Ingles’ Net Income Takes a Tumble in Q3

Southeast grocer Ingles Markets, Inc. has reported less-than-stellar results for its third quarter ended June 24.

Net sales totaled $1.43 billion for the quarter, a slight decrease from the $1.46 billion in the quarter ended June 25, 2022. Gross profit totaled $338.1 million, or 23.6% of sales – a drop from last year’s $351.9 million, or 24.1% of sales.

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Q3 net income took a big tumble, totaling $48.3 million, compared with last year’s $67.8 million. Basic and diluted earnings per share for Class A Common Stock were $2.60 and $2.54, respectively, for the quarter ended June 24, 2023, as compared with $3.65 and $3.57, respectively, for the same time period last year. Basic and diluted earnings per share for Class B Common Stock also decreased at $2.36, compared with last year’s $3.32.

Ingles’ operating and administrative expenses for Q3 2023 totaled $270.9 million, an increase from Q3 2022's $257.3 million. Interest expenses totaled $5.4 million, a slight uptick from last year’s $5.3 million.

The food retail also reported earnings for the first nine months of fiscal 2023. For the nine months ending June 24, net sales totaled $4.31 billion, an increase from last year’s $4.23 billion.

Gross profit totaled $1.04 billion, or 24.0% of sales – slightly less from last year’s $1.05 billion, or 24.9% of sales. Meanwhile, the reported $158.2 million net income is a significant drop compared with last year’s $202.6 million.

Operating and administrative expenses totaled $816.0 million for the nine months, as compared to last year’s $772.2 million. Interest expenses remained flat at $16.1 million for both nine-month periods ended June 24, 2023, and June 25, 2022.

Capital expenditures for the June 2023 nine-month period totaled $137.1 million, compared with $73.2 million for the June 2022 nine-month period. Capital expenditures for the entire fiscal year 2023 are expected to be approximately $170 million to $190 million.

Ingles currently has no outstanding borrowings under its $150.0 million line of credit. The company believes its financial resources, including its line of credit and other internal and external sources of funds, will be sufficient to meet planned capital expenditures, debt service and working capital requirements for the foreseeable future.

Robert P. Ingle II, chairman of the board, stated, “It is our goal to provide the best customer experience with fresh quality products at affordable prices. We appreciate our customers and associates for their continued dedication and loyalty.”

On June 26, Ingles’ board of directors declared a cash dividend of $0.165 per share on all its Class A Common Stock and $0.15 per share on all its Class B Common Stock. This is an annual rate of $0.66 and $0.60 per share, respectively.

Asheville, N.C.-based Ingles operates 198 supermarkets in six southeastern states. In conjunction with its supermarket operations, the company operates neighborhood shopping centers, most of which contain an Ingles supermarket. It also owns a fluid-dairy facility that supplies its supermarkets and unaffiliated customers. Ingles is No. 56 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America.