Belk, Inc. Reports First Quarter Operating Results
Comp Stores Sales Increase 6.4%; Net Income Grows To $25.2M from $0.5M
May 26, 2010
CHARLOTTE, N.C., May 26, 2010 — Belk, Inc. today announced operating results for its fiscal first quarter ended May 1, 2010.
Net sales for the 13-week period increased 5.7 percent to $803.9 million compared to the same prior-year period. The increase was attributed to an increase in overall consumer spending during the period and enhanced merchandising and marketing programs. On a comparable store basis, sales increased 6.4 percent. Top performing merchandise areas for the period included women’s suits, dresses, shoes, accessories, men’s sportswear and clothing, and infants and toddlers.
Net income for the first quarter grew to $25.2 million from $0.5 million in the same prior-year period. The increase was due primarily to continued positive results from strategic initiatives focused on sales and margin performance. Net income excluding non-comparable items was $24.8 million compared to $0.6 million for the same prior-year period. A detailed reconciliation of net income to net income excluding non-comparable items is provided at the end of this release.
Tim Belk, chairman and chief executive officer of Belk, Inc., said, “We were pleased to deliver strong top-line and bottom-line results for the period. Customers responded very favorably to our spring fashion assortments and enhanced marketing efforts. Increased sales, combined with continued outstanding results from our inventory and margin improvement initiatives, produced excellent profit growth for the period.”
New and Renovated Stores
Belk opened one new store during the first quarter on March 10, 2010 in Port Orange, Fla. Three major store renovation projects are scheduled for completion this fall at the Belk stores in Hattiesburg, Miss., Chattanooga, Tenn. and Tuscaloosa, Ala.
Belk, Inc. Stock Self Tender Offer Results Announced
On April 1, 2010, Belk’s board of directors approved a self-tender offer to purchase up to 2,880,000 shares of common stock at a price of $26.00 per share. The tender offer was initiated on April 21, 2010, and on May 19, 2010 Belk accepted for purchase 1,977,541 shares of stock for $51,416,066 million.
About Belk, Inc.
Charlotte, N.C.-based Belk, Inc. (www.belk.com) is the nation’s largest privately owned mainline department store company with 306 Belk stores located in 16 Southern states. The company was founded in 1888 by William Henry Belk in Monroe, N.C., and is in the third generation of Belk family leadership. Its Belk.com Web site is designed with many special features to make online shopping exciting, convenient and easy for customers. It offers a wide assortment of fashion apparel, shoes and accessories for the entire family along with top name cosmetics, a wedding registry and a large selection of quality merchandise for the home.
To provide clarity in measuring Belk’s financial performance, Belk supplements the reporting of its consolidated financial information under generally accepted accounting principles (GAAP) with the non-GAAP financial measure of “net income excluding non-comparable items.” Belk believes that “net income excluding non-comparable items” is a financial measure that emphasizes the Company’s core ongoing operations and enables investors to focus on period-over-period operating performance. It is among the primary indicators Belk uses in planning and operating the business and forecasting future periods, and Belk believes this measure is an important indicator of recurring operations because it excludes items that may not be indicative of or are unrelated to core operating results.
Belk also excludes such items when evaluating company performance in connection with its incentive compensation plans. In addition, this measure provides a better baseline for modeling future earnings expectations and makes it easier to compare Belk’s results with other companies that operate in the same industry. Net income is the most directly comparable GAAP measure. The non-GAAP measure of “net income excluding non-comparable items” should not be considered in isolation or as a substitute for GAAP net income.
Certain statements made in this news release are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and the Company’s future performance, as well as our expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. You can identify these forward-looking statements through our use of words such as “may,” “will,” “intend,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “continue,” or other similar words.
Certain risks and uncertainties that may cause our actual results to differ significantly from the results we discuss in our forward-looking statements include, but are not limited to: general, economic, political and business conditions, nationally and in our market areas; unseasonable and extreme weather conditions in our market areas; the income received from GE, the operator of our private label credit card business; our ability to correctly anticipate appropriate inventory levels during the year; the efficient and effective operation of our distribution network and information systems to manage sales, distribution, merchandise planning and allocation functions; our ability to execute growth and expansion plans; our ability to successfully integrate the Parisian department stores acquired from Saks Incorporated; our ability to integrate and operate our in-house fine jewelry business; our ability to successfully expand and operate our Belk.com website; changes in buying, charging and payment behavior among our customers; changes in the competitive environment of the department store and broader retail industry; the effectiveness of our merchandising and sales promotion strategies; seasonal fluctuations in sales and net income; our ability to manage the Company’s expense structure; and our ability to comply with debt covenants which could adversely affect our capital resources, financial condition and liquidity.
For additional information on these and other risk factors, see the section captioned “This Report Contains Forward-Looking Statements” in our Annual Report on Form 10-K for the fiscal year ended January 30, 2010 and in other filings with the Securities and Exchange Commission. We believe these forward-looking statements are reasonable. However, you should not place undue reliance on such statements. We undertake no obligation to publicly update or revise any forward-looking statement, even if future events or new information may impact the validity of such statements.