Despite strong sales in core grocery products, Ingles Markets on Thursday said overall sales declined as a result of a significantly lower gas prices in the fourth quarter.
Higher expenses including lapping a one-time tax benefit in the year-ago period in the meantime triggered a 8% decline in net earnings, the Asheville, N.C., retailer said.
For the period, which ended Sept. 26, sales totaled $952.8 million, a 1.2% decline from the same-period last year. Sales excluding gasoline improved by 2.8% and non-fuel comparable-store sales excluding fuel improved by 3.1% in the quarter. Gross profit as a percentage of sales improved to 23.9% from 22.8%, officials said.
Net income for the quarter totaled $16.2 million, down from $17.6 in the fourth quarter last year, which earnings per share increased a penny to 83 cents — the latter as a result of fewer outstanding shares due to company stock repurchases.
Expenses as a percent of sales increased to 20.3% from 19.1% in the same period last year, in part because of higher benefit costs and also because investments in fresh and prepared foods required additional employees and training, CFO Ron Freeman said. The company also saw increased interest expenses and tax rate in the quarter.
Freeman in a conference call discussing results Thursday said Ingles has closed two stores so as to demolish and rebuild them from the ground up as opposed to expanding existing buildings, “a bit of a new thing for us, but that’s our plan.” The rebuilt stores would be around 70,000 square feet and are expected to open next year, Freeman said.
For the fiscal year, sales of $3.78 billion increased 1.8%, and net earnings of $59.4 million improved by 15.6%.
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