Skip to main content

Ingles Q3 Net Sales Up, Net Income Down

Ingles Markets Inc. has posted higher sales for the three months ended June 25, compared with the three months ended June 27, 2015. Net sales grew despite considerably lower retail gasoline prices versus the year-ago period and more Easter sales in the third quarter of last fiscal year. Easter was in the second quarter of the current fiscal year. Net income came to $12.7 million for the quarter ended June 25, compared with $13.8 million last year.

For the nine months ended June 25, net income $40 million, versus $43.1 million for the year-ago period.

During fiscal year 2016, the Southeast regional grocer incurred expenses connected with preparing certain properties for redevelopment into future new stores, including costs to tear down and write off the properties. These expenses negatively affected net income comparisons between the current year three- and nine-month periods and those of the previous year.

“We are pleased with this quarter’s sales growth and our store base capital investments that will benefit future periods,” noted Chairman of the Board Robert P. Ingle II.

Third-quarter Results

Net sales increased by $11.2 million, or 1.2 percent, to $957.2 million for the three months ended June 25, from $946 million for the year-ago period. According to Ingles, lower gas sales because of a decline in the average sales price per gallon were offset by higher sales in other products. Excluding gas sales and the effect of additional Easter sales in last year’s quarter, retail grocery comparable-store sales rose 2.6 percent over last year.

Gross profit for the June 2016 quarter increased 4.8 percent to $232.9 million, compared with $222.2 million for the third quarter of fiscal 2015. Gross profit, as a percentage of sales, was 24.3 percent for the June 2016 quarter, versus 23.5 percent for year-ago period. Excluding gas sales, retail grocery gross margin grew by 39 basis points from the year-ago period.

Operating and administrative expenses for the June 2016 quarter were $199.4 million, compared with $190.7 million last year. Ingles attributed most of the increase to higher personnel and other costs incurred to boost sales. Losses from asset disposals came $1.6 million during the June 2016 quarter, compared with $0.3 million in the year-ago period.

Net income totaled $12.7 million for the three-month period ended June 25, versus $13.8 million last year. Net income, as a percentage of sales, was 1.3 percent for the June 2016 quarter and 1.5 percent for the June 2015 quarter.

Nine-month Results

Nine month fiscal 2016 and 2015 sales each were $2.83 billion. Retail grocery comps sales, excluding the effect of gasoline, rose 2.1 percent. Lower retail gas and fluid dairy prices were offset by higher sales of other products, according to Ingles

Gross profit for the nine months ended June 25 was up 3.3 percent to $687.2 million, versus $665.2 million last year. Gross profit, as a percentage of sales, was 24.3 percent for the June 2016 nine-month period, compared with 23.5 percent for the June 2015 nine-month period. Retail grocery segment gross profit as a percentage of sales, excluding gas sales, climbed 18 basis points from the year-ago period.

Operating and administrative expenses were $589.7 million for the nine months ended June 25, and $563.3 million last year.

Net income totaled $40 million for the nine-month period ended June 25, versus $43.1 million for year-ago period. Net income, as a percentage of sales, was 1.4 percent for the nine months ended June 25, compared with 1.5 percent last year.

Capital expenditures for the June 2016 nine-month period were $107.8 million, compared with $73.5 million last year. The company noted that its higher cap ex this year is focused on stores opened this year and slated to open early next year, as well as continuing improvements to the existing store base. Cap ex for the entire fiscal year is expected to be about $120 million to $145 million.

Asheville, N.C.-based Ingles operates 201 supermarkets. In conjunction with its supermarket operations, the company operates neighborhood shopping centers, most of which include an Ingles supermarket. Ingles also owns a fluid dairy facility that supplies its supermarkets and unaffiliated customers.

X
This ad will auto-close in 10 seconds