Charlotte-based Belk Inc. said Monday that while its sales rose, profits fell 30 percent, as higher expenses from remodeling and e-commerce initiatives ate into the company’s increased revenue.
Sales were up 5.1 percent at Belk for the 13 weeks ending May 4, compared with the same time last year, rising to $956 million. The company said sales at stores open a year or more, considered a key measure of a retailer’s health, rose 5.2 percent.
But Belk said profits fell to $28.2 million, down from $40.3 million a year ago. Belk said in a news release that “higher expense associated with the company’s investments in strategic initiatives” drove profits lower. The company remodeled 24 stores during the quarter, and also continued to invest in e-commerce.
Belk said e-commerce sales were up 67 percent compared to the same quarter last year.
“While those investments will increase our expense in the short term, we expect them to generate strong future returns,” said chief executive officer Tim Belk, in a statement.
Belk also repurchased $102 million worth of shares at $50 a share. That represents almost a 25 percent increase from the price Belk paid during the same quarter last year, when it repurchased shares for $40.80. The company’s stock is largely privately held by Belk family members and employees, and doesn’t trade openly on an exchange.
Belk, which operates 301 department stores, is celebrating its 125th year in business since the first store was opened in Monroe.
Portillo: 704-358-5041 On Twitter @ESPortillo
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