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Tough economic conditions led to a lower net income, however Ingles Markets, Inc. yesterday reported an overall increase in sales of 3.6 percent to $804.9 million for its first fiscal quarter ended Dec. 27, 2008. For the quarter, net income came to $11.1 million, vs. net income of $12.7 million for the year-ago period.
"We had a good holiday season for sales, but difficult economic conditions are having an effect on our operations," noted CEO Robert P. Ingle.
Comparable-store sales grew $35.0 million, or 5.4 percent, excluding gasoline sales. Grocery segment sales increased in each product category except for gasoline. Both average weekly customer visits and the average purchase amount (excluding gasoline) rose over the comparative first quarters. Gasoline sales increased in gallons, but the average sales price per gallon was considerably lower during the current fiscal quarter than it was during the same quarter of last fiscal year. Comps growth excluding gasoline wasn't as strong as in the grocer’s recent experience, because of the economic recession and its impact on consumer spending.
Gross profit for the first quarter of fiscal 2009 went up 9.1 percent to $197.1 million, an increase of $16.4 million vs. last year. Gross profit as a percentage of sales rose to 24.5 precent for the first quarter of fiscal 2009, compared with 23.3 percent in the year-ago period. Excluding lower-margin gasoline sales, grocery segment gross profit as a percentage of sales was flat, 26.5 percent in the first quarter of fiscal 2009, vs. 26.4 percent last year.
Total operating expenses were $167.9 million for quarter, compared with $150.3 million for the comparable fiscal 2008 quarter. Ingles attributed the growth in operating expenses in part to 11 store openings or remodels in the past nine months, resulting in higher personnel costs, depreciation, and supporting costs such as distribution, energy and supply expenses. Increases in these line items accounted for about 85 percent of the growth in operating expenses for the comparative first quarters. As a percentage of sales, operating and administrative expenses were 20.9 percent and 19.4 percent for the quarters ended Dec. 27, 2008 and Dec. 29, 2007, respectively.
Cap ex was $60.2 million for the quarter, during which Ingles opened two new stores, one replacement store and added five fuel centers. For the rest of the fiscal year, the company plans to open nine new, replacement or remodeled stores and add approximately four new fuel stations at either new or existing stores.
Asheville, N.C.-based Ingles operates 199 supermarkets in six southeastern states. The company also operates 73 neighborhood shopping centers, all but 16 of which include an Ingles supermarket.