By  on August 28, 2009

Belk Inc. was able to drive down expenses faster than its customers brought down sales, helping the privately held department store group boost profits by 14.6 percent in the second quarter.

In the three months ended Aug. 1, net income rose to $9.4 million from $8.2 million in the year-ago quarter. Sales fell 8.3 percent, to $760.3 million from $829.3 million, and contracted 9.4 percent on a same-store basis.

However, the cost of goods sold, which includes occupancy costs, fell 9 percent, to $522.4 million, and selling, general and administrative expenses were down the same percentage, to $211.1 million.

The company cited “continued economic concerns” and the shift in state sales tax holidays in some of its markets in its explanation of the sales decline.

“While sales results reflected a continued weakness in consumer spending for the period, we were pleased to deliver increased profitability and a significantly improved cash position,” said Tim Belk, chairman and chief executive officer of the Charlotte, N.C.-based firm. “Our associates did an exceptional job of providing good customer service while managing expense and inventory levels in keeping with sales trends.”

In the half, net income was down 24.8 percent to $10 million from $13.3 million during the first half of 2008. Revenues were off 7.6 percent, to $1.52 billion from $1.65 billion, on an 8.5 percent same-store sales decrease.

With 307 stores in 16 Southeastern and Southern states, Belk is the largest privately held department stores company in the U.S. It reports financial results because of public debt.

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