Bon-Ton Stores Inc (NASDAQ:BONT)
Shares of Bon-Ton Stores Inc (NASDAQ:BONT) have spiked up over 80% in trading after the company announced that it has amended its $880 million credit facilities which should provide the retailer with immediate flexibility and additional liquidity. Observers believe the amended credit facility was a requirement for the company to be able to increase inventories in expectation of the Christmas sales season.
Nancy Walsh, Bon-Ton Stores Inc (NASDAQ:BONT)’s Executive Vice President and Chief Financial Officer, commented, “We are pleased with this amendment which immediately provides us with additional liquidity cushion and strengthens our financial flexibility through the holiday season. We appreciate the ongoing support of our bank group as our team continues to execute key operational and financial initiatives focused on positioning the business for both near- and long-term profitable growth.”
Sales have been on the decline for Bon-Ton Stores Inc (NASDAQ:BONT). While not dramatic, the decrease in sales has been steady. In 2013 the company reported $2.98 billion in sales. That sales performance was followed, yearly, by $2.83, $2.82, $2.79, and $2.67 billion for FY2017. The last five years have also seen per share losses for BONT shareholders. The last two years were the largest, (-$2.90) in 2016, and (-$3.18) for FY2017.
BONT Stock Review
The York, PA-based retailer announced the deal yesterday with less than an hour left in trading. Within 30 minutes BONT stock jumped from $0.33 to over $0.70. Then this morning the stock gapped up to open at $0.80 before hitting an inter-day high of $1.19. BONT stock volume is extraordinarily heavy. Over 37.8 million shares have traded hands on a stock that normally sees barely more than 500,000 shares traded daily.
Still, Bon-Ton Stores Inc (NASDAQ:BONT) shareholders have had a rough year as the shares have lost over 60% of their value prior to today’s price action. BONT stock still has further to travel if it is to challenge the existing 52-week high of $1.98 which was hit last November. The sudden spike has impacted the stock’s Relative Strength Index which is standing above 85 – a figure well inside the “overbought” area of the indicator.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.