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Ingles Markets Inc. today announced increased sales and earnings for the third quarter ended June 30, 2001.
Net sales rose 3.3% to $484.7 million for the June 2001 quarter compared with $469.4 million for the June 2000 quarter, while comparable store sales increased 2.2% for the same period. Gross profit increased 4.9% for the June 2001 quarter to 26.5% of sales compared with 26.1% of sales for the June 2000 quarter. Net income for the June 2001 quarter grew 5.7% to $5.9 million, or $0.26 per diluted share compared with $5.6 million, or $0.25 per diluted share for the June 2000 quarter.
During the June 2001 quarter, Ingles opened three replacement stores, completed one major remodel/expansion, completed four minor remodels and sold one older store.
Net sales for the nine months ended June 30, 2001, rose 4.4% to $1.465 billion compared with $1.403 billion for the fiscal 2000 nine-month period. Comparable store sales grew 3.8% for the same period. Gross profit increased 6.7% for the June 2001 nine-month period to 26.1% of sales compared with 25.6% of sales in the June 2000 nine-month period. However, net income declined 20.0% during the June 2001 nine-month period to $13.5 million, or $0.60 per diluted share compared with $16.9 million, or $0.75 per diluted share, for the June 2000 nine-month period. The decline is due primarily to a decrease in gains on the sale of assets, a decrease in miscellaneous other income and increased interest expense to fund capital expenditures.
For the balance of the fiscal year, Ingles plans to open two new stores, one replacement store, complete the major remodel/expansion of one store and close four older stores.
Commenting on the results, Robert P. Ingle, chairman and chief executive officer, said, "Our pattern of sales and gross margin growth was sustained into our third quarter due to the efforts of our management team coupled with the renovation of our existing store base.
"Operating costs increased primarily due to rising health care costs, equipment rent for the new and renovated stores, increased utilities costs and higher labor costs. We are pleased that the growth of labor costs for the June 2001 quarter slowed to 4.5% compared with 7.9% for the June 2001 nine-month period. Decreases, as a percentage of sales, in advertising, repairs and maintenance, and warehousing expense helped to offset the increased operating costs. We continue to search for ways to operate
more efficiently, such as the installation of security systems in approximately one-half of our stores and the installation of self-checkout systems in 15 stores. We plan to include security systems and self-checkout systems in all new and remodeled stores.
"During the June 2001 quarter, gains on sales of approximately $1.3 million from the sale of land adjacent to an existing store and the sale of an older leased store to another supermarket chain contributed to the bottom line. The decline in interest rates was also a boost to the bottom line for the quarter.
"We are continuing with our plans to offer customers a one-stop shopping experience through the remodeling and expansion of existing stores and through the addition of departments and services. In September 2000, we opened our first gas station adjacent to a store; and we currently operate four gas stations. We plan to add approximately 15 gas stations over the next year. In July 2000, we opened our first company-owned, in-store pharmacy and are now operating 11 pharmacies. We plan to evaluate the inclusion of pharmacies in new and remodeled locations going forward.
"Our plans are for growth in our existing market area through the expansion and renovation of existing locations as well as strategically selected new sites. We strive
to maintain and grow market share through offering customers a one-stop shopping experience in a state-of-the-art store."