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Ingles Feels Effects of Gas Prices, Refinancing Costs in Q1
Sales and comps rise on higher rings. Sales and comps increased on higher rings and a small increase in traffic during the holiday period.
1 Min Read
Sales and comps increased on higher rings and a small increase in traffic during the holiday period.Photograph by WGB staff
Falling gasoline prices and expenses associated with a debt payoff helped to trigger a decrease in net earnings for Ingles Markets during its fiscal first quarter, despite overall increases in sales and comps during the holiday season.
Asheville, N.C.-based Ingles, which operates 198 stores in the Southeast, reported a 1.6% sales increase on $1.08 billion in the quarter, which ended Dec. 28. Comps, excluding gasoline, increased by 2.4%, reflecting an average basket increase of 2.3% and a 0.2% increase in visits.
“We were pleased with our sales growth during the important holiday period. We completed a successful long-term financing that will lower our interest cost for many years to come,” said Robert P. Ingle II, chairman of the company, in a statement.
Net income for the quarter totaled $17.7 million, down by 20.3% as compared the same period last year. Ingles said lower profits and gasoline sales, which had lower per-gallon prices in the quarter than the same period a year ago, contributed to the profit erosion, as did $3.7 million in expenses associated with a debt refinancing. That event refinanced $155 million of 5.75% debt with 10-year fixed-rate secured debt at 2.95%.
Total debt at the end of the quarter totaled $850 million. Diluted earnings per share for the company’s publicly traded Class A stock was 87 cents, down from $1.09 a year ago.
Ingles stock, which is typically lightly traded, is down by more than 24% year to date.
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