Belk Inc.’s sales last year were in the plus column, though big investments in technology and lower margins pushed net income down 15.9 percent.
This story first appeared in the April 10, 2014 issue of WWD. Subscribe Today.
On Wednesday, the Charlotte, N.C.- based regional department store chain reported that net income for the fiscal year ended Feb. 1 totaled $158.5 million, compared to $188.4 million in the prior year.
Net sales for the 52 weeks rose 2.1 percent to $4.04 billion, versus net sales of $3.96 billion in the prior year. On a comparable-store basis, net sales rose 2.9 percent.
“Despite significant headwinds during the latter part of the year, we are pleased to report our fourth consecutive year of positive comparable-store sales,” said Tim Belk, chairman and chief executive officer of Belk Inc. “Compared to recent years, fiscal 2014 was a challenging year with a shorter holiday selling season, and our earnings were impacted by additional expense associated with key strategic initiatives, such as expanded omnichannel and e-commerce capabilities. We spent time last year testing ways to drive incremental sales through item locator and store fulfillment of digital orders, and we plan to expand those efforts this year.”
Belk cited activewear; women’s contemporary, resort and bridge fashions; women’s suits; men’s better sportswear and clothing, and kids’ apparel and shoes as the best-performing categories.
Online sales increased 42.5 percent, positively affecting comparable-store sales by 1.5 percent for the period.
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Belk cited several investments impacting the bottom line, among them the launch of a new information technology platform with a new merchandising system and the replacement of much of the company’s previous IT infrastructure. Net income excluding non-comparable items totaled $161 million compared to $185.5 million in the prior year.
In other news, Belk plans to repurchase up to nearly 2.1 million shares of its common stock at a price of $48.10 a share. The company expects to launch the repurchase offer on or about April 24.
As reported, Belk plans to invest more than $700 million over three years on omnichannel initiatives; flagship development; expanding and remodeling existing stores; supply chain initiatives, and enhancing key merchandise departments such as shoes.