Belk Sales up, Profit Squeezed in Q1

CHARLOTTE, N.C. - Family owned Belk department stores saw a tidy sales increase during the first quarter, but promotional activity contributed to lower year-over-year net income.
     Net income for the quarter ended May 4 tumbled 32% to $28.2 million. In addition to lower merchandise margins, the bottom line was impacted by high expenses associated with strategic investments.
     "While those investments will increase our expense in the short term, we expect them to generate strong future returns," said Tim Belk, chairman and ceo.
     Sales rose 5.1 percent to $956 million. Comps climbed 5.2%, the company's 13th consecutive quarter of same-store sales growth. Leading merchandise categories included ladies accessories, cosmetics, fine jewelry, men's and kids.
Ecommerce sales jumped 67% and positively affected comparable store sales by 1.6%.
     Belk plans to open new flagship stores in 2014 at the Galleria in Dallas, Texas, and Bridge Street Town Centre in Huntsville, Ala. It also plans to expand existing stores in Flowood, Miss., Greensboro, N.C. (Friendly Center), and Mt. Pleasant, S.C. and convert them to flagship stores over the next two years.

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