Belk Hits Records for Q4, Year

NEW YORK – Belk Inc. set new records for profits and sales during fiscal 2006, but the pace of its profit growth slowed in the fourth quarter.

In the three months ended Feb. 3, the Charlotte, NC-based department store chain’s net income climbed 13.1% to $113 million from $99.9 million in the prior-year quarter.

Sales accelerated 28.2% to $1.41 billion from $1.1 billion in 2005.

Belk reported full-year results, so fourth-quarter figures were obtained by subtracting figures for the first nine months of the fiscal year from those for the year. Comparable-store sales results for the quarter weren’t provided.

For the full year, net income grew 32.8% to $181.8 million from $136.9 million in 2005. Eliminating the effect of non-recurring items, most of them in 2005, net income was up 25.4%. By either measure, profit growth slowed in comparison to the 85.9% increase in net income registered during the first nine months of the year.

Sales rose 24.1% to $3.68 billion from $2.97 billion and, eliminating the effect of an extra week last year, were up 4.5% on a same-store basis.

“Last year was an exceptional year for Belk, highlighted by record sales and profit results, two key acquisitions and new store openings,” said Tim Belk, chairman and chief executive officer of the firm. “The performance of our legacy Belk stores drove overall results. Total sales were boosted by significant additions to our store base through the Parisian acquisition.

“As we move forward this year, our focus will be on continuing the integration of the acquired stores and strengthening the Belk brand,” he observed.

Belk said the company intends “to bring together best practices from both Parisian and Belk to enhance and improve the customer experience in all our stores.”

Belk’s board authorized the repurchase of 1.6 million shares of common stock at a price of $31.00 a share. Additionally, directors increased the annual dividend by 14% to $0.40 a share for stockholders of record April 4.

Belk currently operates 309 department stores in 17 states, primarily in the Southeast. Of these, 279 bear the Belk nameplate and 30 carry the name Parisian. The conversion to the Belk name is expected to be completed by the end of the third quarter.

Belk is privately held but releases financial results because of public debt.