Profitability Blooms at Belk
A String of Acquisitions Drives up Sales and Profits
By Staff -- Home Textiles Today, 4/23/2007 12:00:00 AM
Charlotte, N.C. —
Buoyed by a string of acquisitions, Belk Inc. drove up sales and profits for the fiscal year ended Feb. 3 by double digits.
Consolidated sales reached $3.685 billion, up 24% from $2.969 billion in the previous fiscal year, which included one less week than the most recent fiscal period. Comps rose 4.5%. Home was not among the departments Belk cited as its top performing merchandise areas for the year.
Net income at the 309-unit Southeastern department store operator shot up to a record $182 million — a 32.8% gain over the previous year's $137 million, boosted by better comps and higher gross margins.
Net income excluding non-comparable items for the year rose 25.4% to $174 million.
"The performance of our legacy Belk stores drove overall results," chairman and ceo Tim Belk said in a statement. "As we move forward this year, our focus will be on continuing the integration of the acquired stores and strengthening the Belk brand."
In July 2005, Belk acquired 22 Proffitt's and 25 McRae's units from Saks Inc. In July 2006, it followed with the acquisition of Migerobe Inc., a company that leased fine jewelry departments in 35 of the company's 315 stores. Last October, Belk purchased 38 Parisian stores, again from Saks Inc. Belk has since sold four Parisian units to The Bon-Ton Stores and plans to divest another seven. The remaining Parisians will be re-branded as Belk in the third quarter.
In the new fiscal year, Belk plans to open 12 new stores, undertake major renovations at three, and expand and renovate 11 units. However, after the sale of seven more Parisian doors, total selling space will shrink by 3.2%, or 800,000 square feet.
|Qtr. 2/3 (x000,000)a||2007||2006||% change|
|a. In the year-ago periods, the fourth quarter and fiscal year closed on Jan. 28.
N/A = Not available
|Oper. income (EBIT)||N/A||N/A||—|
|Average gross margin||N/A||N/A||—|
|Oper. income (EBIT)||323.7||258.5||25.2|
|Average gross margin||33.5%||33.4%||—|
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