Decreasing gasoline prices, along with higher labor costs, contributed to decreases in sales and net earnings during the fiscal first quarter at Ingles Markets, the company said Monday.
Although the Asheville, N.C.-based retailer sold more gasoline than a year ago, a 29% decrease in average per-gallon prices as compared with last year triggered a 1.4% decrease in sales for the quarter. Ingles totaled $951.1 million in sales for the period, which ended Dec. 27.
Excluding gasoline, Ingles’ sales increased by 2.6%, with non-fuel comp-store sales increasing by 2.3% led by a 1.7% increase in average transaction size. Grocery gross margins were flat with last year’s first quarter.
In a conference call discussing results, CFO Ronald Freeman said gasoline margins were also lower than the year-ago period, which along with higher labor expenses, contributed to a 13.7% decrease in net earnings. The company posted $13 million in quarterly net earnings, down from $15 million in the year-ago period.
Freeman said upward pressure on hourly wages, higher personnel counts at new stores and additional labor to support a greater emphasis on prepared foods contributed to the increase in expenses during the quarter.
Capital expenditures increased to $40.6 million for the first quarter from $27.6 million last year, due mainly to the acquisition of two sites for future store development, Freeman said. The company anticipates spending between $100 million and $140 million on capital projects during the fiscal year.
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