Bon-Ton Stores Inc (NASDAQ:BONT) Has Potential

The Bon-Ton Stores Inc. (NASDAQ:BONT) has been on a charge within the last few days.Within three days, the stock tripled from $0.33 to $0.97 after the release of its third quarter results and rumors that it would commence trading on the OTCQX best market.In this piece, we will provide you with all the information you need on Bon Ton at first glance.Take a look a look at the price action below: BONT Daily ChartIn its bid to keep improving results, the company introduced the world-famous toy brand FAO Schwarz in 186 of its department stores and on the company's ecommerce website.The FAO Schwarz, which is known for its unique whimsical toys, cuddly plush stuffed animals and fun imaginative games, was made available across the Bon-Ton stores at select locations including Boston Store, Bergner's, Carson's, Elder-Beerman, Herberger's and Younkers stores.The full assortment of FAO Schwarz-branded merchandise will be offered online bringing accessibility to a wide range of customers.Brief HistoryLet’s give you a brief overview of who Bon Ton Stores Inc is.The company was founded in 1898 with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin. It is one of the largest regional department store operators in the United States, offering a broad assortment of brand-name fashion apparel and accessories for women, men and children.The merchandise offerings also include cosmetics, home furnishings and other goods. Bon Ton currently operates 262 stores in 25 states in the USA.The company continues to evolve in response to competitive retail companies—mass merchandisers, national chain retailers, specialty retailers and online retailers—and the expansion of mobile technology and social media.As a major participant in the retail industry, it is affected by the numerous business and economic factors affecting the industry, including the department store sector such as underemployment and the low labor participation rate, fluctuating consumer confidence, consumer buying habits and slow growth in the economy.Recent DevelopmentsThe Bon-Ton Stores, Inc reported in early November that the shares of its common stock would begin to trade on the OTCQX Best Market starting, November 9. Bon-Ton will continue to trade under the symbol BONT.With this announcement, Bon-Ton joins many other established public companies who use the OTCQX market, a recognized public market that offers efficient and transparent trading for U.S. and global companies.The Company will also continue its regular quarterly earnings press releases and conference calls in conjunction with filing quarterly and annual reports on Forms 10-Q and 10-K, respectively. Bon-Ton will also continue to file current reports on Form 8-K.Earlier in February 2014, it announced that it has amended its $880 million ABL Tranche A and Tranche A-1 credit facility, providing the company with immediate flexibility and substantial additional liquidity under its current credit facility.Nancy Walsh, Bon-Ton’s Executive Vice President and Chief Financial Officer, commented that management was very pleased with the amendments as it provided the firm with additional liquidity and enables the firm enough financial flexibility to explore other lucrative options.William Tracy, President and Chief Executive Officer, commented:

“As we build our inventory position heading into the holiday season, we are pleased to have increased access to capital. We look forward to continuing to work closely with our vendor partners to ensure we are delivering quality merchandise and an exceptional shopping experience for our customers in our stores and online.”Source

The amendment was made subject to certain terms and condition and it retained AlixPartners LLP and PJT Partners Inc. to provide operational and financial advisory services.Financial PerformanceSales have been on a slow decline over the last five years, with a reduction from $2.79 billion in 2016 to $2.67 billion in 2017. Considering the economic challenges, the fierce competition and the general landscape of the industry, it is safe to estimate that the firm has been performing well. Management was also able to stabilize cost of sales with its value reducing from $1.87 billion to $1.7 billion in the previous year.Bon Ton has also managed to control its level of debt, with the value falling from $0.4 billion to $0.37 billion over the past three years.However, its management need to input stricter cost control on its general & admin expenses and cost of sales to stem the consecutive losses recorded with the last three years. Quarterly results show that the firm is in line to make another loss and this can only reduce investor confidence levels.ConclusionConsidering the high amount of sales recorded year on year, it is safe to say that it has potential; however, management must control its costs and search for cheaper means to finance its processes. However, at current levels, BONT represents a good risk/reward opportunity for investors.We will be updating our subscribers as soon as we know more. For the latest updates on BONT, sign up below!Disclosure: We have no position in BONT and have not been compensated for this article.