CHARLOTTE, N.C.–The cost of strategic initiatives caused Belk’s net income for the third quarter to drop 67 percent. Sales increased 2.8 percent in the period ending Nov. 2.
Net income for the third quarter was $3.6 million, compared to $11.1 million for the same prior-year period. Net income excluding non-comparable items was $4.6 million for the period, compared to $9.8 million for the same prior-year period, a 53 percent drop. The decrease was primarily the result of expenses associated with the company’s investments in strategic initiatives during the period.
Net sales for the 13-week period increased 2.8 percent to $860.7 million compared to the prior-year period. Comparable store sales grew with a 3.5 percent increase. The sales increase for the period resulted primarily from a continuation of strong e-commerce sales and execution of the company’s key strategies, Belk said.
“Comparable sales grew 3.5 percent in the quarter, aided by colder weather and the investments we have made in the business, including store remodels, e-commerce and supply chain,” said Tim Belk, chairman and CEO. “November is the ‘go live’ month for a new technology platform which includes replacement of much of our IT infrastructure and a new merchandising system. In addition, we are testing technology to fulfill belk.com orders from stores to support our digital business, which grew 45 percent in the quarter. These investments will add expense and impact earnings over the next 18 months.”