Mixed Bag for Belk
May 30, 2005,
Charlotte, N.C. —Helped by investment and miscellaneous income, and a strong performance in its home business, Southeastern department store retailer Belk Inc. recorded a 2.6 percent increase in first quarter profits, to $24.3 million from $24.1 million last year.
Sales at the privately held Belk, one of the last remaining family dynasties remaining in American retailing, rose 3.3 percent, to $568.1 million from $550.1 million last year. Same-store sales were relatively flat, edging up 0.4 percent. “Comparable store sales growth did not fully meet our expectations for the first quarter,” said Tim Belk, chairman and CEO.
Home was one of the stronger performers at Belk during the period, and Belk said, “We experienced solid sales in accessories, cosmetics and the home store, and our recently opened new stores are performing well.”
Putting pressure on the bottom line, average gross margin thinned 30 basis points, or three-tenths of a percentage point, to 33.7 percent from 34 percent a year ago. At the same time, costs edged up 40 basis points, or four-tenths of a percentage point, to 25.8 percent of sales from 25.4 percent a year ago.
But offsetting weaker margins and rising costs, and generating the increase in first quarter profits, Belk recorded a $200,000 gain on property, equipment and investments, compared with a year-before loss of $200,000; and $100,000 in miscellaneous income.
|Qtr. 4/30 (x000)||2005||2004||% change|
|a. First quarter results include a $200,000 gain on property, equipment and investments, compared with a $200,000 loss in the same period a year ago; and $100,000 in miscellaneous income, compared with $300,000 last year.
b. Earnings per share are not provided by Belk Inc. because of the small number of shares outstanding at this privately held company.
|Oper. Income (EBIT)||45,100||47,300||-4.7|
|Per share||— b||— b||—|
|Average gross margin||33.7%||34.0%||—|