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    Ingles Posts Higher Q2, 6-Month Sales, But Net Income Falls

    Ingles Markets, Inc. yesterday reported that its sales rose to $789.2 million and $1.59 billion for the three and six months ended March 28, 2009. Net income came to $7.8 million and $18.9 million for the respective three- and six-month periods, and was lower than the prior-year periods because of higher costs related to the grocer’s recent accelerated store development and slower ramp-up in profitability of new stores during the economic recession.

    Ingles Markets, Inc. yesterday reported that its sales rose to $789.2 million and $1.59 billion for the three and six months ended March 28, 2009. Net income came to $7.8 million and $18.9 million for the respective three- and six-month periods, and was lower than the prior-year periods because of higher costs related to the grocer’s recent accelerated store development and slower ramp-up in profitability of new stores during the economic recession.

    “We believe our accelerated store development program will put us in a good market position when the economy improves,” said Robert P. Ingle, CEO of Asheville, N.C.-based Ingles. “We expect sales and profitability to improve in the new stores as the economy improves, and will benefit our future earnings.”

    Net sales grew by $6.4 million to $789.2 million for the three months ended March 28, from $782.8 million for the year-ago period. Sales increased in each major product category except for gasoline and fluid dairy, where gallons sold increased but the average sales price per gallon was substantially lower during the March 2009 quarter vs. last year. Sales comparisons were also affected by the timing of the Easter holiday, which was in the company’s second quarter of fiscal 2008, but will occur in its third quarter of fiscal 2009. Excluding gasoline sales and the effect of additional Easter sales in fiscal 2008, grocery segment comps increased 4.9 percent for the three months ended March 28, 2009, compared with the year-ago period.

    Mainly due to higher expenses associated with stepped-up store development activity, net income fell to $7.8 million for the three-month period ended March 28, compared with $13.0 million for the year-ago period. Net income, as a percentage of sales, was 1.0 percent for the March 2009 quarter vs. 1.7 percent for the March 2008 quarter.

    Net sales went up by $34.1 million to $1.59 billion for the six months ended March 28, 2009, from $1.56 billion in the year-ago period. Sales grew in each major product category except for gasoline and fluid dairy, where gallons sold increased but the average sales price per gallon was substantially lower during the first half of fiscal year 2009 quarter vs. last year. Excluding gas sales and the effect of additional Easter sales in fiscal 2008, grocery segment comps sales increased 5.0 percent for the six months ended March 28, 2009, compared with the year-ago period.

    Net income was $18.9 million for the six-month period ended March 28, 2009, vs. $25.6 million for the six-month period ended March 29, 2008. Net income, as a percentage of sales, was 1.2 percent for the first half of fiscal year 2009 quarter, compared with 1.7 percent in the year-ago period.

    During the March 2009 six-month period, Ingles completed three new stores, two replacement stores and one remodeled store, as well as adding nine fuel centers. All of these projects were begun during the previous fiscal year. Cap ex for the March 2009 six-month period came $103.7 million. For the rest of the fiscal year, Ingles plans to open four new, replacement or remodeled stores, and add four new fuel stations. Citing current economic conditions, the grocer has scaled back its development activities. Cap ex for the whole fiscal year is expected to be about $150 million, including stores slated to open in fiscal 2010.

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