Belk FY Net Falls 15.9 Percent
CHARLOTTE, N.C.-Reduced margins and increased expenses trumped a slight gain in sales to slash Belk's fiscal-year net income by 15.9 percent, to $158.5 million.
Gross margin for the year, which ended on Feb. 1, fell 81 basis points to 32.6 percent. Selling, general and administrative expenses rose 3.9 percent in dollars and 44 basis points as a percentage of sales, to 25.3 percent. A Belk statement detailing its financial results said expenses rose due to the retailer's investments in strategic initiatives such as the launch of a new information technology platform, which included a new merchandising system and the replacement of its previous IT infrastructure.
Fiscal-year net sales increased 2.1 percent to $4 billion, which included a gain in same-store sales of 2.9 percent. Belk's online sales jumped 42.5 percent. Tim Belk, chairman and CEO, noted that this marked the fourth straight year of an increase in same-store sales, "despite significant headwinds during the latter part of the year," Belk said.
He added that the some of the costs related to the new IT platform went toward expanding Belk's omnichannel and e-commerce capabilities. "We spent time last year testing ways to drive incremental sales through item locator and store fulfillment of digital orders, and we plan to expand those efforts this year," Belk said.