Belk investments shrank profit in 3Q
November 25, 2013,
Charlotte, N.C. - Store remodels and expansions in 10 states along with spending on ecommerce and supply chain improvements took a bite out of Belk Inc.'s net income during the third quarter, although sales and comps both made gains.
Net income for the quarter ended Nov. 2 fell to $3.6 million compared to $11.1 million during the year-ago period. When non-comparable items are taken into account, net income narrowed to $4.6 million compared to $9.8 million in last year's 3Q.
Sales rose 2.8% to $860.7 million, with a bit boost coming from the 45% jump in ecommerce sales. Same-store sales were up 3.5%, the company's 15th consecutive quarter of positive comp growth. Home was not among the category leaders during the period.
"November is the ‘go live' month for a new technology platform which includes replacement of much of our IT infrastructure and a new merchandising system," said Tim Belk, chairman and ceo. "In addition, we are testing technology to fulfill belk.com orders from stores to support our digital business, which grew 45% in the quarter. These investments will add expense and impact earnings over the next 18 months."
On the bricks-and-mortar side of the business, Belk in mid-October completed grand openings for a new store in New Braunfels, Texas, and for new relocated stores in Salisbury and Morganton, N.C. The company also wrapped up store expansions and remodelings in Flowood, Miss., Rock Hill, S.C., Morehead City, N.C., Paragould, Ark., Tifton, Ga., Stuttgart, Ark., Brunswick, Ga., and Mount Pleasant, S.C. Stores completing remodelings included Fredericksburg, Va., Gainesville, Fla., Monroe, La., Bainbridge, Ga., Danville, Va., Elizabeth City, N.C., Griffin, Ga., and Natchez, Miss.
Belk will open two new flagship stores next year at Dallas Galleria and Bridge Street Town Center in Huntsville, Ala. Stores in Friendly Center in Greensboro, N.C. and Belk of Mount Pleasant Town Centre in Mt. Pleasant, S.C., are also being expanded and remodeled to become flagship stores. The current flagship store at Riverchase Galleria in Hoover, Ala. is also slated for a major remodel.
Year-to-date, net income dropped 21$ to $62.2 million. Sales increased 3.9% to $2.72 billion, with ecommerce sales up 52.8%. Same-store sales rose 4.0%.