Higher Income Tax Expense Hits Ingles' Income in Q2

Sales jumped 14.9 percent during the second quarter for Ingles Markets, Inc., but the regional grocer's net income decreased 3.8 percent to $13.0 million, primarily because of higher income tax expense.

For the three-month period ended March 29, Asheville, N.C.-based Ingles said net sales increased by $101.6 million to $782.8 million, characterized by increases in all major categories. Grocery segment comparable-store sales grew 15.0 percent for the same period. (Easter occurred during the company's second fiscal quarter of 2008, but in the third fiscal quarter of 2007.) Excluding the effect of additional Easter sales and gasoline sales, comparable store sales increased 8.4 percent.

"We are pleased with our sales increases," c.e.o. Robert P. Ingle said in a statement. "Quality, value, convenience, and service are important to our customers. With gasoline and other costs going up, we want our customers to be able to get what they need with a single trip to Ingles."

Total gasoline gallons sold at Ingles during the quarter increased approximately 19 percent, while the average price per gas gallon increased 85 cents compared with the same period of fiscal 2007. The number of customer transactions increased 9.7 percent, while the average transaction amount changed by less than one-half of 1 percent, Ingles said.

Ingles also released results for the first half of fiscal year 2008. Sales for the period increased 14.1 percent to $1.56 billion, while grocery segment comparable-store sales grew 13.9 percent. Pre-tax income increased 20.3 percent compared with the first half of fiscal year 2007.

Ingles noted that overall grocery sales were affected by rising costs during the fiscal 2008 six-month period, as evidenced by year-over-year increases in the food category of the consumer price index of 2.3 percent for the December 2007 quarter and 5.3 percent for the March 2008 quarter.

Net income for the six-month period increased $1.0 million, or 4.1 percent, to $25.7 million.

During the March 2008 six-month period, Ingles completed four replacement stores, one remodeled store, purchased nine land parcels, added five fuel centers, and purchased two shopping centers where the company operated leased stores. For the balance of the fiscal year, Ingles said it expects to open two new stores, three remodeled stores, three replacement stores, and add a total of eight new fuel stations.

Ingles currently operate 197 stores and 49 fuel centers.
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