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Sales growth at Ingles Markets moderates in Q2

Earnings remain strong as regional grocer looks back to early pandemic period

Russell Redman

May 6, 2021

3 Min Read
Ingles_Markets_storefront_0.jpg
Customers have consolidated store trips, resulting in a lower transaction count and a higher spend per visit, according to Ingles Markets.Ingles Markets

Ingles Markets reported a fiscal 2021 second-quarter sales uptick after notching double-digit gains a year ago, driven by consumer panic-buying in the early weeks of the COVID-19 pandemic.

For the quarter ended March 27, net sales rose 3.4% to $1.18 billion from $1.14 billion a year earlier, Ingles said yesterday. Grocery retail same-store sales edged up 2.6% year over year, excluding fuel. The Asheville, N.C.-based grocer noted in its 10-Q filing with the Securities and Exchange Commission that gasoline dollar sales and gallons sold were higher in the 2021 quarter versus the the prior-year period because of increased travel as pandemic restrictions have relaxed.

Average basket size grew 8.9% in the 2021 second quarter on a comparable-store basis despite a 6.4% decline in the number of transactions. “We believe that, because of the COVID-19 pandemic, customers have consolidated trips to our stores, resulting in a lower transaction count and a higher spend per visit,” Ingles stated in the 10-Q report.

In fiscal 2020, Ingles’ second-quarter net sales climbed 14% to $1.14 billion from $1 billion in the 2019 quarter, with retail comp-store sales up 17.5% excluding fuel. 

Ingles noted that the coronavirus crisis “has had a significant impact on the company’s operations” since the World Health Organization (WHO) declared COVID-19 a global pandemic on March 11, 2020. The United States followed two days later by declaring the virus a national emergency.

Related:Ingles Markets steps up COVID-19 vaccination push

“We continue to be pleased with our results and wish to thank all our associates for their dedication and hard work,” Ingles Markets Chairman Robert Ingle II said in a statement yesterday.

Grocery sales (including center-store groceries, dairy and frozen foods) inched up 0.6% to $427.2 million in the fiscal 2021 second quarter, while sales of perishables (meat, produce, deli and bakery) rose 5.4% to $320.5 million, according to the SEC filing. Nonfood sales (alcoholic beverages, tobacco, pharmacy, and health and beauty aids) gained 3% to $268.8 million. Fuel sales grew 7.2% to $130.7 million.

In the fiscal 2021 first half, net sales totaled $2.37 billion, up 6.8% from $2.22 billion a year ago. Excluding fuel, grocery retail comp-store sales rose 8.6% year over year, with the average basket size up 12.9% and transaction count down 5.3% for the six-month period. By category, 2021 first-half sales rose 8.3% for grocery, 9.7% for perishables and 8.2% for nonfoods, while gas sales decreased 7.6%.

On the earnings side, Ingles posted second-quarter 2021 net income of $52.2 million, or  $2.65 per share ($2.58 diluted), compared with $40.3 million, or $2.04 per share ($1.99 diluted), a year earlier. The per-share figures represent Class A common stock. For the first half, net earnings came in at $106 million, or $5.38 per share ($5.24 diluted), versus $58 million, or $2.94 per share ($2.86 diluted), in the year-ago period.

Related:Ingles Markets to grow curbside service with network upgrade

Class B common shares were $2.41 (basic and diluted) for the second quarter and $4.89 for the first half in 2021 versus $1.86 and $2.68, respectively, in the 2020 periods.

Gross profit climbed by 6.5% to $310.5 million (26.2% of sales) in the 2021 second quarter and by 13.8% to $624.7 million (26.3% of sales) in the half.

Operating and administrative expenses were up 3.7% to $236.9 million for the second quarter and 5.5% for the half, primarily due to COVID-19 safety measures and higher labor costs related to the pandemic, Ingles said.

Ingles totaled $69.4 million in capital expenditures during the 2021 first half, compared with $56.8 million a year earlier. The retailer opened one store and closed one store in the 12 months ended March 27, finishing the period with 198 supermarkets in North Carolina, Georgia, South Carolina, Tennessee, Virginia and Alabama.

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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