Tim Belk, chairman and chief executive officer of Belk, Inc., said, “Our sales growth for the quarter remained strong as we continue to benefit from the investments we are making in the business.
The bottom line was impacted by lower margins resulting from increased promotions as well the expense associated with the investments. While those investments will increase our expense in the short term, we expect them to generate strong future returns.”
Net sales for the 13-week period ended increased 5.1 percent to $956 million compared to the prior-year period. The increase was primarily the result of increased promotions and investments in ongoing strategic merchandising, marketing, branding, eCommerce and service excellence initiatives. Comparable store sales grew for the 13th consecutive quarter, with a 5.2 percent increase.
Merchandise categories with the highest growth rate for the first quarter included ladies accessories, cosmetics, fine jewelry, men’s and kids. The company’s eCommerce sales grew 67 percent increase over the same prior-year period. Online sales positively affected comparable store sales by 1.6 percent for the period.
Net income for the first quarter decreased to $28.2 million, compared to $40.3 million for the same 13-week prior year period. The decrease was primarily driven by higher expense associated with the company’s investments in strategic initiatives, and a decrease in margin rate. Net income excluding non-comparable items was $28.4 million compared to $39.7 million for the same prior-year period.
Belk Celebrates 125th Anniversary
Belk is celebrating its 125th anniversary this year with numerous special promotions and events designed to express appreciation to customers, associates, vendors and other stakeholders for their contributions to the company’s success. Activities will include exclusive product offerings, celebrity appearances and community service projects across the company’s 16-state market area. For more information, visit belk.com/125 or belk.com/mediaroom.
New Stores, Store and Departmental Expansions and Remodels
Belk completed shoe and jewelry expansion and remodeling projects in 24 stores across 11 Southern states during the quarter. Other store improvement projects planned for the current fiscal year include the opening of a new store in New Braunfels, Texas, the opening of new stores in Morganton and Salisbury, N.C.to replace existing stores, and the completion of eight store expansions, nine store remodels, and expansions and remodels of watches and sunglasses departments in 25 stores.
The company previously announced 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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