Ingles Posts Double-Digit Gains

Ingles Markets said a decrease in restaurant dining helped drive sales gains of 13.1% in its fiscal third quarter. Comparable-store sales rose 7.1% when adjusted for the early Easter this year and excluding gasoline, which was a large contributor to total sales gains at the 196-store chain. Ingles added 10 fuel centers since last year and saw a 28% increase in gallons sold, while

ASHEVILLE, N.C. — Ingles Markets here said a decrease in restaurant dining helped drive sales gains of 13.1% in its fiscal third quarter.

Comparable-store sales rose 7.1% when adjusted for the early Easter this year and excluding gasoline, which was a large contributor to total sales gains at the 196-store chain. Ingles added 10 fuel centers since last year and saw a 28% increase in gallons sold, while the price per gallon increased 83 cents.

Customer transactions excluding gasoline increased 8.9%, while the average transaction decreased by 51 cents.

“We believe all of the above factors reflect decreased restaurant dining in favor of our ready-to-eat products and our one-stop strategy,” said Ronald Freeman, chief financial officer, in a conference call with analysts.

He also noted that the company was seeing increased sales of private-label products as a percentage of total sales, after remarking in the second quarter that the chain had experienced no such shift.

Net income for the quarter increased 8.1% when adjusted for one-time gains in the year-ago period, but was down 19.1%, on an absolute basis, to about $16 million. Total sales were $835.3 million.

Through nine months, net income was $41.7 million, down 6.1%, but rose 14.9% when adjusted for one-time items. Sales grew 13.8% year-to-date, to $2.4 billion, and comps grew 8.1%, excluding gas.

Operating expenses were 18.9% of sales for the third quarter vs. 19.2% a year ago, but excluding gasoline sales and associated costs, operating expenses were 22.6% of sales vs. 21.6%.

“Higher energy costs resulted in increased distribution cost, increased store utility cost and increased plastic supplier cost,” Freeman said. “We chose to absorb much of these cost increases in order to minimize the impact of difficult economic conditions on our customers.”