Profit drops as Belk embarks on expansion

Belk blamed costs associated with strategic initiatives for its drop in profit in the fourth quarter.

The retailer reported a 7.8% decrease in net income to $146.1 million during the fiscal year that ended Jan. 31, compared with from $158.5 million in fiscal 2014.

“Despite challenges early in the year, we ended FY15 with strong holiday sales and are pleased to report our fifth consecutive year of positive comparable store sales,” CEO Tim Belk said. “Although our annual earnings continue to be impacted by additional expense associated with key strategic initiatives, fourth quarter net income rose 8.3 percent on a sales increase of 5%. We are encouraged by the recent trends and believe we are well positioned for the year ahead.”

The company has been increasing its store count, remodeling other stores and improving its e-commerce fulfillment center in Jonesville, S.C. Net sales at Belk totaled $4.11 billion, up 1.8 percent from $4.04 billion the previous year. Same store sales climbed 1.5%. Merchandise categories achieving the highest growth rate for the year include activewear; ladies contemporary, resort and bridge fashions; ladies suits; men’s sportswear; and juniors.

Belk has 297 stores in 16 Southern states.