Ingles Posts Higher Q2 Sales, Income

Ingles Markets Inc. has reported higher sales and net income for the three and six months ended March 29, 2014, versus the three and six months ended March 30, 2013. Second-quarter net sales grew $27.1 million to $947.8 million and net income rose 29.2 percent to $10.5 million, compared with net income of $8.1 million for the second quarter of 2013. For the first six months of fiscal 2014, net sales increased $37.2 million to $1.89 billion and net income grew 1.7 percent to $20 million, versus the first six months of fiscal 2013.

"We are pleased with our sales and net income growth this quarter," said CEO Robert P. Ingle II. "Our stores continue to focus on sales growth, and that certainly made a difference this quarter."

Ingles' Second-quarter Results

Net sales increased 2.9 percent to $947.8 million for the three months ended March 29, 2014, from $920.7 million for the three months ended March 30, 2013. According to Ingles, sales growth was negatively affected by the Easter holiday, which benefited sales in the second quarter of last fiscal year but didn’t occur until the third quarter this fiscal year. Comparable-store sales, excluding gasoline and extra Easter 2013 sales, rose 2.5 percent over the comparable quarters.

Ingles operated 203 stores containing a total of about 11.1 million square feet at March 29, 2014. In the past 12 months the grocer opened one new store and closed one store, leading to a slight uptick in square footage.

Gross profit for the March 2014 quarter increased 3.8 percent to $206.1 million, compared with $198.6 million in the year-ago period. Gross profit, as a percentage of sales, was 21.7 percent for the March 2014 quarter, versus 21.6 percent for the March 2013 quarter. Gross profit contributed by gasoline sales was lower this quarter, which Ingles attributed to promotional activities involving gas sales.

Net income came to $10.5 million for the three-month period ended March 29, 2014, compared with $8.1 million for the three-month period ended March 30, 2013. Net income, as a percentage of sales, was 1.1 percent for the quarter ended March 29, 2014, versus with 0.9 percent for the year-ago period.

Ingles' First-half Results

For the first half of 2014, net sales rose $37.2 million to $1.89 billion for the six months ended March 29, 2014, from $1.86 billion for the six months ended March 30, 2013. Excluding gas and extra Easter 2013 sales, grocery-segment comps grew 0.8 percent.

Gross profit for the six months ended March 29, 2014, totaled $409.6 million, compared with $406.9 million for the year-ago period. Gross profit, as a percentage of sales, was 21.6 percent for the March 2014 six-month period, versus 21.9 percent for the March 2013 six-month period.

Net income came to $20 million for the six-month period ended March 29, 2014, compared with $19.7 million for last year. Net income, as a percentage of sales, was 1.1 percent for both six-month periods.

Capital expenditures for the March 2014 six-month period totaled $51.8 million, versus $47 million for the March 2013 six-month period. The grocer expects cap ex for the entire fiscal year to be about $100 million to $140 million, including stores slated to open in fiscal 2014 and 2015, as well as for the company's ongoing remodeling program involving multiple stores.

Asheville, N.C.-based Ingles operates 203 supermarkets, as well as neighborhood shopping centers, most of which contain an Ingles supermarket, and a fluid dairy facility that supplies company supermarkets as well as unaffiliated customers.