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Perishables Lead Growth at Ingles Markets for Q2

ASHEVILLE, N.C -- Perishables, pharmacy, and gasoline drove sales growth for regional supermarket chain Ingles Markets, Inc., based here, in the quarter ended March 26.

"We continue to be pleased with the success of our operations," said, Robert P. Ingle, the Ingles' c.e.o. "Our sales growth remains strong despite a two-store decrease in store count. We remain focused on keeping our stores modern and offering the products and conveniences our customers deserve. We are particularly pleased with the growth in our perishables departments. Our sales growth continues to fuel a strong increase in earnings, year over year."

Adjusting for the effect of Easter sales -- which occurred in the fiscal 2005 quarter but in later in fiscal 2004 -- net sales for the March 2005 quarter increased 7 percent over the same period in 2004, while comparable store sales grew 6.3 percent. For the six months ended March 26, net sales increased 5.8 percent, while comparable store sales grew 5.6 percent.

Gross profit for the quarter increased 3.5 percent. Gross profit, as a percentage of sales, was 25.5 percent for the quarter, compared to 26.3 percent for the same quarter last year, due to increased promotional efforts during the quarter and the effect of lower margins in the pharmacy and gasoline departments.

Gross profit dollars for the six-month period increased 5 percent over the same period of fiscal 2004. Gross profit as a percentage of sales was 25.4 percent vs. 25.6 percent.

Net income for the quarter totaled $5.5 million, or 23 cents per share, compared to $7.2 million, or 31 cents. Net income for the six months increased to $10.5 million, or 44 cents per share, compared to $9.6 million, or 42 cents.

During the latest six-month period, Ingles opened one new store, completed one major remodel/expansion, purchased three future store sites, and closed two stores. Capital expenditures for the six-month period totaled $26.8 million. For the balance of the fiscal year, Ingles expects to open three new stores, complete one major remodel/expansion, add seven new fuel stations, and purchase one store site. Capital expenditures for the fiscal year are expected to be approximately $70 million, including expenditures for stores to open in fiscal 2006.

Ingles operates 195 locations in six Southeastern states.
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