Falling margins spawn red ink at Belk
November 30, 2007,
Charlotte, N.C. – Southern regional department store chain Belk saw last year’s third-quarter profit of $23.1 million swing to a net loss of $6.9 million this year, a result it allayed to a crunch in gross margins.
While overall sales grew 1.8% to $808.3 million in the most recent period, comp store sales fell 4.4%.
The year-to-date sales picture is much brighter, and the earnings view is at least in the black. Sales for the first nine months are up a healthy 13.8% to $2.59 billion, with a comp sales increase of 0.2%. Earnings for the period are $10.1 – or $15.7 million excluding non-comparable items – against last year’s $60.8 million through three quarters.
Belk, with a store count now of 303, is still working through its Parisian acquisition. On Sept. 12 it officially re-opened 25 Parisian stores (acquired from Saks Inc. in October 2006) under the Belk nameplate.
The company is investing about $108 million in renovations and expansions of the stores, most of which have added full line home departments.
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