Belk Inc. continued to expand its net income and sales in the second quarter, although at a slower pace than in the first three months of the year.
This story first appeared in the August 31, 2012 issue of WWD. Subscribe Today.
In the quarter ended July 28, the Charlotte, N.C.-based department store retailer’s net income expanded 9.6 percent to $27.4 million from $25 million. Sales were up 4.3 percent, to $867.9 million from $831.8 million, and grew 4.9 percent on a same-store basis. Cost of goods sold increased at the same rate as sales, leaving gross margin essentially unchanged at 33.3 percent of sales.
The company identified men’s wear, children’s and home as the merchandise categories with the highest rates of growth.
“This marked our 10th consecutive quarter of comparable-store sales growth,” said Tim Belk, chairman and chief executive officer. “The results are aided by investments in the business, including branding, store remodels, technology and a program on service excellence.”
He added that, in support of a rapidly growing e-commerce business, the company in June opened a 515,000-square-foot fulfillment center in Jonesville, S.C., representing a $4.5 million investment for the firm and the expected creation of 124 new jobs in the area.
Following a strong first-quarter performance, year-to-date sales and earnings grew faster than those for the most recent quarter. Net income for the six months rose 19 percent to $67.7 million from $56.9 million as revenues expanded 5.8 percent to $1.78 billion from $1.68 billion. Same-store sales were up 6.2 percent with gross margin at 33.5 percent of sales for both periods.
With 303 units in 16 Southeastern states, Belk is the largest privately held department store operator in the U.S. Its five-year investment budget for areas including store remodeling, service enhancements, marketing and e-commerce is about $600 million.