Ingles Posts Q4 Gains, Plans Special Dividend

ASHEVILLE, N.C. – Ingles Markets here on Friday said net earnings and sales increased during the fiscal fourth quarter and year that ended Sept. 29.

In addition, Ingles said it would accelerate its quarterly dividend payment and pay a special dividend of 66 cents per share to Class A shareholders and 60 cents per share to Class B shareholders. The regular quarterly dividend is 16.5 cents per share for Class A shares and 15 cents for Class B.

Sales for the 14-week quarter totaled $991.8 million, a 9.5% increase from a 13-week quarter in 2011. Same-store sales for comparable 14-week period increased by 2%. Quarterly net income rose 21.1% to $13.3 million.

Ronald Freeman, chief financial officer for Ingles, in a conference call said sales rose as a result of increases in customer visits and average sales per transaction.

Gross profits decreased 20 basis points to 22.2% of sales, reflecting lower gas prices.  Excluding gasoline sales, gross profit margin was 26.1% of sales, flat with the same period a year ago.

“Competition was intense and our customers are still facing difficulties, so we’re pleased with our increased sales and profits,” Freeman said.

Freeman said Ingles would reduce capital expenditures from around $180 million in 2012 to a range of $100 million to $130 million in 2013, with the majority to be spent on stores.

The higher expenses in 2012 reflected costs to complete construction of a new 839,000-square-foot distribution center, now fully operational. Freeman said the project would deliver a full year of benefits in 2013 including reduced distribution costs and buying efficiencies.

Read more: Q3 Sales, Profits Rise at Ingles

“Suffice it to say, we’re happy the facility is opened, we’re very pleased with the performance of it so far and we absolutely expect it to continue,” Freeman said.

Asked whether Ingles would consider spinning off its real estate holdings in a real estate investment trust – as Loblaw just announced it would do in 2013, citing among other reasons easier access to capital – Freeman said the retailer would consider it but declined to discuss it further.

For the fiscal year, Ingles reported earnings of $43.4 million on sales of $3.7 billion. Sales increased by 3.9% over 2011 and same-store sales for 53 weeks increased  1.9%. Net income increased by 11.2%.