Belk Inc. managed to keep increases in expenses below the pace of its sales gain in the first quarter, paving the way for a 31.3 percent boost in profits.
This story first appeared in the May 26, 2011 issue of WWD. Subscribe Today.
In the 13 weeks ended April 30, the Charlotte, N.C.-based department store operator generated net income of $31.9 million versus year-ago net income of $24.3 million.
While sales were up 5.6 percent to $848.6 million from $803.9 million a year ago, its cost of goods sold rose a more modest 4.8 percent, to $562.4 million, and its selling, general and administrative costs expanded 5.3 percent, to $229.6 million. Same-store sales rose 5.7 percent and the company said it experienced a “significant” but unspecified increase in e-commerce sales.
The company cited strength in shoes, children’s and home.
Tim Belk, chairman and chief executive officer, said the company was pleased with the results of recent investments in “branding and marketing, e-commerce, departmental remodels and information technology. As we approach fall, we remain cautious and continue to monitor the consumer impacts of higher apparel prices, especially when combined with higher prices for food and gasoline.”
Belk, the nation’s largest privately held department store group, has adopted the tag line “Modern. Southern. Style.” in its marketing. The company operates 304 stores in 16 states in the South.