ASHEVILLE, N.C. — Saying the consumer was “feeling better,” Ingles Markets saw an increase in sales and margins in the third quarter, but charges associated with the early extinguishment of debt triggered a quarterly loss.
Ingles in June issued new notes to repay debt issued at a higher interest rate, triggering $43.1 million in prepayment penalties. That contributed to a loss of $14.4 million in the quarter, but secured substantial savings on interest payments in coming years.
Read more: Moody's Assigns Rating to Ingles Notes
Sales for the period, which ended June 29, increased by 1.5% to $931.9 million, and comparable-store sales, excluding gasoline, increased by 1.4%. Gross margin as a percent of sales rose 20 basis points to 22.6%, which officials said reflected improved consumer sentiment leading to a more profitable sales mix.
“I think the consumer is feeling better, and that’s reflected in greater purchases of some higher-margin products, and we hope that trend continues,” Ron Freeman, Ingles’ chief financial officer said in a conference call discussing results.
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