Ingles Posts Higher Q2 Sales, Net Income

Ingles Markets Inc. has reported increased sales and net income for the three months ended March 26, compared with the year-ago period. Net income came to $14.4 million for the quarter ended March 26, versus $14.3 million for the second quarter of fiscal year 2015. Net sales also rose, despite significantly lower retail gasoline prices compared with last year.

For the six months ended March 26, net income was $27.3 million, versus $29.3 million for the year-ago period. Gasoline gross profits were considerably higher during the fiscal 2015 six-month period than during the current fiscal six-month period, according to Ingles.

The three- and six-month periods ended March 2016 benefited from extra Easter sales, the company said, noting that in 2016, Easter occurred in March, but didn’t occur until the third quarter of last fiscal year.

Robert P. Ingle II, chairman of the board, observed that the southeast regional grocery store chain’s second-quarter sales growth “helped our net income for the quarter.”

Q2 Results

Ingles’ net sales grew $9 million, or 1 percent, to $924.3 million for the three months ended March 26, from $915.3 million last year. Lower gasoline sales were offset by higher sales in other products and by the positive effect of Easter sales, according to the company. Excluding gas sales and the effect of extra Easter sales, retail grocery comparable-store sales rose 1.6 percent over the comparative fiscal second quarters.

Gross profit for the March 2016 quarter increased 4.6 percent to $228.7 million, versus $218.7 million for the year-ago period, while gross profit as a percentage of sales was 24.7 percent for the March 2016 quarter, compared with 23.9 percent last year. Excluding gas sales, retail grocery gross margin rose 23 basis points from the March 2015 fiscal quarter.

Net income as a percentage of sales was 1.6 percent for both the March 2016 and March 2015 quarters. Basic and diluted earnings per share for Class A Common Stock were 73 cents and 71 cents, respectively, for the quarter ended March 26, compared with 72 cents and 71 cents, respectively, for year-ago period. Basic and diluted earnings per share for Class B Common Stock were each 66 cents for the March 2016 and March 2016 quarters.

First-half Results

First-half fiscal 2016 and 2015 sales each came to $1.88 billion, according to Ingles, whose retail grocery comps, excluding the effect of gasoline and extra Easter sales, inched up 1.5 percent.

Gross profit for the six months ended March 26 climbed 2.5 percent and totaled $454.4 million, compared with $443.1 million for the year-ago period. Gross profit as a percentage of sales was 24.2 percent for the March 2016 six-month period, versus 23.6 percent for the March 2015 six-month period. Retail grocery segment gross profit as a percentage of sales, excluding gas sales, grew eight basis points from the first half of fiscal 2015 to the first half of fiscal 2016.

Net income came to $27.3 million for the six-month period ended March 26, compared with $29.3 million last year. Net income as a percentage of sales was 1.5 percent for the six months ended March 26, versus 1.6 percent for the year-ago period. Basic and diluted earnings per share for Class A Common Stock were $1.39 and $1.35, respectively, for the six months ended March 26, compared with $1.49 and $1.45, respectively, for the six months ended March 28, 2015. Basic and diluted earnings per share for Class B Common Stock were each $1.26 for the six months ended March 26, 2016, versus $1.36 last year.

Capital expenditures for the March 2016 six-month period came to $71.2 million, compared with $44.3 million for the year-ago period. Ingles noted that its higher cap ex this year is focused on stores slated to open later in 2016, as well as on continuing improvements to existing stores. The grocer expects its cap ex for the entire fiscal year to be about $125 million to $145 million.

Asheville, N.C.-based Ingles operates 202 supermarkets, as well as neighborhood shopping centers, most of which contain an Ingles supermarket. The company also owns a fluid dairy facility that supplies its own supermarkets and unaffiliated customers.