Belk Inc. kept increases in expenses below its rate of increased revenue, allowing the retailer to convert a year-ago loss into a third-quarter profit.
This story first appeared in the November 23, 2011 issue of WWD. Subscribe Today.
In the three months ended Oct. 29, the Charlotte, N.C.-based department store group registered net income of $600,000 versus a year-ago net loss of $4.2 million. Excluding gains on property and equipment sales in both periods and asset impairment and exit costs in the most recent quarter, net income was $1.4 million versus a loss of $6.1 million a year ago.
Sales rose 5.9 percent, to $790.7 million from $746.6 million, and were up 6.6 percent on a same-store basis.
Gross margin ticked up to 31 percent of sales from 30.9 percent in the 2010 quarter. The combination of its cost of goods sold and selling, general and administrative expenses rose 4.5 percent to $776.6 million.
“We are encouraged by our strong results and momentum as we enter the fourth quarter,” said Tim Belk, chairman and chief executive officer. “We see this as a good time to continue investing in our business, including technology to add new capabilities, store remodels and expansions and building our new brand.”
The company, the largest privately held department store group in the U.S., with 303 stores in 16 southern states, identified men’s apparel, women’s shoes, cosmetics and hard home merchandise as top performers during the quarter. It completed shoe department expansion and remodeling projects in 32 stores and fashion jewelry remodeling initiatives in 56 units.
In the nine months, net income increased 76.4 percent to $57.5 million from $32.6 million, while revenues were up 5.7 percent to $2.47 billion.