BELK CONTINUING PROFITS UP 12.7% IN 1ST QUARTER
Byline: Thomas J. Ryan
NEW YORK — Belk Inc., the nation’s largest privately held department store chain, reported earnings from continuing operations climbed 12.7 percent in the first quarter ended May 2, to $9.4 million from $8.4 million.
This was the first quarterly report of the Charlotte, N.C., chain since it completed its reorganization, which merged all 112 separately operated Belk companies into a single entity. The reorganization was completed in April.
The move was part of a bid to be more competitive with other large department store chains. Last year, Belk’s sales were $1.97 billion.
Sales in the quarter inched up 0.3 percent to $450.3 million from $448.8 million, according to a filing with the Securities and Exchange Commission.
Belk said a 1.6 percent same-store gain offset a decrease of 11 stores over the prior 12 months. Belk operates 228 stores in the Southeast.
Belk’s profits were boosted by an improvement in gross margins to 32.3 percent of sales from 31.9 percent, as increased buying efficiencies and additional vendor allowances offset higher markdowns.
Belk’s net earnings were $8.4 million against $8.36 million. The latest year included a $670,000 charge from the early repayment of a loan, while the year-ago period included a $320,000 charge on a loss from its outlet stores, which have been discontinued.
Belk said it opened three new stores in the quarter, in Canton, Ga., a new market for the chain; in Smithfield, N.C., where a replacement unit was opened, and in Cayce, S.C. It also completed an expansion and renovation of the Forest City, N.C., store and renovations in the Wilmington and Winston-Salem, N.C., stores.
The company said it plans to open five more stores, complete significant renovations and/or expansions of five existing stores and update its point-of-sale register systems during the current year, resulting in capital expenditures this year of approximately $100 million.