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Ingles Q1 Earnings Up Despite Competition

ASHEVILLE, N.C. — Ingles Markets here on Monday said sales and earnings increased despite a “very competitive” holiday season.

Sales for Ingles’ fiscal first quarter, which ended Dec. 29, totaled $932.8 million, a 1.6% increase from the same period last year. Excluding gasoline, comparable-store sales improved by 1.5%, reflecting an increase in shopping trips and a stable average basket size. Net earnings totaled $11.6 million, a 9.4% increase, helped by higher sales and a 30-basis point improvement in gross profit margin to 22.3% of sales.

Ronald C. Freeman, Ingles’ chief financial officer, in a conference call discussing quarterly results said competition intensified during the holiday season, with more promotions leading to margin pressure. The company also said its fluid dairy segment saw lower sales as a result of higher prices and less overall consumption.

Read more: Ingles Posts Q4 Gains, Plans Special Dividend

Ingles spent $28.1 million in capital expenditures during the quarter, related to several remodeling projects and construction of a new store due to open this spring. The company is projecting cap-ex of $100 million to $130 million for the fiscal year, with investment shifting back toward store projects after devoting much of its capital resources in 2012 to a new distribution facility.

Freeman said the company was only beginning to see the benefits of the 830,000-square-foot distribution center, which opened near Asheville last year. “It was accretive to our margin, [but] we don’t think we’ve realized all the benefits we’re going to get from [it],” he said.

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