NEW YORK — Belk Inc. converted a fractional sales gain into bottom-line growth in fiscal 2003.

For the 12 months ended Feb. 1, the nation’s largest privately held department store company said net income swelled 32.5 percent to $84 million, or $1.53 a share. That compares with last year’s earnings of $63.4 million, or $1.16. Excluding special items in both years, net income would have been $95 million versus $71.4 million last year.

Net revenues at the Charlotte, N.C.-based firm rose 0.3 percent to $2.242 billion from $2.236 billion a year ago. Same-store sales fell 3.2 percent. Belk said the sales gain was driven mostly by new, expanded and renovated stores.

The higher profits were primarily the result of a 153 basis point decline in cost of goods sold.

"We established a new merchandising, marketing and planning-allocation organization, continued our expansion in new and existing markets and realized outstanding improvements in expense management and gross margin," said chief executive officer John Belk in a statement.

Belk also called the company’s merchandising and marketing consolidation completed last August "an important strategic move for Belk that will enable us to serve our customers better, improve efficiency, increase our capacity for expansion and produce better operating results over the long term."

In fiscal 2004, Belk plans to enter eight new markets, adding a total of 518,000 square feet of combined store space.

Belk operates 214 stores in 13 Southeastern and Mid-Atlantic states. Despite its private status, Belk has public debt and has made its earnings and sales results public since 1998.

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