NEW YORK – Belk Inc.’s first quarter profits fell by half despite increases in net and same-store sales.
Net income in the period ended May 5 was $9.5 million versus $19.5 million in the year-ago quarter. Excluding special items, including $5.4 million in impairment and store closing costs in the 2007 period, net income fell less dramatically, to $14.4 million from $19.2 million.
Sales increased 20.2% to $904.5 million from $752.5 million in the year-ago quarter. Comparable-store sales rose 2.7%.
In addition to impairment costs, the company attributed the earnings dip to higher interest expense related to its acquisitions of the Parisian department stores and Migerobe fine jewelry businesses.
“Although first quarter sales were negatively affected by the shift of Easter business into March and cooler weather, sales from new stores and our new fine jewelry business helped produce gains in both total and comparable-store sales for the period,” said Tim Belk, chairman and chief executive officer.
“The Parisian stores will be re-branded as Belk this fall, and we expect it will take approximately 18 months to complete the transition and begin realizing the synergies and benefits of the acquisitions,” he continued.
Belk, based in Charlotte, NC, identified men’s, women’s and children’s apparel and footwear as the top performing merchandise categories during the quarter.
After opening four units during the first quarter, Belk, the largest privately held department store in the US, operates 280 Belk stores and 30 Parisian stores in 17 states. It expects to open seven stores this fall and expand 12 others.