First-half sales up at Ingles Markets

A second-quarter gain helped drive solid sales growth in the first half at Ingles Markets, which at the bottom line cycled through a prior-year benefit from federal tax reform.

Ingles said Wednesday that net sales totaled just over $1 billion for the quarter ended March 30, up 1.8% from $984.6 million a year earlier.

Retail grocery comparable-store sales, which exclude fuel, rose 3.4% and reflect increases in customer transactions and basket size, the Asheville, N.C.-based grocer said. Comp-store results also exclude the impact of the calendar shift for Easter, which this year occurred in April and will provide a lift in the third quarter, whereas last year the holiday took place in March and benefited second-quarter results, the retailer noted.

Gross profit came in at $244.3 million, up 3.9% year over year from $235.2 million. As a percentage of sales, gross profit was 24.4% in the 2019 quarter versus 23.9% a year ago.

Ingles posted second-quarter net earnings of $15 million, compared with $9.3 million in the prior-year period. Earnings per share (EPS) for Class A common stock was 76 cents (74 cents diluted) in the 2019 quarter versus 47 cents (46 cents diluted) a year earlier. The company’s Class B common stock had basic and diluted EPS of 69 cents, up from 43 cents in the 2018 period.

Related:Ingles Markets sees year-end gains

“We are pleased with this year’s sales growth brought about by the hard work of our associates,” Chairman Robert Ingle said in a statement. “We continue to make investments in our company that will benefit many future periods.”

In the 2019 first half, Ingles saw net sales rise 3.3% to $2.06 billion from $2 billion a year ago. Comp-store sales climbed 3.8%, excluding gasoline and the impact of the Easter calendar shift, as customer transaction count and size grew during the period.

Gross profit for the six months increased 4.8% to $502.7 million and was 24.4% as a percentage of sales, up from 24% for the 2018 first half.

Net income totaled $37.2 million versus $54.4 million in the 2018 period, which included a $26.7 million deferred tax benefit from federal tax reform. EPS for Class A common stock was $1.88 ($1.83 diluted) in the 2019 half compared with $2.76 cents ($2.69 diluted) a year ago. Ingles’ Class B common stock had basic and diluted EPS of $1.71 cents versus $2.51 in the 2018 period.

As of March 30, Ingles operated 198 supermarkets in North and South Carolina, Georgia, Tennessee, Alabama and Virginia, compared with 201 a year earlier. The company said that, during the 2019 quarter, it sold a former store property for a $3.2 million gain and recognized a $1.4 million reserve for a closed leased store.

Capital expenditures for the 2019 first half were $94.2 million, up from $88.8 million in the prior-year period, and are projected at $140 million to $180 million for the full fiscal year. Ingles said its capital spending includes stores scheduled to open later this year.