Lower gas prices helped Ingles Markets achieve higher profits at the pump and left customers with more cash to buy groceries. The result was a 57.7% improvement in net earnings and a 2.1% increase in sales in the fiscal first quarter.
“I think the biggest impact with lower gas prices, [is that] the consumer just has a lot more money in his pocket,” Ron Freeman, Ingles CFO, said in a conference call discussing results of the period, which ended Dec. 27. “He is coming in. He is buying. And he is buying better.”
Ingles stock, which nearly doubled in value over the last year, was down following the results early Friday. Some sources speculated that a big run in the stock over recent months indicated a potential deal to realize value of its real estate was in the works, but officials made no mention of such activity while reviewing results Friday.
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Higher profits from gasoline sales helped Ingles’ profits as a percent of sales increase to 23.3% from 21.5% in the same period a year ago. Margins also improved excluding gasoline, Freeman noted, with grocery showing an improvement of 58 basis points.
Sales totaled $964.5 million and non-fuel comparable-store sales improved by 2.3%, reflecting an increase in average transaction size and a slight decline in the number of trips, Freeman said.
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