ASHEVILLE, N.C. — Higher expenses for new store development and charges associated with retiring debt sent net profits at Ingles Markets down by 50.4% during the fiscal fourth quarter that ended Sept. 26, the retailer here said Monday.
Net profits of $28.8 million for the fiscal year fell by 44.7%, mainly as a result of higher expenses as a percent of revenue for Ingles, which said it was affected by a slower ramp-up of some of the 22 new stores it has opened or remodeled since 2008.
“In a recession it’s just taking a little bit longer for the sales volume [of new stores] to catch up to the level we want it to bring the operating expense leverage number down a little bit,” Ronald Freeman, chief financial officer of Ingles, said in a conference call.
Ingles said increases in store traffic helped bring same-store sales up by 2.4% in the quarter, excluding gasoline sales. Overall quarterly sales of $830.1 million fell by 1.5% due mainly to a sharp decrease in gasoline prices. Quarterly net income totaled $5.2 million.
In addition to higher expenses, Ingles noted its quarterly and full-year income results were affected by an income reduction of $10.2 million associated with pre-payment penalties and loan cost write-offs associated with a new financing package.
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