NEW YORK — Belk Inc., a regional chain in the South with a fresh eye for expansion, on Friday announced strong earnings and sales for 2004.
For the year ended Jan. 29, the company posted an 11.3 percent increase in net income to $124.1 million and an 8 percent increase in sales to $2.45 billion. This compares with net income of $111.5 million on sales of $2.25 billion in the prior year. The year’s sales gain was achieved through a 4.2 percent increase in comp sales plus $92.6 million in sales generated by new stores.
Belk doesn’t break out fourth-quarter income or sales, but based on the first three quarters, the quarter’s income came to $74.3 million versus $70.9 million the year before, and revenues rose to $820 million, from $761.6 million. Comp sales for the quarter rose 4.1 percent.
The gains will help fuel the chain’s expansion objectives, which include seeking to purchase department stores from Saks Inc., possibly the Proffitt’s and McRae’s divisions, sources have said. Both Saks and Belk declined to comment on the reports. The pursuit of Saks represents a shift in strategy for Belk, which has been timid about expansion in the past. For example, last year, Belk bought four Proffitt’s stores from Saks. In the late Nineties, Belk swapped about six stores with Dillard’s to enter the Jacksonville, Fla., and Columbia, S.C., markets.
Commenting on the latest results, Tim Belk, chairman and chief executive officer, said in a statement: “Last year was another record-breaking year made possible by the outstanding performance and contributions of dedicated associates from throughout the company. Examples of successful corporate initiatives that helped drive our strong results included new store openings, expansions and renovations, expansion of the home, cosmetics and private brands businesses and continued implementation of expense management and profitability improvement strategies.”
Net income excluding noncomparable items increased $21.7 million, or 21 percent, to $124.9 million.
For the year, Belk generated $230.1 million of cash flow from operations, and cash-on-hand totaled $232.3 million. There were zero borrowings outstanding under the $330 million revolving credit facility, and total debt was $301.4 million, versus $308.5 million the year before.
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Last year, Belk opened 14 stores, adding 964,300 square feet, and completed renovations on eight and expansions on three. Belk increased offerings of national cosmetics brands, including Clinique, Estée Lauder and Lancôme; men’s better sportswear, including Polo; proprietary brand apparel, particularly Kim Rodgers in women’s sportswear, and home furnishings.
Belk expects to open 12 stores in fiscal 2006.