Investors in technology and stores lifted Belk Inc.’s third-quarter sales while chipping away at its profits.
This story first appeared in the November 25, 2013 issue of WWD. Subscribe Today.
Net income for the Charlotte, N.C.-based department store chain dropped 67.6 percent to $3.6 million from $11.1 million in the 2012 quarter. Excluding asset impairment charges and gains on assets, profits were off 53.1 percent to $4.6 million.
Revenues rose 2.8 percent to $860.7 million, from $837.5 million, and were up 3.5 percent on a comparable basis, with same-store sales ahead 2 percent and a 44.8 percent increase in e-commerce accounting for the remainder of the comp growth. Gross margin ticked up to 31.5 percent of sales, from 31.4 percent a year ago.
Tim Belk, chairman and chief executive officer of the company, said the top-line improvement was “aided by colder weather and the investments we have made in the business, including store remodels, e-commerce and supply chain. November is the ‘go-live’ month for a new technology platform which includes replacement of much of our IT infrastructure and a new merchandising system.”
He added that new technology that will allow shipment of belk.com orders from stores is now being tested. “These investments will add expense and impact earnings over the next 18 months,” Belk said.
Belk, the largest privately held department store group in the U.S., singled out contemporary sportswear, shoes, accessories and men’s and children’s apparel as its strongest merchandise categories.
The company expanded or remodeled 16 of its 301 stores during the quarter.
For the year to date, net income was down 21.1 percent to $62.2 million, as revenues grew 3.9 percent to $2.72 billion.