Ingles Markets keeps sales on the upswing in Q1

Ingles Markets upheld the sales growth momentum from its recently completed fiscal year with gains in its 2020 first quarter.

For the three months ended Dec. 28, net sales totaled $1.08 billion, up 1.6% from $1.06 billion a year earlier, Asheville, N.C.-based Ingles said yesterday. Same-store sales climbed 2.4% year over year, excluding fuel.

Ingles’ fiscal 2019 sales grew 2.7% to $4.2 billion, with comparable-store sales excluding gasoline up 3.9% from the previous year.

In the 2020 first quarter, operating income came in at $38.5 million, down from $39.5 million a year ago. Gross profit was $257.5 million (23.9% of sales), compared with $258.4 million (24.3% of sales) in the prior-year period. Ingles noted that the results reflect “unusually high” gross profit for fuel industrywide in the 2018 quarter.

Ingles tallied $222 million in operating and administrative expenses for the 2020 quarter versus $218.7 million a year earlier. The grocer said the increase stems mainly from higher personnel costs, reflecting rising sales and continued strong demand for labor.

First-quarter 2020 net earnings were $17.7 million compared with $22.2 million in the year-ago period. Ingles said the decrease reflects $3.7 million of refinancing costs that will pare interest expense for future periods.

Related:Ingles Markets finishes fiscal year on positive note

On a per-share basis, Ingles reported net income of 90 cents (basic) and 87 cents (diluted) for its publicly traded Class A common stock, down from $1.12 (basic) and $1.09 (diluted) in the fiscal 2018 quarter.

“We were pleased with our sales growth during the important holiday period,” Ingles Markets Chairman Robert Ingle II said in a statement. “We completed a successful long-term financing that will lower our interest cost for many years to come.”

During the first quarter, $155 million of 5.75% debt was refinanced with 10-year, fixed-rate secured debt at 2.95%, according to Ingles. Total debt declined to $850 million at the end of the quarter from $880 million a year earlier. Interest expense came in at $11.9 million in the 2020 quarter, down from $12.2 million in the prior-year period.

Ingles closed out the first quarter with 198 supermarkets in the Carolinas, Georgia, Tennessee, Alabama and Virginia, compared with 200 a year ago. The company said it totaled capital expenditures of $31.1 million versus $71 million in the 2019 quarter, which included additional new store construction, store remodeling and property acquisitions. Overall fiscal 2020 capital spending is projected at $120 million to $160 million.

Related:Third-quarter sales edge up at Ingles Markets