Ingles Markets adds to pandemic-driven sales gains in third quarter

Ingles Markets stayed on the growth track in its fiscal 2021 third quarter with sales gains on top of last year’s pandemic-fueled surge.

For the quarter ended June 26, net sales came in at $1.28 billion, up 7.4% from $1.19 billion a year earlier, Ingles said Thursday. The Asheville, N.C.-based grocer had posted a 12% year-over-year increase in its fiscal 2020 third quarter, which included a boom in consumer demand for groceries and essential items during the early weeks of the COVID-19 outbreak.

On a comparable basis, total grocery sales excluding fuel dipped 0.5% year over year in the third quarter but were up 23% on a two-year stack, Ingles reported in its 10-Q filing with the Securities and Exchange Commission. The company said gasoline sales were higher in the 2021 quarter versus a year ago due to increased travel as pandemic restrictions have relaxed. Total grocery comp-store store sales, excluding fuel, decreased 0.9% year over year, with the transaction count up 8.2% and average basket size down 8%.

"We believe that easing of the COVID-19 pandemic restrictions has resulted in more trips to our stores at a lower transaction size, even as dollar sales were somewhat level," Ingles said in the SEC filing.

Year-to-date, Ingles' top line climbed 7% to $3.65 billion from net sales of $3.41 billion in the nine-month period in 2020. Comp-store sales rose 5.2% for the nine months.

Related:Sales growth at Ingles Markets moderates in Q2

“We continue to respond well to ongoing challenges with labor supply, as well as some disruptions to product availability and distribution,” Ingles Markets Chairman Robert Ingle said in a statement. “We appreciate the hard work and dedication of our associates to maintain high levels of customer service in the face of these challenges.”

At the bottom line, Ingles generated third-quarter net income of $72 million, up 14.7% from $62.8 million a year ago, when net earnings more than doubled. Basic and diluted earnings per share (EPS) for Class A common stock were $3.88 and $3.79, respectively, versus $3.18 and $3.10 in the prior-year period. EPS (basic and diluted) for Class B common stock were $3.52 at the quarter’s end, up from $2.89 a year earlier.

Ingles’ net earnings over the first nine months of fiscal 2021 were $178 million, a gain of 47.4% from $120.7 million in the 2020 period, when net income nearly doubled. Basic and diluted EPS for Class A Common Stock were $9.22 and $8.98, respectively, compared with $6.13 and $5.96 a year ago. For Class B common stock, EPS (basic and diluted) were $8.38 versus $5.57 a year earlier.

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Capital expenditures in the nine months totaled $108 million, up from $78.9 million a year ago, and focused on current and upcoming stores, as well as ongoing improvements, Ingles said. The company projects capital spending of $120 million to $140 million for fiscal 2021.

Ingles closed out the third quarter with 198 supermarkets in North Carolina, South Carolina, Georgia, Tennessee, Alabama and Virginia, compared with 197 a year earlier.

*EDITOR'S NOTE: Article updated with comparable sales information.