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Ingles Markets sees 15% comp-sales growth for 2020

Net income more than doubles in fourth quarter, fiscal year

Russell Redman

December 9, 2020

5 Min Read
Ingles_store_exterior_shot.jpg
Ingles' fiscal 2020 net sales climbed 9.7% to $4.61 billion, lifted in part by an 11.3% gain in the fourth quarter.Ingles Markets

Regional grocer Ingles Markets finished its 2020 fiscal year with double-digit net sales growth in the fourth quarter and saw net earnings more than double in both periods.

For the fourth quarter ended Sept. 26, net sales came in at nearly $1.2 billion, up 11.3% from $1.08 billion a year earlier, Ingles Markets said yesterday. The Asheville, N.C.-based company didn’t report comparable-store sales for the period.

Gross profit in the quarter totaled $324.5 million, or 27.1% of sales, up 24.6% from $260.3 million, or 24.2% of sales, in the fiscal 2019 quarter. 

At the bottom line, fourth-quarter net earnings rose 177% to $57.9 million from $20.9 million a year ago. Diluted earnings per share (EPS) for Class A common stock was $2.86 for the 2020 quarter versus $1.04 in the prior-year period. Diluted EPS for Class B common stock was $2.67 at the quarter’s end, up from 97 cents a year earlier.

Ingles Markets noted that the ongoing COVID-19 crisis had a significant impact on its fiscal 2020 financial results and operations.

“We take seriously the safety of our customers and associates and continue to do our best to provide them a safe and clean environment,” Chairman Robert Ingle said in a statement.

Fiscal 2020 net sales climbed 9.7% to $4.61 billion from $4.2 billion in 2019, Ingles Markets reported. In its 10-K filing with the Securities and Exchange Commission, the retailer said comparable sales excluding fuel rose 15.1% for fiscal 2020, with basket size up 15.8% and the number of transactions down 3.1%. Fuel gallons sold fell 6.3% year over year, while gas prices declined 15.6%.

Related:Ingles Markets to pay third COVID-19 bonus to workers

Ingles Markets produce department.jpg

Sales of perishables — including produce, meat, deli and bakery — surged 13.6% during fiscal 2020 at Ingles Markets, while grocery sales rose even higher, up 17.4%.

“The company’s fiscal year 2020 performance was heavily influenced by the COVID-19 pandemic, which was declared a national emergency on March 13, 2020,” Ingles Markets stated in the 10-K filing. “Various stay-at-home measures were enacted, most schools closed to in-person learning and restaurant dining was severely restricted.  Many of these measures, though relaxed, have remained in place during the fall of 2020 and resulted in higher retail grocery sales throughout the United States.”

Grocery sales (including center-store groceries, dairy and frozen foods) jumped 17.4% $1.69 billion for fiscal 2020, while sales of perishables (meat, produce, deli and bakery) surged 13.6% to $1.26 billion, according to the SEC filing. Nonfood sales (alcoholic beverages, tobacco, pharmacy, and health and beauty aids) climbed 14% to $1.07 billion. Fuel sales dropped 20.9% to $459.6 million. 

Gross profit in fiscal 2020 was $1.2 billion, or 26% of sales, versus $1.02 billion, or 24.3% of sales, in 2019. Ingles Markets said in its 10-K report that the gross margin increase reflects COVID-19 market factors that impacted prices and mix of products sold. “There was less overall discounting of products sold in the company’s stores, and sales of higher-margin meal replacements benefitted from reduced restaurant dining,” the company stated in the filing.  

Related:Ingles Markets posts another double-digit sales gain in Q3

On the earnings side, full-year net income came in at $178.6 million, up 119% from $81.6 million in fiscal 2019. Diluted EPS was $8.82 for Class A common stock (versus $4.03 in 2019) and $8.24 for Class B common stock (versus $3.76 in 2019).

Ingles Markets said in the filing that the fiscal 2020 earnings result was “primarily due to the impact of the COVID-19 pandemic, as more persons relied upon their local grocery stores for food and nonfood products given travel restrictions and limited options for dining out.” Net income as a percentage of sales was 3.9% for fiscal 2020 versus 1.9% for 2019, according to the company.

The retailer finished fiscal 2020 with capital expenditures of $122.8 million, up from $161.8 million in 2019. 

“Increased fiscal 2020 sales resulted primarily from the COVID-19 pandemic, as stay-at-home orders closed schools, limited restaurant options and increased at-home meal preparation. Increased sales were also from new and replacement stores; the introduction of new products and product presentation, especially in higher-margin products; effective promotions; and cost competitiveness,” Ingles Markets said in the SEC filing. “We continue to improve our use of data gained from The Ingles Advantage Savings and Rewards Card to increase net sales and comparable-store sales through enhanced loyalty programs and special offers. Information obtained from holders of the Ingles Advantage Card also assists the company in optimizing product offerings and promotions specific to customer shopping patterns.”

Ingles Markets closed out fiscal 2020 with 197 supermarkets in six states, including 73 in North Carolina, 66 in Georgia, 35 in South Carolina, 21 in Tennessee, and one apiece in Virginia and Alabama, compared with 198 stores overall at the end of fiscal 2019. The food and drug retailer also currently operates 109 in-store pharmacies and 106 fuel centers.
 
“Sales in the 2021 fiscal year compared with fiscal 2020 will in large part depend upon the duration of the COVID-19 impact on our market area,” Ingles Markets said in its 10-K report. “Until there is a widely available vaccine, it is possible that restrictions will continue to be in place on restaurants and schools, among other things, which we expect will result in a continuation of above-average consumer reliance on grocery retailers. The company anticipates adding new stores in fiscal 2021, expects to continue remodeling a significant number of existing stores, and plans to add more fuel stations and pharmacies.”

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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