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    Ingles Posts 47th Consecutive Year of Higher Sales

    Southeast grocer also reported sales, net income growth for Q4, FY 2011

    Ingles Markets Inc. has reported record fiscal 2011 sales of $3.56 billion -- its 47th straight year of sales growth. Fourth-quarter sales increased 5.8 percent to $905.8 million and net income rose 33.1 percent to $11.0 million, versus the year-ago period. Net income for the fiscal year ended Sept. 24 grew 26.6 percent to $39.1 million compared with $30.8 million last year.

    Grocery segment comparable-store sales, excluding gasoline, edged up 2.2 percent for the fourth quarter and 2.3 percent for the full 2011 fiscal year, respectively, over the fourth quarter of fiscal 2010 and for the full 2010 fiscal year amounts.

    “We are proud of both increased sales and profits, reflecting a fitting tribute to the way my father built and ran this company,” noted CEO Robert P. Ingle II. “We have a great group of managers and associates that continue to drive excellent results.”

    Net sales went up 5.8 percent to $905.8 million for the quarter ended Sept. 24, versus $856.0 million for year-ago period. Grocery segment comps, excluding gas sales, rose 2.2 percent compared with last year. Ingles attributed the growth in comps to increases in average weekly customer visits and in the average purchase amount compared with the fourth quarter of fiscal 2010. The southeastern grocer explained that total and comparable-store sales comparisons are affected by retail gas prices, which were about 37 percent higher during the fourth fiscal quarter of 2011 compared with the prior year.

    Gross profit for the fourth quarter of fiscal 2011 came to $202.4 million, an increase of $7.5 million compared with the year-ago period. Gross profit as a percentage of sales was 22.4 percent for the fourth quarter of fiscal 2011, compared with 22.8 percent last year. Grocery segment gross margins, excluding gas, increased to 26.0 percent for the current-year quarter from 25.7 percent for the year-ago period.

    Operating and administrative expenses for the September 2011 quarter totaled $172.3 million, an increase of $5.2 million, or 3.1 percent, over the September 2010 quarter. Operating and administrative expenses as a percentage of sales were 19.0 percent for the fourth quarter of fiscal 2011, versus 19.5 percent for the year-ago period. The largest line-item increases were personnel costs, repairs and maintenance, and insurance, according to Ingles, which added that all of these cost increases were associated with an increase in the number of stores and retail square footage. Ingles operated 203 stores and 11.0 million square feet of store space at the end of fiscal 2011, compared with 202 stores and 10.8 million square feet at the close of fiscal 2010.

    Net income for the September 2011 quarter rose to $11.0 million, versus $8.2 million for the year-ago period. Basic and diluted earnings per share for the grocer’s publicly traded Class A common stock were 47 cents and 45 cents per share, respectively, for the September 2011 quarter, compared with 35 cents and 34 cents per share, respectively, last year.

    Net sales were a record $3.56 billion for the fiscal year ended September 2011, an increase of $169.9 million, or 5.0 percent, from $3.39 billion for the fiscal year ended September 2010. Grocery segment comps rose 2.3 percent, excluding gas sales where the retail-per-gallon price was about 27 percent higher. The number of customer transactions increased 0.4 percent and the average transaction size grew by 55 cents, excluding gas sales.

    Gross profit for the fiscal year ended Sept. 24 increased $29.0 million, or 3.8 percent, to $791.9 million, or 22.2 percent of sales, compared with $762.9 million, or 22.5 percent of sales, in the year-ago period. Ingles noted that this increase was primarily because of  higher sales volume. Grocery segment gross profit as a percentage of total sales, excluding gas, rose to 25.8 percent for fiscal 2011, versus 25.5 percent for the comparable fiscal 2010 period. Ingles’ response to the current competitive environment has been to keep prices as low as possible to boost sales and market share. Comparative grocery gross margins were also affected by inflationary pressure on certain items and changes in sales mix among product categories, the company noted, adding that as none of these factors was predominant, the result was modest gross margin growth.

    Operating expenses rose $22.7 million in fiscal 2011 from fiscal 2010, and were 19.0 percent of sales for fiscal 2011, compared with 19.3 percent of sales for the prior year. Excluding gas sales and associated gas operating expenses (mainly payroll), operating expenses were 22.1 percent of sales for fiscal 2011, versus 22.0% for fiscal 2010. The grocer pointed out, that as in its fourth quarter, cost increases were associated with an increase in the number of stores and retail square footage. According to Ingles, the biggest cost increases were personnel, insurance, and bank charges.

    Capital expenditures came to $97.5 million and $92.0 million for fiscal 2011 and 2010, respectively. During fiscal 2011, Ingles opened four new, replacement or remodeled stores. The grocer additionally embarked on construction of a new distribution facility anticipated to open during 2012.

    Asheville, N.C.-based Ingles operates 203 supermarkets, as well as 70 neighborhood shopping centers, all but 12 of which contain an Ingles supermarket.
     

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