BLACK MOUNTAIN, N.C. -- Higher interest expenses resulted in decreased net income for Ingles Markets here in the second quarter and first half ended March 25, the company said.
That decline broke an eight-quarter string of higher net income results.
Net income for the three months fell 43.5%, from $3.9 million to $2.2 million. Net income for the six months dropped 45.4%, from $11 million to $6 million.
Net sales increased 8.8%, from $301.5 million to $327.9 million, in the quarter. For the six months, net sales rose 9.8%, from $599.4 million to $658.2 million.
Ingles' interest expenses rose from $4.3 million to $5.9 million for the quarter -- a 37.2% increase. Interest expenses for the half rose from $8.6 million to $11 million -- a 27.9% increase.
The company increased its debt load in fiscal 1995 to fund its aggressive expansion plans, thus resulting in higher interest expenses. Climbing interest rates also contributed to the increased expense.
"In the past six months, we have pursued a very aggressive new store opening, expansion, remodel and/or replacement program," said Robert P. Ingle, chairman of Ingles Markets, in a statement. "This year's second quarter, in particular, was impacted by our investment in building our store base for long-term growth."
Since the beginning of the fiscal year, the chain has opened six new stores, replaced eight stores and expanded its warehouse, equaling capital expenditures of some $60.9 million.