Both net and same-store sales jumped by double digits at Ingles Markets in the fiscal 2020 second quarter, fueled by heightened consumer demand for groceries amid the coronavirus crisis.
For the quarter ended March 28, net sales rose 14% to $1.14 billion from $1 billion a year earlier, Ingles said Thursday. Retail comparable-store sales climbed 17.5%, excluding fuel sales.
The sales surge boosted Ingles’ profits for the quarter. Gross profit came in at $291.6 million, or 25.5% of sales, up from $244.3 million, or 24.4% of sales, in the 2019 quarter.
At the bottom line, net earnings totaled $40.3 million for the first quarter, more than double the $15 million generated a year ago. Diluted earnings per share for Class A common stock was $1.99 for the 2020 quarter versus 74 cents in the prior-year period. Shares of Class B common stock were $1.86 at the quarter’s end, up from 69 cents a year earlier.
Operating and administrative expenses totaled $228.4 million in the first quarter, compared with $216.5 million for the 2019 quarter. Ingles said higher labor and staffing costs accounted for most of the increase. In early April, the Asheville, N.C.-based grocer announced plans to hire more than 5,000 additional workers in its supermarkets and distribution center to support current employees and meet extra demands brought by the pandemic.
“We are very appreciative of all our store and warehouse associates that have continued to serve our customers during the COVID-19 pandemic,” Ingles Markets Chairman Robert Ingle II said in a statement. “We remain focused on our tremendous obligation to provide food and other products during this unprecedented time.”
Ingles Markets gave no guidance on upcoming fiscal 2020 results. “At this time, the company cannot predict the impact of the pandemic on future periods,” the retailer stated.
In the fiscal 2020 first half, net sales rose 7.8% to $2.22 billion from $2.06 billion for the year-ago period, with retail comp sales excluding gasoline up 9.7%. Net income totaled $58 million for the six months, compared with $37.2 million in the 2019 first half.
First-half capital expenditures were $56.8 million, down from $94.2 million a year ago, when Ingles had raised capex for additional new store construction, store remodeling and property acquisitions. The company forecasts full-year capital spending at $120 million to $160 million.
Ingles operates 198 supermarkets in the Carolinas, Georgia, Tennessee, Alabama and Virginia, including 108 in-store pharmacies and 104 fuel centers. The regional grocer’s operations also include 1.65 million square feet of warehouse and distribution facilities plus a milk processing and packaging plant that supplies its supermarkets and unaffiliated customers.
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