we already have canceled scheduled backups that we usually bring in fourth quarter. And we’re already closely aligned with our vendors in terms of what our sell-throughs need to be and where we need to be in March. Last year we ended up not carrying over a significant amount of cold weather merchandise. And we feel on track, no matter how it ends up, that we are going to be clean with cold weather merchandise once we get to March.

Karru Martinson

Okay. And I realize that it is still early, but a number of other retailers have kind of cited an election fatigue, if you will. Have you seen a change in your consumer behavior or traffic patterns since the election concluded?

Kathy Bufano

No, we have not. I just received a truck – we are part of Shopper, ShopperTrak, and which is the national traffic, and the first two weeks of November, mall traffic was down 9%. That's a national number.

Karru Martinson

Thank you very much guys, appreciate it.

Kathy Bufano

Thank you.

Operator

Moving on from Citigroup we have Jenna Giannelli.

Kathy Bufano

Hi, Jenna.

Jenna Giannelli

Hi, there. Good morning. Just going on to the comp, you called out some of the areas of strength where you saw sales increases with furniture, dresses, denim, sportswear. It seems like a lot of these were apparel related. Can you talk a little more about what's driving the growth in those categories relative to the industry? And then does that suggest a more – a negative comp on some other categories, specifically cosmetics, jewelry, accessories, footwear? Any color would be appreciated.

Kathy Bufano

From the top, dresses were having – and I have read it from other people also, we are having a fantastic season in dresses, and it is really being driven by career dresses, go to work from Calvin Klein. And then, also, our localized assortments of special occasions in those markets that are very special occasion oriented. Active across the board has been fantastic. And we’re still experiencing the wonderful rollout of Under Armour. Denim is both in moderate and better denim and Levi in men's has been strong.

Actually, it started last December. We had a strong spring season in denim, which is an atypical time. So we are very, very well positioned in denim and think – know that that’s going to pay off for all the after-Christmas sales going on. Contemporary plus for us that I noted, we are in the rollout stages.

We have a strong contemporary regular-size business, and our plus-size customer is just eager and hungry for fashion. Men's big and tall – we're still in the rollout stage. We just launched men's big and tall; I noted that, last year. And in the Midwest, you can imagine, there is a lot of big and tall men. So, those categories are in the throes of being rolled out.

In terms of weakness, in shoes the weakness was absolutely driven by boot business. Boot business is down. And except for the launch of UGGs, which is a total plus in 60 doors, and we have had fantastic sell-through on that, that was very much impacted by the cold weather boot category. Cosmetics is slightly down. Not as difficult as the 4.9 comp, but still it’s a very, very big business for us, was slightly down.

And home and hard home – part of it is that hard home is not a margin-rich category by any means. And there is general softness from the Keurig coffee business, which had been on a run, has definitely showed signs of slowing. So that's pretty much the high points. You are right. There is other businesses, but when it dwarfs in comparison to $28 million of cold weather categories, it is bits and pieces of things that are out there.

Jenna Giannelli

Okay, that's really helpful. Thanks. And then on the margin side, when we think about the 170 bps that we had this quarter, how should we – first of all I guess how did that line up versus your expectation? How should we think about the cadence of that number going forward? And – because it seems like if we had even similar margin expansion in 4Q as we did in 3Q that puts us at the high end of your guidance. So is there any level of maybe conservatism in that number or just being cautious overall? Or maybe my math is wrong. But any color? Thank you.

Kathy Bufano

The 170 basis points expansion in third quarter was really the result of last year third quarter was historically very depressed, especially on the retail margin side. So we are getting back to historical levels. As I said before, less gross markdowns, significant improvement, less inventory plays out to improvement.

And West Jefferson – last year third quarter was we had just launched West Jefferson. And it was before we had the new FedEx contract. So we're pretty much – I think we got – wasn't it, Nancy, about 10, 20 basis points more than what we expected, but it wasn't that there was a windfall by any means from what our plans were.

Nancy Walsh

And the cadence going forward will be similar, but not exact, because there is the discounting that takes place throughout the end of the season. So we're still trending to where we are talking about an improvement from the guidance last time, because of the topics that Kathy spoke of.

Jenna Giannelli

Great, thanks. I will turn it over.

Nancy Walsh

Thanks, Jenna.

Operator

Our next question comes from Steven Ruggiero with R.W. Pressprich.

Steven Ruggiero

Thanks for taking them.

Kathy Bufano

Hi, Steve.

Steven Ruggiero

Hi. How are you Kathy?

Kathy Bufano

Hi, Steve. How are you?

Steven Ruggiero

Good. Two questions. Your proprietary card, credit card holders - was there any material difference between your same-store sales growth overall and that for your credit card holders?

Kathy Bufano

Yes. Our PLCC, if you're talking about year-over-year, the penetration grew to 57%. The PLCC customer was down slightly. Other forms of payment were down double-digits. That is why that we are excited about our new launch of pay anyway you want, pay your way our LoveStyle Rewards program.

Steven Ruggiero

Okay. And then as we look at your contribution overhead by your stores, take your revised budget for the full year - what percentage or what number of your stores are going to be making a positive contribution to corporate overhead?

Nancy Walsh

The majority of them. As we have talked about in the past, the majority of our stores are cash flow positive. We have a handful that are not, and we continue to evaluate those as their leases come up. But the majority of our stores are cash flow positive.

Kathy Bufano

Yes, 16 that are negative, right?

Nancy Walsh

The end of this year.

Kathy Bufano

Yes, the end of the year.

Steven Ruggiero

Got it, okay. That's helpful. 16. And then just a couple of details. You had $2.4 million and $2.1 million in consulting and severance costs in the second and third quarter. Don't think there was anything in the first quarter, but I might be mistaken. Do you have any expected consulting and severance costs in the fourth quarter? And I assume that those are not added back in your $114 million to $124 million of adjusted EBITDA?

Nancy Walsh

We have no planned severance or consulting fees for fourth quarter. As we talked about last quarter, this is the bulk of the consulting fees related to the cost savings initiative. And the severance this quarter was a very small portion of that, because of a store closing. So none of that is planned for Q4.

Steven Ruggiero

Okay. And those are not added back, once again, to your EBITDA, as you stated in your press release?

Nancy Walsh

Correct.

Steven Ruggiero

And then I could go on, but just one last question, if you can indulge me and that is: your interest expense jumped in the quarter to $18 million compared to roughly $15 million in the first and second quarter. Are there costs associated with the new $150 million term ABL in the third quarter that is increasing that? Or is it just related to the interest rates paid?

Nancy Walsh

There is some impact from the facility that we just completed in August. So of the $2.3 million, $1.6 million is interest expense. Most of that is rate for the third quarter. Very little of it is related to volume. And then there are some deferred fees in there as a result of the transaction.

Steven Ruggiero

So what would be the deferred fees that would be incremental on a year-over-year basis, Nancy?

Nancy Walsh

About $700,000.

Steven Ruggiero

Got it, okay. Thank you.

Nancy Walsh

So, $1.6 million was interest expense, and the balance of that $2.3 million increase for this quarter is deferred fees.

Steven Ruggiero

Understood.

Kathy Bufano

Thank you, Steve.

Nancy Walsh

Thank you.

Steven Ruggiero

Thank you.

End of Q&A

Operator

Ladies and gentlemen, that does conclude our question-and-answer session for today. I would like to turn the floor back to Kathy Bufano for any additional closing remarks.

Kathy Bufano

Thank you for joining our call today. We truly appreciate your support and interest in Bon-Ton. We hope you have a happy holiday season. Please go shopping and a great New Year. Thanks a lot.

Nancy Walsh

Thank you.

Operator

Ladies and gentlemen, that does conclude today's conference. Thank you for your participation. You may now disconnect.

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