Ingles Sales Up, Profits Off for Q3

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Ingles Sales Up, Profits Off for Q3

Ingles Markets said Friday that higher gasoline and fluid dairy prices put enough pressure on margins to drag down gross profits for third quarter ended June 28. The Asheville, N.C.-based chain reported a net sales increase of $96.7 million or 13.1 percent for the quarter, but gross profit as a percentage of sales decreased slightly to 22.9 percent, from 23.7 percent in third quarter 2007.

Sales for the nine months ended June 2008 increased by $289.7 million, or 13.8 percent, to $2.40 billion. During those nine months, Ingles completed one new store, three remodeled stores, five replacement stores, and purchased 11 land parcels for future store development. The company also purchased two shopping centers where it operated leased stores and added eight fuel centers.

For the balance of the fiscal year, Ingles expects to open two remodeled stores, two new stores, one replacement store, and add four fuel stations at new or existing stores.

Customer visits to Ingles Markets increased 8.9 percent while the average transaction size (excluding gasoline) was approximately 51 cents lower than the third quarter of fiscal year 2007. The Company believes these figures indicate customers are consolidating shopping needs and purchasing ready to eat items instead of restaurant dining due to the economy.

This chain's 21st consecutive quarter of comparable store sales growth that Ingles stated was broad-based across the company's departments.

"The current economic environment is difficult for retailers and their customers," said Robert P. Ingle, c.e.o. "Costs are increasing across the board."

Ingle said the chain was nonetheless "pleased with our sales growth that benefited from our customers making more trips to Ingles to purchase groceries, gasoline and many other things they need. Our focus is to continue to provide quality, service, and convenience while doing the best we can to keep prices low for our customers."

Net income totaled $16.0 million, 1.9 percent of sales, for the three-month period ended June 28, 2008, compared with $19.7 million, 2.7 percent of sales for the three-month period ended June 30, 2007. The company attributed this drop in net income to a $4.9 million property sale in 2007. Excluding this property sale, net income increased $1.2 million, or 8.1 percent, the company stated. At June 28, 2008, Ingles operated 197 stores and 52 fuel centers compared to 196 stores and 42 fuel centers at June 30, 2007.

Ingles Markets operates 196 supermarkets. In conjunction with its supermarket operations, the Company also operates 73 neighborhood shopping centers, all but 16 of which contain an Ingles supermarket.