Ingles Markets Inc. posted increased sales for its 2018 fiscal year and got a lift at the bottom line from deferred tax benefits.
For the 52 weeks ended Sept. 29, Ingles posted sales of $4.09 billion, up 2.3% from $4 billion for the 53-week 2017 fiscal year. Excluding the 53rd week in the previous year, the Asheville, N.C.-based grocer’s fiscal 2018 sales would have risen 4.2%. Leading the way were gains in nonfoods and perishables, while grocery sales were virtually flat.
Same-store sales for the year rose 2% (excluding fuel) on a comparable 52-week basis, Ingles said. Transaction count edged up 0.3%, and the average transaction size grew 2.2%.
Fiscal 2018 net earnings totaled in at $97.4 million, compared with net income of $53.9 million a year earlier. Ingles noted that the passage of the Tax Cuts and Jobs Act of 2017 and a depreciation calculation method change generated nonrecurring tax benefits of $37.3 million. Pretax income for fiscal 2018 was $80.3 million versus $84.3 million in the prior year, with the decrease attributable mainly to the extra week in fiscal 2017, the company said.
Basic and diluted earnings per share for Ingles Class A common stock were $4.94 and $4.81, respectively, in fiscal 2018, up from $2.74 and $2.66 per share in 2017.
Gross profit for fiscal 2018 (52 weeks) rose 1.7% to $980.2 million from $963.6 million in fiscal 2017 (53 weeks). Ingles reported that gross profit was 24% of sales in 2018 compared with 24.1% in 2017. In the grocery segment, gross profit as a percentage of total sales (excluding fuel) gained 31 basis year over year primarily due to a favorable change in the mix of products sold, offset by a slightly lower dollar gross margin on gasoline sales, the company said.
“Our associates’ hard work and dedication contributed to our outstanding sales. We will continue to invest in our business for sustainable long-term growth,” Chairman Robert Ingle said in a statement.
In the 2018 fourth quarter, which had 13 weeks, sales totaled $1.06 billion, down nearly 2.8% from $1.09 billion in the 14-week 2017 quarter. Excluding the extra week, sales would have increased about 4.7%. Comp-store sales, adjusted for 52 weeks, grew 2.3% (excluding fuel) and reflect year-over-year gains in customer count and average transaction size, Ingles said.
The company reported fourth-quarter net income of $18.4 million, compared with $19.4 million in the year-ago period, which had an extra week of operations. Basic and diluted EPS for Ingles Class A common stock were 94 cents and 91 cents, respectively, in the 2018 quarter versus 99 cents and 96 cents a year earlier.
Gross profit in the fourth quarter was $256.4 million, or 24.2% of sales, compared with $261.3 million, or 24% of sales, in the 14-week 2017 quarter.
During fiscal 2018, Ingles opened five new stores and closed four locations, some of which the company said were or are being rebuilt. Other store improvement projects focused on enhancements in merchandising, convenience and the range of products offered to customers, according to the company.
As of Sept. 29, Ingles operated 190 supermarkets under Ingles banner and 10 under Sav-Mor banner in North Carolina, South Carolina, Georgia, Tennessee, Virginia and Alabama. The retailer also has 108 in-store pharmacies and 102 fuel stations.