Ingles’ Q2 Net Sales Lifted by Associates’ ‘Hard Work’
Ingles Markets Inc. has reported higher sales and pretax income for the three and six months ended March 30, despite the disadvantageous timing of the Easter holiday. Robert P. Ingle II, chairman of the board of Ingles, attributed the sales increase to “the hard work of our associates.”
For the second quarter ended March 30, the company’s net sales came to $1 billion, an increase of $17.3 million, or 1.8 percent, while its net income totaled $15 million, versus net sales of $984.6 million and net income of $9.3 million for the year-ago period.
Excluding gasoline sales and the effect of extra 2018 Easter sales, Ingles’ retail grocery comparable-store sales grew 3.4 percent over the comparative fiscal second quarter. The retailer’s customer transactions and average transaction sizes, both excluding gasoline, rose from the prior year’s second quarter.
The company noted that in fiscal 2018, Easter occurred in March and benefited sales for the second quarter of last fiscal year, while in fiscal 2019, Easter occurred in April and so will benefit Ingles’ third fiscal quarter.
Gross profit for the March 2019 quarter was $244.3 million, 3.9 percent higher than gross profit of $235.2 million for the year-ago period. Gross profit, as a percentage of sales, was 24.4 percent for the March 2019 quarter, versus 23.9 percent for the March 2018 quarter.
For the six months ended March 30, Ingles’ net sales were $2.06 billion and its pretax income came $47.3 million, compared with net sales of $2 billion and pretax income of $37.6 million last year. The company’s net income was $37.2 million and $54.4 million for the comparative 2019 and 2018 six-month periods, however, due to the fact that in fiscal 2018, six-month net income was positively affected by a $26.7 million tax benefit from the passage of the Tax Cuts and Jobs Act of 2017, while this year’s first half had no such tax benefit.
The company’s retail comps for the first half, excluding the effect of gasoline and extra 2018 Easter sales, rose 3.8 percent. Customer transactions and average transaction sizes, both excluding gasoline, increased from the prior-year period.
Ingles’ gross profit for the six months ended March 2019 rose 4.8 percent to $502.7 million, from $479.8 million in the year-ago period, and its gross profit, as a percentage of sales, was 24.4 percent for the March 2019 six-month period, versus 24 percent last year.
The grocer’s capital expenditures for the March 2019 six-month period came to $94.2 million, compared with $88.8 million last year. Ingles also continues to make improvements to its existing store base, and expects cap ex for the entire fiscal year to total about $140 million to $180 million.
“We continue to make investments in our company that will benefit many future periods,” added Ingle.
Asheville, N.C.-based Ingles operates 198 supermarkets in six southeastern states. Along with its supermarket operations, the company operates neighborhood shopping centers, most of which contain an Ingles supermarket, and owns a fluid-dairy facility that supplies company supermarkets and unaffiliated customers. Ingles is No. 30 on Progressive Grocer’s 2018 top 50 list of the top grocers in the United States.