Belk reported Friday that its fourth-quarter earnings rose thanks to strong holiday sales, but full-year profits dropped as the Charlotte-based company spent more to renovate existing stores and to open new ones.
For the fourth quarter, ended Jan. 31, Belk’s profits totaled $104.4 million, an 8.4 percent rise over the prior year. Income was up, the company said, thanks in part to a 5.2 percent increase in holiday sales for the nine week shopping period that ended Jan. 3, 2015.
The department store company posted profits of $146.1 million for last fiscal year, representing a 7.8 percent drop from the year before. In a statement released Thursday, Belk said the decrease was driven by increased spending on strategic initiatives such as remodeling stores and expanding e-commerce.
Those initiatives included more than $79 million in store expansion and remodeling projects in 2014, including the opening of new stores in Dallas, Huntsville, Ala., and Denham Springs, La., as well as store expansion and remodeling projects in Greensboro, Mount Pleasant, S.C., and Hoover, Ala.
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Belk also said it spent about $33 million on expanding its e-commerce fulfillment center in Jonesville, S.C., which opened in 2012.
“Despite challenges early in the year, we ended (fiscal year) 15 with strong holiday sales and are pleased to report our fifth consecutive year of positive comparable store sales,” said Tim Belk, the department store chain’s chairman and CEO. “We are encouraged by the recent trends and believe we are well positioned for the year ahead.”
Belk’s fourth-quarter sales totaled $1.4 billion, a 5 percent rise over the same period a year prior. Comparable store sales, which refers to sales at those stores open at least a year, rose 4.8 percent. Online sales increased 42.2 percent for the fourth quarter, the company said.
For the year, sales totaled $4.1 billion, an increase of 1.8 percent over the prior year. Comparable store sales rose 1.5 percent for the year, and online sales grew 43.3 percent.
Belk said over the coming year, it will open new stores in Bristol, Tenn., and Jacksonville, Fla., as well as expand and remodel stores in Columbia, S.C., and Franklin, Tenn. The company will also spend an additional $27.5 million to expand its Jonesville fulfillment center and will add about 50 new jobs there by the end of 2016, in addition to the 170 jobs it announced last year.
The company said in February it will close its Pineville distribution and fulfillment center in September, laying off 111 workers, as it focuses on expansion of the Jonesville center.
Belk operates 300 stores in 16 Southern states. The company’s stock is privately held, largely still by the Belk family.