Coronavirus-driven purchases helped lift net sales at Ingles Markets by 12% in the fiscal 2020 third quarter.
For the quarter ended June 27, net sales came in at $1.19 billion versus $1.06 billion a year earlier, Ingles said Thursday. The 12% rise continued momentum from a 14% net sales gain in the second quarter ended March 28, about two weeks after the COVID-19 pandemic was declared a national emergency.
Ingles didn’t report retail comparable-store sales data for the third quarter and couldn’t immediately be reached for comment. The Asheville, N.C.-based regional grocer saw retail comp sales climb 17.5% excluding fuel in the second quarter.
At the bottom line, third-quarter net income surged 167% to $62.8 million from $23.5 million a year ago. Diluted earnings per share (EPS) for Class A common stock was $3.10 for the 2020 quarter versus $1.16 in the prior-year period. EPS for Class B common stock were $2.89 at the quarter’s end, up from $1.08 a year earlier.
Third-quarter gross profit jumped 25.4% to $324.7 million, or 27.3% of sales, from $258.9 million, or 24.4% of sales, in the fiscal 2019 quarter.
Operating and administrative expenses rose to $234.6 million in the third quarter from $216.5 million a year ago, mainly due to higher personnel costs to support additional COVID-19 safety measures, including a second appreciation bonus payment to employees, Ingles said.
On June 24, the company announced a bonus of $300 for full-time and $150 for part-time active retail, distribution and corporate associates to be paid at the end of July. In early April, the retailer also unveiled plans to hire more than 5,000 additional workers to support staff in its stores and distribution center to meet extra demands brought by the pandemic.
“We are proud to provide service to our customers during such a disruptive time,” Chairman Robert Ingle said in a statement on Thursday. “This is made possible by the dedication of our associates, who continue to maintain store conditions at the highest level.”
For the year to date, net sales are up 9.2% to $3.41 billion versus a year ago. Net income for the nine months nearly doubled, coming in at $120.7 million. Diluted EPS for Class A Common Stock was $5.96, while the EPS Class B Common Stock was $5.57.
Ingles finished the third quarter with 197 supermarkets in the Carolinas, Georgia, Tennessee, Alabama and Virginia, compared with 199 a year ago.
The retailer said capital expenditures for the year to date totaled $78.9 million, compared with $123.2 million a year earlier, and have focused on current and upcoming stores. Capital spending for fiscal 2020 is projected at $100 million to $120 million, including ongoing improvements to the existing store base, according to the company.