Charolette, North Carolina-based department store Belk reported flat sales and profit loss due to rising expenses for its fiscal first quarter ended May 3. According to company chairman and CEO Tim Belk, the expense costs, which are expected to total $700 million over a three-year period that began this quarter, will continue to impact the company’s short term profitability, however, “we are building a solid foundation for long term growth and success.”
Net income fell nearly 32% to $19.3 million for the quarter due to investments in strategic initiatives, such as its omnichannel initiative to design a shopping experience that meets customers’ needs, regardless of whether they shop online or in stores, enhance the in-store experience and create personalized interactions and excelling in customer service.
Net sales for the 13-week period were $955.1 million, a decrease of $0.7 million over last year. The company also reported a net sales decrease of 0.2% on a comparable store basis.
Online sales from belk.com increase 42.4% for the period and positively affected the company’s comparable store sales by 1.8%.
Belk also repurchased 1.96 million shares of its common stock for $94.3 million in a transaction completed on May 21. It contributed $100,000 to the American Red Cross to aid victims of the recent tornadoes and storms throughout the Southern US. The company plans to open new flagship stores and remodeling projects set for completion this fall in areas such as Greensboro, NC, Mt. Pleasant, SC, Dallas, TX, and two in Alabama. The company also recently announced a six-year sponsorship agreement with the SEC Network.