ASHEVILLE, N.C. — Rebounding customer spending helped lift Ingles Markets here to a 3.8% sales increase and a 28.3% increase in net income during the fiscal first quarter, the retailer here said last week.
Comparable-store sales excluding gasoline improved by 2.9%, sparking a 4.4% increase in gross profit, while margins improved by 20 basis points to 22.2% of sales, officials said. Total sales for the period, which ended Dec. 25, were $872.8 million. Net earnings were $4.2 million.
Ingles officials said the company was pleased with the success of promotional programs it ran during the competitive holiday season. Shoppers during this period stepped up purchasing behavior, buying higher-ticket items and a heavier mix of perishables than they had over the past two years.
“We had a very good increase in sales for the quarter. People changed a little bit to buy some higher-price products — that hasn't always been the case over the last couple of years,” Ron Freeman, Ingles' chief financial officer, said during a conference call. “People's confidence is ticking up a little, but it's very small steps.”
Freeman said the company was seeing some price increases but would be cautious about passing them along to shoppers.
“We will keep our customer at the forefront of our actions, negotiate the best we can with vendors, watch our competitors and provide good value,” he said.
Bryan Hunt, an analyst following Ingles for Wells Fargo Securities, Charlotte, said it was likely that rising fuel prices also helped Ingles' quarterly sales, by driving consumers to Ingles looking for discounts on gas. The company operates gas stations at 69 of its 203 stores.
“As fuel prices rise, the discounts they provide on fuel bring greater attraction to their strategy,” Hunt told SN. “The combination of the consumer coming back, along with their fuel strategy, can provide some legs to their sales momentum.”
