Charlotte-based Belk Inc. reported increases in first-quarter sales and profit that were bolstered in part by its fast-growing online shopping sector.
For the three months that ended May 2, the retailer reported earnings of $21.8 million, representing a rise of about 13 percent from the first quarter of 2014.
First-quarter sales were $985 million, a 3.1 increase from the first quarter of 2014. In stores open at least one year, net sales rose 3.3 percent.
Online sales were once again Belk’s fastest growing category, rising 36.7 percent for the quarter compared with a year prior. Online sales, the company said, positively affected its comparable store sales by 2.1 percent for the period.
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“Although the expenses related to our investments continue to impact earnings, we are beginning to see the benefits from those investments in top line growth and higher margins,” Tim Belk, CEO of Belk, said in a statement released Wednesday.
Some of those investments included two new store openings in March – one in Jacksonville, Fla., and one in Bristol, Tenn. Belk also opened a new men’s and kids’ store as part of a store remodeling in Franklin, Tenn. The company also completed the remodel and expansion of a store in Columbia, S.C., in early April.
The company said it has invested over $600 million in “key strategic initiatives” over the last three years that include store openings and remodels, along with building its “omnichannel” shopping initiative and investing in its supply chain, customer service and IT.
Belk, the largest family-owned and operated department store, said last month it is considering a sale and has hired Goldman Sachs to assist in the process.
While the company’s sales have risen over the years, expenses have risen faster, resulting in thinner margins. Analysts say the company faces a challenging retail environment as the department store industry consolidates and as more consumers shop online.
Belk’s online sales have been growing rapidly, though they still represent a relatively small portion of its overall revenue. In the last fiscal year, for example, online sales made up 6.7 percent of the company’s total revenue.
Belk operates 297 department stores in 16 Southern states. The company employs about 1,300 people in its headquarters, and its stock is privately held, mostly by the Belk family.