NEW YORK — Special items and one-time charges ate into Belk Inc.’s second-quarter profits, but sales gains allowed the company to report healthy earnings growth for the first half of fiscal 2002.
This story first appeared in the September 19, 2002 issue of WWD. Subscribe Today.
For the three months ended Aug. 3, the Charlotte, N.C.-based privately held department store company reported net income declined 48.6 percent to $3.8 million from $7.4 million a year ago.
One-time merchandising consolidation costs and restructuring charges from Belk’s reorganization completed Aug. 5 accrued to $11.8 million. Excluding those expenses year-over-year, as well as the aftertax effect of gains from property, equipment and investments, the company would have posted a 52.1 percent gain in net income to $10.8 million from $7.1 million last year.
Sales for the period increased 1.7 percent to $495.3 million from $486.9 million, as comparable-store sales fell 1.4 percent.
Although private, Belk has public debt and has made its earnings and sales results public since 1998, when it reorganized into a single operating company.
After consolidating the company’s merchandising and marketing functions into a single department located at its corporate headquarters in Charlotte, Belk said it expects to begin realizing cost savings in the third quarter of this year.
“This is an important strategic move for Belk that will enable us to serve customers better, improve efficiency, increase our capacity for expansion and produce better operating results over the long term,” said chief executive officer John Belk in a statement.
Overall, for the first six months of the fiscal year, Belk reported net income more than doubled, growing 131.9 percent to $21.1 million from $9.1 million a year ago. Sales surpassed $1 billion, rising 2.7 percent to $1.03 billion from $999.4 million last year, but same-store declined 0.2 percent for the 26 weeks.
Excluding the aforesaid items and charges year-over-year, Belk would have posted a 197.9 percent surge in earnings to $28.3 million from $9.5 million in the year-ago period.