##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the quarterly period endedAugust 4, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the transition period from  to
 Commission file number 000-26207
 BELK, INC.
 (Exact Name of Registrant as Specified In Its Charter)
 Delaware
    
    56-2058574(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)2801 West Tyvola Road, Charlotte, NC
    
    28217-4500(Address of Principal Executive Offices)
    
    (Zip Code)
 (704) 357-1000
  Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.
 þ o
  o þ o
  o þ




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##### 



BELK, INC.
Index to Form 10-Q
  
 PageNumberPART I. FINANCIAL INFORMATIONItem 1. Consolidated Financial Statements (unaudited)Condensed Consolidated Statements of Income for the Three and Six Months Ended August 4, 2007 and July 29, 2006
    
    
    4Consolidated Balance Sheets as of August 4, 2007 and February 3, 2007
    
    
    5Consolidated Statement of Changes in Stockholders Equity and Comprehensive Income for the Six Months Ended August 4, 2007
    
    
    6Consolidated Statements of Cash Flows for the Six Months Ended August 4, 2007 and July 29, 2006
    
    
    7Notes to Unaudited Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    18Item 4. Controls and Procedures
    
    
    18PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    19Item 1A. Risk Factors
    
    
    19Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    19Item 3. Defaults upon Senior Securities
    
    
    19Item 4. Submission of Matters to a Vote of Security Holders
    
    
    19Item 5. Other Information
    
    
    20Item 6. Exhibits
    
    
    20




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##### 



This Report Contains Forward-Looking Statements
    
    
    General economic, political and business conditions, nationally and in our market areas, including rates of economic
growth, interest rates, inflation or deflation, consumer credit availability, levels of consumer debt and bankruptcies,
tax rates and policy, unemployment trends, potential acts of terrorism and threats of such acts and other matters that
influence consumer confidence and spending;
    
    Our ability to anticipate the demands of our customers for a wide variety of merchandise and services, including our
predictions about the merchandise mix, quality, style, service,
convenience and credit availability of our customers;
    
    Unseasonable and extreme weather
conditions in our market areas;
    
    Seasonal fluctuations in quarterly net income due to the significant portion of our revenues generated during the
holiday season in the fourth fiscal quarter and the significant
amount of inventory we carry during that time;
    
    Competition from other department and specialty stores and other retailers, including luxury goods retailers, general
merchandise stores, Internet retailers, mail order retailers and off-price and discount stores, in the areas of price,
merchandise mix, quality, style, service, convenience, credit
availability and advertising;
    
    Our ability to effectively use advertising, marketing and promotional campaigns to generate high customer traffic in
our stores;
    
    Our ability to find qualified vendors from which to source our merchandise and our ability to access products in a
timely and efficient manner from a wide variety of domestic and
international vendors;
    
    The income we receive from, and the timing of receipt of, payments from GE Money Bank, an affiliate of GE Consumer
Finance, the operator of our private label credit card business, which depends upon the amount of purchases made
through the proprietary credit cards, the level of finance charge income generated from the credit card portfolio, the
number of new accounts generated, changes in customers credit card use, and GEs ability to extend credit to our
customers;
    
    Our ability to correctly anticipate the
appropriate levels of inventories during the year;
    
    Our ability to manage our expense
structure;
    
    Our ability to realize the planned efficiencies from our acquisitions and effectively integrate and operate the
acquired stores and businesses, including our fiscal year 2006 acquisition of Proffitts and McRaes stores, our fiscal
year 2007 acquisition of Parisian stores and our fiscal year 2007 acquisition of the assets of Migerobe and
commencement of our new fine jewelry business;
    
    Our ability to continue to increase our number of stores, including the availability of existing retail stores or store
sites on acceptable terms and our ability to successfully execute the Companys retailing concept in new markets and
geographic regions; and
    
    The efficient and effective operation of our distribution network and information systems to manage sales,
distribution, merchandise planning and allocation functions.




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##### 



BELK, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars in thousands, except share and per share amounts)
 Three Months Ended
    
    
    Six Months EndedAugust 4,
    
    
    July 29,
    
    
    August 4,
    
    
    July 29,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    $
    879,604
    
    
    $
    731,972
    
    
    $
    1,784,089
    
    
    $
    1,484,497Cost of goods sold (including occupancy and buying
expenses)
    
    
    617,828
    
    
    
    487,562
    
    
    
    1,230,417
    
    
    
    992,392Selling, general and administrative expenses
    
    
    236,510
    
    
    
    192,385
    
    
    
    490,790
    
    
    
    400,280Asset impairment and store closing costs
    
    
    114
    
    
    
    (116
    )
    
    
    8,731
    
    
    
    1,651Gain on sale of property and equipment
    
    
    763
    
    
    
    478
    
    
    
    1,485
    
    
    
    928Operating income
    
    
    25,915
    
    
    
    52,619
    
    
    
    55,636
    
    
    
    91,102Interest expense, net
    
    
    (14,259
    )
    
    
    (11,350
    )
    
    
    (28,880
    )
    
    
    (21,239
    )Gain (loss) on sale of investments
    
    
    (61
    )
    
    
    (61
    )
    
    
    (61
    )
    
    
    1,616Income before income taxes
    
    
    11,595
    
    
    
    41,208
    
    
    
    26,695
    
    
    
    71,479Income tax expense
    
    
    4,100
    
    
    
    14,900
    
    
    
    9,700
    
    
    
    25,700Net income
    
    $
    7,495
    
    
    $
    26,308
    
    
    $
    16,995
    
    
    $
    45,779Basic and diluted income per share
    
    $
    0.15
    
    
    $
    0.52
    
    
    $
    0.34
    
    
    $
    0.90Weighted average shares outstanding:Basic
    
    
    49,616,895
    
    
    
    50,359,923
    
    
    
    49,930,223
    
    
    
    51,118,879Diluted
    
    
    49,711,982
    
    
    
    50,359,923
    
    
    
    49,977,767
    
    
    
    51,118,879
  4




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##### 



BELK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars in thousands)
 August 4,
    
    
    February 3,2007
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    110,641
    
    
    $
    171,239Accounts receivable, net
    
    
    61,080
    
    
    
    61,434Merchandise inventory
    
    
    914,171
    
    
    
    931,870Prepaid income taxes, expenses and other current assets
    
    
    39,020
    
    
    
    32,926Total current assets
    
    
    1,124,912
    
    
    
    1,197,469Investment securities
    
    
    4,754
    
    
    
    5,317Property and equipment, net of accumulated depreciation and amortization
of $1,002,357 and $931,573 as of August 4, 2007 and February 3, 2007, respectively
    
    
    1,260,810
    
    
    
    1,280,426Goodwill
    
    
    318,417
    
    
    
    310,126Deferred income taxes
    
    
    1,426
    
    
    
    Other assets
    
    
    57,779
    
    
    
    55,277Total assets
    
    $
    2,768,098
    
    
    $
    2,848,615Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    270,983
    
    
    $
    309,722Accrued liabilities
    
    
    168,236
    
    
    
    166,625Accrued income taxes
    
    
    2,074
    
    
    
    22,686Deferred income taxes
    
    
    7,392
    
    
    
    14,020Current installments of long-term debt and capital lease obligations
    
    
    5,113
    
    
    
    4,594Total current liabilities
    
    
    453,798
    
    
    
    517,647Deferred income taxes
    
    
    
    
    
    
    13,835Long-term debt and capital lease obligations, excluding current installments
    
    
    723,091
    
    
    
    729,748Interest rate swap liability
    
    
    1,556
    
    
    
    1,435Deferred compensation and other noncurrent liabilities
    
    
    283,277
    
    
    
    259,928Total liabilities
    
    
    1,461,722
    
    
    
    1,522,593Stockholders equity:Preferred stock
    
    
    
    
    
    
    Common stock, 49.5 and 50.0 million shares issued and outstanding
as of August 4, 2007 and February 3, 2007, respectively
    
    
    495
    
    
    
    500Paid-in capital
    
    
    486,766
    
    
    
    507,127Retained earnings
    
    
    898,461
    
    
    
    901,378Accumulated other comprehensive loss
    
    
    (79,346
    )
    
    
    (82,983
    )Total stockholders equity
    
    
    1,306,376
    
    
    
    1,326,022Total liabilities and stockholders equity
    
    $
    2,768,098
    
    
    $
    2,848,615
  5




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##### 



BELK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
AND COMPREHENSIVE INCOME
(unaudited)
(dollars in thousands)
 AccumulatedOtherCommon
    
    
    Paid-in
    
    
    Retained
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    TotalBalance at February 3, 2007
    
    $
    500
    
    
    $
    507,127
    
    
    $
    901,378
    
    
    $
    (82,983
    )
    
    $
    1,326,022Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    16,995
    
    
    
    
    
    
    
    16,995Unrealized loss on investments,
net of $210 income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (353
    )
    
    
    (353
    )Unrealized gain on interest
rate swaps,
net of $11 income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    18Reclassification adjustment
for interest rate
swap dedesignation included in
net income,
net of $7 income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51
    )
    
    
    (51
    )Defined benefit expense, net of
$2,389 income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,023
    
    
    
    4,023Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,632Adoption of FIN 48 adjustment
    
    
    
    
    
    
    
    
    
    
    185
    
    
    
    
    
    
    
    185Cash dividends
    
    
    
    
    
    
    
    
    
    
    (20,097
    )
    
    
    
    
    
    
    (20,097
    )Issuance of stock-based compensation
    
    
    
    
    
    
    (1,296
    )
    
    
    
    
    
    
    
    
    
    
    (1,296
    )Stock-based compensation expense
    
    
    
    
    
    
    4,781
    
    
    
    
    
    
    
    
    
    
    
    4,781Common stock issued
    
    
    3
    
    
    
    372
    
    
    
    
    
    
    
    
    
    
    
    375Repurchase and retirement of common stock
    
    
    (8
    )
    
    
    (24,218
    )
    
    
    
    
    
    
    
    
    
    
    (24,226
    )Balance at August 4, 2007
    
    $
    495
    
    
    $
    486,766
    
    
    $
    898,461
    
    
    $
    (79,346
    )
    
    $
    1,306,376
  6




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##### 



BELK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)
 Six Months EndedAugust 4,
    
    
    July 29,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    16,995
    
    
    $
    45,779Adjustments to reconcile net income to net cash provided by operating activities:Asset impairment and store closing costs
    
    
    8,731
    
    
    
    1,651Deferred income taxes
    
    
    2,912
    
    
    
    1,511Depreciation and amortization expense
    
    
    80,936
    
    
    
    66,036Stock-based compensation expense
    
    
    4,781
    
    
    
    3,999(Gain) loss on sale of property and equipment
    
    
    (437
    )
    
    
    120Amortization of deferred gain on sale and leaseback
    
    
    (1,048
    )
    
    
    (1,048
    )(Gain) loss on sale of investments
    
    
    61
    
    
    
    (1,616
    )(Increase) decrease in:Accounts receivable, net
    
    
    348
    
    
    
    (2,132
    )Merchandise inventory
    
    
    17,699
    
    
    
    (14,548
    )Prepaid expenses and other assets
    
    
    (11,513
    )
    
    
    (7,675
    )Increase (decrease) in:Accounts payable and accrued liabilities
    
    
    (68,164
    )
    
    
    8,328Accrued income taxes
    
    
    (20,612
    )
    
    
    (36,092
    )Deferred compensation and other liabilities
    
    
    9,846
    
    
    
    7,203Net cash provided by operating activities
    
    
    40,535
    
    
    
    71,516Cash flows from investing activities:Proceeds from sales of investments
    
    
    
    
    
    
    2,225Purchases of property and equipment
    
    
    (102,835
    )
    
    
    (113,328
    )Proceeds from sales of property and equipment
    
    
    45,444
    
    
    
    3,416Net cash used by investing activities
    
    
    (57,391
    )
    
    
    (107,687
    )Cash flows from financing activities:Proceeds from issuance of long-term debt
    
    
    355
    
    
    
    8,522Principal payments on long-term debt and capital lease obligations
    
    
    (2,156
    )
    
    
    (15,195
    )Stock compensation tax benefit
    
    
    2,382
    
    
    
    1,102Dividends paid
    
    
    (20,097
    )
    
    
    (18,202
    )Repurchase of common stock
    
    
    (24,226
    )
    
    
    (39,097
    )Net cash used by financing activities
    
    
    (43,742
    )
    
    
    (62,870
    )Net decrease in cash and cash equivalents
    
    
    (60,598
    )
    
    
    (99,041
    )Cash and cash equivalents at beginning of period
    
    
    171,239
    
    
    
    308,817Cash and cash equivalents at end of period
    
    $
    110,641
    
    
    $
    209,776Supplemental schedule of noncash investing and financing activities:Increase in property and equipment through accrued purchases
    
    $
    35,501
    
    
    $
    28,124Decrease in property and equipment through adjustment of Parisian goodwill
    
    
    8,704
    
    
    
    Decrease in
property and equipment through adjustment of Parisian capital lease obligation
    
    
    4,315
    
    
    
    
  7




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##### 



BELK, INC. AND SUBSIDIARIES
 
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 (1) Basis of Presentation
   Revenues
  Three Months Ended
    
    Six Months EndedAugust 4,
    
    July 29,
    
    August 4,
    
    July 29,Merchandise Areas
    
    2007
    
    2006
    
    2007
    
    2006Womens
    
    
    40
    %
    
    
    41
    %
    
    
    40
    %
    
    
    40
    %Cosmetics, Shoes and Accessories
    
    
    28
    
    
    
    26
    
    
    
    29
    
    
    
    28Mens
    
    
    17
    
    
    
    17
    
    
    
    16
    
    
    
    16Home
    
    
    9
    
    
    
    11
    
    
    
    9
    
    
    
    10Childrens
    
    
    6
    
    
    
    5
    
    
    
    6
    
    
    
    6Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 (2) Implementation of New Accounting Standards
    8




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##### 



BELK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 (3) Comprehensive Income
  Three Months Ended
    
    
    Six Months EndedAugust 4,
    
    
    July 29,
    
    
    August 4,
    
    
    July 29,2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)
    
    
    (dollars in thousands)Net income
    
    $
    7,495
    
    
    $
    26,308
    
    
    $
    16,995
    
    
    $
    45,779Other comprehensive income (loss):Unrealized (loss) gain on
investments, net of $187 and $210
income tax
benefit for the
three and six
months ended
August 4, 2007,
respectively and
$87 income tax
benefit and $130
income tax expense
for the three and
six months ended
July 29, 2006,
respectively.
    
    
    (316
    )
    
    
    (146
    )
    
    
    (353
    )
    
    
    219Net change in fair value of interest
rate swaps, net of $290 income tax
expense and $30
income tax benefit
for the three and
six months ended
August 4, 2007,
respectively and
$180 and $749
income tax expense
for the three and
six months ended
July 29, 2006,
respectively.
    
    
    487
    
    
    
    303
    
    
    
    (51
    )
    
    
    1,262Interest rate swap losses
reclassified into interest expense
from
other comprehensive
income, net of $20
and $41 income tax
expense for the
three and six
months ended August
4, 2007,
respectively and
$20 and $41 income
tax expense for the
three and six
months ended July
29, 2006,
respectively.
    
    
    34
    
    
    
    34
    
    
    
    69
    
    
    
    69Reclassification adjustment for
interest rate swap dedesignation
gain included in
gain (loss) on
investments, net of
$7 income tax
benefit for the
three and six
months ended August
4, 2007,
respectively.
    
    
    (51
    )
    
    
    
    
    
    
    (51
    )
    
    
    Defined benefit expense, net of
$1,200 and $2,389 income taxes
for the three and
six months ended
August 4, 2007,
respectively and
$1,231 and $2,462
income taxes for
the three and six
months ended July
29, 2006,
respectively.
    
    
    2,020
    
    
    
    2,074
    
    
    
    4,023
    
    
    
    4,148Other comprehensive income
    
    
    2,174
    
    
    
    2,265
    
    
    
    3,637
    
    
    
    5,698Total comprehensive income
    
    $
    9,669
    
    
    $
    28,573
    
    
    $
    20,632
    
    
    $
    51,477
 (4) Accumulated Other Comprehensive Loss
  August 4,
    
    
    February 3,2007
    
    
    2007(dollars in thousands)Unrealized gains on investments, net of $853 and $1,063
income tax expense as of August 4, 2007 and February 3, 2007, respectively.
    
    $
    1,439
    
    
    $
    1,792Unrealized loss on interest rate swaps, net of $121
and $125 income tax benefit as of August 4, 2007 and February 3, 2007,
respectively.
    
    
    (204
    )
    
    
    (171
    )Defined benefit plans, net of $47,834 and $50,223
income tax benefit as of August 4, 2007 and
February 3, 2007, respectively.
    
    
    (80,581
    )
    
    
    (84,604
    )Accumulated other comprehensive loss
    
    $
    (79,346
    )
    
    $
    (82,983
    )
 (5) Parisian Acquisition
  9




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##### 



BELK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
    dollars in thousandsAccounts receivable, net
    
    $
    1,176Inventory
    
    
    207,012Other current assets
    
    
    4,627Property, plant and equipment
    
    
    185,587Goodwill
    
    
    66,230Deferred income taxes
    
    
    27,353Other assets
    
    
    6,545Total assets acquired
    
    
    498,530Current liabilities
    
    
    156,431Long-term liabilities
    
    
    27,395Total liabilities assumed
    
    
    183,826Net assets acquired
    
    $
    314,704
  (6) Borrowings
   (7) Income Taxes
  10




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##### 



BELK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
     (8) Asset Impairment and Store Closing Costs
  (9) Sale of Property
   (10) Pension and Postretirement Benefits
  11




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##### 



BELK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
  Three Months EndedPension Plan
    
    
    Old SERP Plan
    
    
    Postretirement PlanAugust 4,
    
    
    July 29,
    
    
    August 4,
    
    
    July 29,
    
    
    August 4,
    
    
    July 29,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)Service cost
    
    $
    877
    
    
    $
    896
    
    
    $
    46
    
    
    $
    33
    
    
    $
    42
    
    
    $
    40Interest cost
    
    
    5,783
    
    
    
    5,386
    
    
    
    177
    
    
    
    164
    
    
    
    418
    
    
    
    400Expected return on
plan assets
    
    
    (5,798
    )
    
    
    (5,981
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of
transition
obligation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65
    
    
    
    65Amortization of
prior service cost
    
    
    124
    
    
    
    144
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of the
net (gain) loss
    
    
    2,927
    
    
    
    3,004
    
    
    
    49
    
    
    
    10
    
    
    
    41
    
    
    
    (18
    )Net periodic
benefit expense
    
    $
    3,913
    
    
    $
    3,449
    
    
    $
    272
    
    
    $
    207
    
    
    $
    566
    
    
    $
    487
 Six Months EndedPension Plan
    
    
    Old SERP Plan
    
    
    Postretirement PlanAugust 4,
    
    
    July 29,
    
    
    August 4,
    
    
    July 29,
    
    
    August 4,
    
    
    July 29,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)Service cost
    
    $
    1,754
    
    
    $
    1,792
    
    
    $
    92
    
    
    $
    66
    
    
    $
    84
    
    
    $
    80Interest cost
    
    
    11,566
    
    
    
    10,772
    
    
    
    354
    
    
    
    328
    
    
    
    836
    
    
    
    800Expected return on
plan assets
    
    
    (11,596
    )
    
    
    (11,962
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of
transition
obligation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    130
    
    
    
    130Amortization of
prior service cost
    
    
    248
    
    
    
    288
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of the
net (gain) loss
    
    
    5,854
    
    
    
    6,008
    
    
    
    98
    
    
    
    20
    
    
    
    82
    
    
    
    (36
    )Net periodic
benefit expense
    
    $
    7,826
    
    
    $
    6,898
    
    
    $
    544
    
    
    $
    414
    
    
    $
    1,132
    
    
    $
    974
  (11) Earnings per Share
  Three Months Ended
    
    
    Six Months EndedAugust 4,
    
    
    August 4,2007
    
    
    2007Basic Shares
    
    
    49,616,895
    
    
    
    49,930,223Dilutive contingently-issuable
non-vested share awards
    
    
    95,087
    
    
    
    47,544Diluted Shares
    
    
    49,711,982
    
    
    
    49,977,767
 (12) Repurchase of Common Stock
  12




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##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
  February 3, 2007.
        13




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##### 



Parisian Acquisition
   Migerobe, Inc. Acquisition
  Results of Operations
  Three Months Ended
    
    Six Months EndedAugust 4,
    
    July 29,
    
    August 4,
    
    July 29,2007
    
    2006
    
    2007
    
    2006SELECTED FINANCIAL DATARevenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold (including occupancy and
buying expenses)
    
    
    70.2
    
    
    
    66.6
    
    
    
    69.0
    
    
    
    66.9Selling, general and administrative expenses
    
    
    26.9
    
    
    
    26.3
    
    
    
    27.5
    
    
    
    27.0Asset impairment and store closing costs
    
    
    
    
    
    
    
    
    
    
    0.5
    
    
    
    0.1Gain on sale of property and equipment
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Operating income
    
    
    2.9
    
    
    
    7.2
    
    
    
    3.1
    
    
    
    6.1Interest expense, net
    
    
    1.6
    
    
    
    1.6
    
    
    
    1.6
    
    
    
    1.4Gain (loss) on sale of investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Income before income taxes
    
    
    1.3
    
    
    
    5.6
    
    
    
    1.5
    
    
    
    4.8Income tax expense
    
    
    0.5
    
    
    
    2.0
    
    
    
    0.5
    
    
    
    1.7Net income
    
    
    0.9
    
    
    
    3.6
    
    
    
    1.0
    
    
    
    3.1Comparable store net revenue increase
    
    
    2.2
    
    
    
    4.0
    
    
    
    2.5
    
    
    
    3.7
 Revenues
  Three Months Ended
    
    Six Months EndedAugust 4,
    
    July 29,
    
    August 4,
    
    July 29,Merchandise Areas
    
    2007
    
    2006
    
    2007
    
    2006Womens
    
    
    40
    %
    
    
    41
    %
    
    
    40
    %
    
    
    40
    %Cosmetics, Shoes and
Accessories
    
    
    28
    
    
    
    26
    
    
    
    29
    
    
    
    28Mens
    
    
    17
    
    
    
    17
    
    
    
    16
    
    
    
    16Home
    
    
    9
    
    
    
    11
    
    
    
    9
    
    
    
    10Childrens
    
    
    6
    
    
    
    5
    
    
    
    6
    
    
    
    6Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 14




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##### 



Comparison of the Three and Six Months Ended August 4, 2007 and July 29, 2006
 Revenues.
  Cost of goods sold.
  Selling, general and administrative expenses
 
    
    The Companys integration of the acquired fine jewelry business has resulted in an
incremental increase in SG&A expenses as a percentage of
revenues of 0.22%.
    
    Acquisition-related expenses increased as a percentage of revenues by 0.20%, or $1.8
million, due to the fiscal year 2007 Parisian Acquisition
integration.
    
    Net advertising expense increased as a percentage of revenues by 0.31%, or $6.7 million,
primarily due to increased costs associated with Parisian separate advertising,
advertising for private brands and owned fine jewelry business.
    
    Net credit income increased as a percentage of revenues by 0.11%, or $3.5 million, due
to a 30.3% overall increase in Belk charge card sales volume, driven by the Parisian
Acquisition along with 3.4% increased credit penetration.
  
    
    The Companys integration of the acquired fine jewelry business has resulted in an
incremental increase in SG&A expenses as a percentage of
revenues of 0.21%.
 15




---



##### 




    
    Acquisition-related expenses increased as a percentage of revenues by 0.64%, or $11.5
million, due to the fiscal year 2007 Parisian Acquisition
integration.
    
    Employee benefits decreased as a percentage of revenues by 0.25%, or $4.6 million,
primarily driven by favorable medical claims experience.
    
    Net credit income increased as a percentage of revenues by 0.12%, or $7.2 million, due
to a 30.7% overall increase in Belk charge card sales volume, driven by the Parisian
Acquisition along with 3.0% increased credit penetration.
 Asset Impairment and Store Closing Costs.
 Interest Expense, net.
  Gain (loss) on sale of investments.
 Seasonality and Quarterly Fluctuations
  Liquidity and Capital Resources
    16




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##### 



Contractual Obligations and Commercial Commitments
 Form 10-K
 17




---



##### 



Off-Balance Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4. Controls and Procedures
   18




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##### 



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 April 12, 2007.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  ISSUER PURCHASES OF EQUITY SECURITIES
 Total Number of
    
    
    Approximate DollarShares Purchased
    
    
    Value of Sharesas Part of
    
    
    that May Yet BeTotal Number of
    
    
    Average Price Paid
    
    
    Publicly Announced
    
    
    Purchased Under thePeriod
    
    Shares Purchased
    
    
    per Share
    
    
    Plans or Programs
    
    
    Plans or ProgramsMay 6  June 2, 2007
    
    
    781,484
    (1)
    
    $
    31.00
    
    
    
    781,484
    
    
    
    June 3  July 7, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    July 8  August 4, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    781,484
    
    
    $
    31.00
    
    
    
    781,484
    
    
    
    
 
 (1)
    
    On April 4, 2007, the Board of Directors approved the repurchase of up to
800,000 shares of the Companys Class A common stock and 800,000 shares of the Companys Class B
common stock at a price of $31.00 per share. The Company repurchased 472,843 Class A shares and
308,641 Class B shares pursuant to the self-tender offer which commenced on April 25, 2007 and was
completed on May 23, 2007. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
   Term Expiring 2010
    
    Votes For
    
    Votes WithheldJohn R. Belk
    
    
    471,867,238
    
    
    
    2,366John A. Kuhne
    
    
    471,828,008
    
    
    
    41,596Elizabeth Valk Long
    
    
    471,867,238
    
    
    
    2,366
 19




---



##### 



Item 5. Other Information
  
 Item 6. Exhibits
 (a)
    
    Exhibits
 3.1
    
    Form of Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to pages B-24 to B-33 of the Companys Registration Statement
on Form S-4/A, filed on March 5, 1998 (File No.
333-42935)).3.2
    
    Form of Second Amended and Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 of the Companys Annual Report on Form 10-K for the fiscal year ended
January 31, 2004).4.1
    
    Articles Fourth, Fifth and Seventh of the Amended and Restated Certificate of
Incorporation of the Company (incorporated by reference to pages B-24 to B-33 of the
Companys Registration Statement on Form S-4/A, filed on March 5, 1998 (File No.
333-42935)).4.2
    
    Articles I and IV of the Second Amended and Restated Bylaws of the Company
(incorporated by reference to Exhibit 3.2 of the Companys Annual Report on Form 10-K for
the fiscal year ended January 31, 2004).31.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule
15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted under Section
302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule
15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted under Section
302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.32.2
    
    Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
 20




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##### 



SIGNATURES
  BELK, INC.Dated:  September 13, 2007
    By:
    /s/ Ralph A. PittsRalph A. PittsExecutive Vice President, General Counsel and
Corporate Secretary
(Authorized Officer of the Registrant)By:
    /s/ Brian T. MarleyBrian T. MarleyExecutive Vice President and Chief Financial Officer
(Principal Financial Officer) 21