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First-quarter sales climb at Ingles Markets

Growth in customer transactions helps lift comp-store results

Ingles Markets posted solid revenue and same-store sales gains for the fiscal 2019 first quarter, while at the bottom line the Southeastern grocer cycled a benefit from federal tax reform.

For the quarter ended Dec. 29, net sales totaled $1.06 billion, up 4.7% from $1.01 billion a year earlier, Asheville, N.C.-based Ingles said Thursday. Comparable-store sales rose 3.9% excluding fuel.

Total customer transactions and average basket size, excluding gasoline, grew in the quarter versus a year ago, Ingles noted. Gasoline gallons sold and the per-gallon price also increased year over year.

First-quarter gross profit came in at $258.4 million, or 24.3% of sales, compared with $244.7 million, or 24.1% of sales, in the prior-year period.

“We had a successful first quarter and holiday season due to the dedication and hard work from all our associates,” Chairman Robert Ingle said in a statement. “We also made significant investments in our company that will benefit many future periods.”

Ingles reported pretax income of $28.1 million for the quarter, up 10.9% from $25.4 million a year ago. Net income totaled $22.2 million, compared with $45.1 million in the fiscal 2018 quarter, which included a $26.7 million deferred tax benefit from a reduction in the federal income tax rate.

Reflecting the prior-year tax benefit, earnings per share (EPS) for Ingles’ Class A common stock was $1.12 ($1.09 diluted) in the 2019 first quarter, compared with $2.29 ($2.23 diluted) a year earlier. The company’s Class B common stock had basic and diluted EPS of $1.02 versus $2.08 in the 2018 period.

Ingles said the acquisition of a shopping center, where the retailer leased a store, lifted capital expenditures to $71 million in the first quarter from $56.8 million a year ago. The company projects fiscal 2019 capital outlays at $140 million to $180 million.

As of the quarter’s end, Ingles operated 200 supermarkets in North and South Carolina, Georgia, Tennessee, Alabama and Virginia, the same as a year earlier.

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