Falling Margins Spawn Red Ink at Belk
December 17, 2007,
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, comps fell 4.4%.
The year-to-date sales picture is brighter, and the earnings view is in the black. Nine-month sales 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 303 stores, is digesting 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 $108 million in renovations of the stores; most have added full-line home departments.