ASHEVILLE, N.C. -- Stock in Ingles Markets here will continue to trade on the Nasdaq exchange provided the retailer here makes timely filings with the Securities and Exchange Commission through the end of the year and supplies Nasdaq with additional information regarding the SEC's informal inquiry into its accounting practices, Ingles said.
The 195-store chain had received notice of potential delisting from Nasdaq due to Ingles' failure to file various forms with the SEC by specified deadlines. The delays in filing came after the SEC made an informal inquiry into Ingles' accounting practices in December, forcing the retailer to re-state prior earnings. In a conference call discussing first-quarter results, Brenda Tudor, chief financial officer, Ingles, said Nasdaq agreed to continue listing the stock on the condition that Ingles files its 10-Q form for its fiscal first quarter by March 31 -- which it did -- and makes timely filings through Dec. 31. In addition, the company must supply Nasdaq with information regarding the SEC inquiry.
Ingles said first-quarter sales increased 4.7% to $559 million, and comparable sales also increased by 4.7%. These gains, on top of a 6.3% sales climb during the same period last year, were sparked by higher perishable sales and customer loyalty gained by Ingles' frequent shopper card, Tudor said. Competitors' struggles, including some store closures, during the period also contributed to the strong results.
"We've seen increases wherever [competitors] have closed," said Jim Lanning, Ingles' president, in the conference call. Two Winn-Dixie closings and a Harris Teeter closing benefited Ingles during the period, added Tom Outlaw, Ingles' vice president of sales and marketing.
Earnings climbed 110.7% to $5.1 million, or 21 cents a share, compared with last year's first quarter, and gross profit increased 6.5%, driven by increased sales in perishables.
Robert Ingles, chief executive officer, said Ingles is "seeing a tremendous demand for real estate," resulting in higher prices for new facilities as well as opportunities for Ingles to sell some of its shopping centers. Ingles said it was considering selling nine properties in the Atlanta area. "Sometimes the real estate becomes more powerful than the retail grocery store, so we might do some changing there," he said.
Tudor told analysts it was "disheartening" that rating agency Moody's placed ratings on Ingles' debt under review for a possible downgrade in January as the company faced the SEC inquiry and delisting questions.
Ingles said it is interviewing candidates to replace Tudor, who announced earlier this month that she would resign.
