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ASHEVILLE, N.C. -- Regional chain Ingles Markets, Inc. here said yesterday its third-quarter net income jumped 108.9 percent, from $6.6 million to $13.8 million. The company cited broad-based sales increases and cost efficiencies for the healthy profit performance.
Net sales for the quarter ended June 24 increased 16.3 percent to $659.2 million over the year ago period, while comparable grocery store sales grew 15.2 percent over the same period. Ingles said Easter sales occurred in the latest quarter, but in the previous quarter in fiscal 2005.
"Our good results are sales driven," said c.e.o. Robert P. Ingle in a statement. "We've had successful promotions, improved our store base, and offered both convenience and value to our customers. Our customer visits are up, and they're purchasing more each visit than they did last year. This growth also allows us to spread fixed expenses over more sales dollars to the benefit of our customers and shareholders."
For the nine months ended June 24, Ingles' net income increased 80.9 percent, from $17.2 million to $31.1 million. Net sales increased 12.2 percent over the 2005 period to $1.89 billion, while comparable grocery store sales grew 11 percent.
Excluding high-dollar, lower-margin gasoline sales, comps grew 10.2 percent for the quarter and 7.7 percent for the nine-month period.
Despite the robust performance, Ingles said gross profit, as a percentage of sales, decreased to 24.8 percent for the third quarter, compared to 25.3 percent for the same quarter last year. For the nine-month period, gross profit as a percentage of sales decreased to 24.9 percent in 2006 compared to 25.4 percent in 2005. The retailer blamed lower overall margins in the gasoline department as the primary contributor to the decrease. Excluding the effect of gasoline sales, retail grocery segment gross margins for the fiscal 2006 three- and nine-month periods were within 50 basis points of such margins for the same periods of 2005.
Ingles operated 197 stores at the end of June 2006, compared to 195 stores at the end of June 2005. During the June 2006 nine-month period, Ingles completed one new store and three replacement stores, closed one store, and purchased seven future store sites. Including additions at new or replacement stores, the company added eight fuel stations and three pharmacies.
For the balance of the fiscal year, Ingles expects to open one remodeled store, purchase three sites for future expansion, and add four new fuel stations and a pharmacy to existing store properties. Capital expenditures for the entire fiscal year are expected to be approximately $90 million, including expenditures for stores to open in fiscal 2007.