Ingles Markets Reports Sales Growth in Third Quarter

ASHEVILLE, N.C. - Regional retailer Ingles Markets Inc. today announced earnings for the third quarter ended June 28, 2003. Net sales increased 4.3 percent over net sales for the third quarter of 2002, while comparable store sales increased 2.8 percent for the same period.

Sales comparisons for the quarter were affected by the timing of the Easter holiday. In the current fiscal year, Easter sales fell in the third quarter. Comparable store sales growth for the third quarter excluding the effect of Easter sales increased 2.0 percent.

Gross profit for the June 2003 quarter increased in total dollars by 1.4 percent, but declined as a percentage of sales to 26.0 percent of sales for the June 2003 quarter compared to 26.8 percent of sales for the June 2002 quarter. Operating and administrative expenses increased 3.3 percent in total dollars for the June 2003 quarter, but decreased as a percentage of sales to 23.1 percent of sales for the June 2003 quarter compared to 23.3 percent of sales for the June 2002 quarter.

Chairman and CEO Robert P. Ingle said, "We have a new president on board and our primary focus is on driving sales. We are very pleased with our sales growth for the quarter as a result of this focus. In order to drive sales, we ran more aggressive promotions resulting in a gross margin decline as a percentage of sales, but our gross margin dollars increased." Ingle also noted that labor expense increased due to additional labor hours in its stores as a part of its focus on customer service.

"We intend to continue to focus on improving our business by increasing sales, enhancing customer service, improving our store base, refining our product mix and controlling our operating costs," he said.

During the quarter, Ingles opened one new store, completed one major remodel/expansion and closed two older stores. For the balance of this fiscal year, plans are to open one replacement store and complete one major remodel/expansion.

Ingles operated 199 stores at the end of June 2003 compared to 201 stores at the end of June 2002.
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