Ingles’ Q3 Sales, Income Up

Ingles Markets, Inc. Friday reported higher sales for the three- and nine-month periods ended June 26, vs. the same periods of the previous year. Additionally, the company said that its net income was higher for the current-year three-month period and level for the comparative nine-month periods, due to improving operating performance and economic conditions so far in fiscal year 2010, as well as extra costs in fiscal year 2009 related to financing transactions.

“We are pleased with our growth in sales and in customer visits to our stores,” said Robert P. Ingle, CEO of the Asheville, N.C.-based chain. “Our improved results highlight our goals of building sales and customer visits as drivers to deliver better results in an economic and competitive environment that still has significant challenges.”

Net sales rose 3.5 percent to $856.1 million for the three months ended June 26, compared with $826.8 million for the year-ago period. Excluding gasoline, whose retail prices were significantly higher in the June 2010 quarter compared with last year, grocery-segment comparable-store sales edged up 0.8 percent. The number of customer transactions (excluding gas) grew 7.9 percent, while the comparable average transaction size fell 7.0 percent compared with the year-ago period. Ingles attributed this trend in total and average transactions, which has followed a similar pattern for several recent quarters, to the impact of the recession on consumer spending, as characterized by more trips to the store and lower average purchases.

Gross profit for the June 2010 quarter rose 2.8 percent, to $196.9 million, a $5.3 million increase over last year. Gross profit, as a percentage of sales was 23.0 percent for the June 2010 quarter vs. 23.2 percent for the June 2009 quarter, which the company said was because of increased sales. Excluding gas sales, grocery segment gross profit as a percentage of sales increased to 26.0 percent for the three months ended June 26, compared with 25.9 percent for the year-ago period.

Net income came to $11.7 million, or 1.4 percent of sales, for the June 2010 quarter, vs. $4.7 million, or 0.6 percent of sales, last year.

For the nine-month period ended June 2010, net sales went up 4.7 percent, to $2.53 billion, compared with the same period in the prior fiscal year. Excluding gas sales where the retail-per-gallon price was 28 percent higher in the June 2010 nine-month period, sales increased 1.7 percent over the comparable nine-month periods, and grocery-segment comps for the nine months ended June 2010 grew 0.9 percent compared with the year-ago period. Excluding gas, the number of customer transactions increased 10.0 percent and the average transaction size dropped by 7.7 percent.

Gross profit dollars for the June 2010 nine-month period rose $9.8 million, or 1.8 percent, to $568.0 million, vs. $558.2 million last year. Gross profit as a percentage of sales was 22.4 percent and 23.1 percent for the nine months ended June 2010, and June 2009, respectively. According to Ingles, gross profit margin declined mainly because of gas sales. Excluding gas sales, grocery-segment gross profit as a percentage of sales was 25.5 percent for the nine months ended June 2010, compared with 25.4 percent in the year-ago period.

Net income was $23.3 million, or 0.9 percent of sales, for the nine-month period ended June 2010, vs. $23.6 million, or 1.0 percent of sales, for the nine-month period ended June 2009.

During the June 2010 nine-month period, Ingles completed two new stores, and one remodeled store. Cap ex for this period came $65.3 million and is expected to total around $90 million for the full fiscal year, including outlays for stores slated to open during fiscal 2011.

Ingles operates 202 supermarkets, in addition to 70 neighborhood shopping centers, all but 12 of which contain an Ingles supermarket.