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Belk Inc. fought off tough macroeconomic conditions and a decline in sales to score a gain in second-quarter profits, the company said Thursday.
This story first appeared in the August 29, 2008 issue of WWD. Subscribe Today.
For the quarter ended Aug. 2, the Charlotte, N.C.-based department store group posted a 9.3 percent climb in profits to $8.2 million from $7.5 million in the same period a year ago. Revenues for the second quarter dropped 5.7 percent to $829.3 million from $879.6 million last year.
“We have responded to the difficult economic environment by managing inventories and expense and continuing to give customers compelling reasons to shop with us,” said Tim Belk, chairman and chief executive officer. “While sales results were disappointing, we were pleased to deliver a profit improvement through the hard work and efforts of our associates throughout the company.”
The retailer attributed the second-quarter gain to lower expenses and an improvement in gross margins as a percentage of sales.
Results for the first half were less robust. In the first six months, Belk’s profits dropped 21.8 percent to $13.3 million from $17 million last year. Sales for the same six months fell 7.7 percent to $1.6 billion from $1.8 billion a year ago.
Belk is the nation’s largest privately held department store company, operating 307 stores in 16 Southern states. It reports quarterly financial data because of public debt.
The company is hoping to boost sales in the third quarter with a pair of celebrity exclusives. Actress Kristin Davis of “Sex in the City” will lend her name to a line launching at 125 Belk stores this fall, and pro golfer D.J. Trahan has signed on to endorse the company’s Pro Tour private label golf sportswear line.