CHARLOTTE, N.C.—Department-store retailer Belk reported a net loss of $4.2 million in its fiscal third quarter ending on Oct. 30, as opposed to net income of $400,000 for the third quarter of last year.
In a statement on the results, Tim Belk, chairman and chief executive officer, attributed the red bottom line to increased costs from the company’s investments in branding, information-technology infrastructure and merchandising. The increased expenses totaled $11 million, of which $10 million reflected costs for the rebranding and other corporate initiatives.
Belk debuted its rebranding and corporate-marketing initiative in October, which included a new logo and tag line, “Modern. Southern. Style.” The campaign includes an advertising effort involving television and print advertising, circulars, direct mail and social media throughout its market areas—all highlighting Belk’s new graphic elements and brand messages.
Net sales for the quarter totaled $746.6 million, up 2.6 percent from last year’s third quarter and including a 2.5 percent increase in same-store sales. Gross margin fell 88 basis points to 30.9 percent. Selling, general and administrative expenses rose 5.2 percent on a dollar basis and gained 77 basis points as a percentage of sales, to 30.4 percent.