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Ingles Sales Flat, Profits Dip in Q2

ASHEVILLE, N.C. — Lower margins on rising gasoline prices and milder winter weather contributed to flat same-store sales and a dip in profits during the fiscal second quarter for Ingles Markets, the retailer here said Monday.

Net sales for the 12-week quarter, which ended March 24 increased 1.3% to $881.7 million but were flat excluding gas. Non-fuel comparable store sales dipped by 0.1%.

Net income declined 15.2% to $6.5 million as spiking gas prices resulted in lower fuel margins. Excluding fuel, profits as a percent of sales dropped from 26% to 25.9% during the quarter.

Related story: Holiday Sales Pace Ingles’ Q1 Gains

“Last year in our market area we benefited from school closings and from people being at home due to the bad weather,” Ron Freeman, Ingles’ chief financial officer, said in a conference call discussing results Monday. “Gasoline margins were lower this year and contributed even less to net income.”

While the number of transactions increased slightly, average basket size showed a slight decrease, Freeman added.

Ingles’ capital expenditures should total approximately $160 million for the fiscal year, a figure at the high end of previous estimates, Freeman acknowledged. The costs include a new distribution center scheduled to open later this year, as well as a program of interior store renovations. Freeman said the company expects to touch “dozens” of stores with remodelings this year.

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