Last updated on May 14th, 2018
Ingles Markets Inc. is reporting increased sales and net income for the three and six months ended March 31, 2018. Net sales totaled $984.6 million and net income totaled $9.3 million for the second quarter, compared with $946.2 million and $9.2 million, respectively, for the second quarter of fiscal year 2017.
“Our strong sales performance benefited from improvements in our store base and from the variety of products we carry,” said Robert P. Ingle II, chairman of the board. “We listen to our customers and to our associates to ensure we are always focused on improvement.”
Net sales totaled $2 billion and net income totaled $54.4 million for the six months ended March 31, 2018, compared with $1.93 billion and $23 million, respectively, for the six months ended March 25, 2017. Fiscal year 2018 net income was impacted by the passage of the Tax Cuts and Jobs Act of 2017.
For fiscal year 2018, Easter occurred in March and benefitted sales for the second quarter of this fiscal year. For fiscal year 2017, Easter occurred in April and benefitted sales for the third quarter of that year.
Second quarter results
Ingles’ net sales increased by $38.4 million, or 4.1 percent, to $984.6 million for the three months ended March 31, 2018, from $946.2 million for the three months ended March 25, 2017. Excluding gasoline sales and the effect of extra 2018 Easter sales, retail grocery comparable store sales increased 1.7 percent over the comparative fiscal second quarters. Gasoline sales—both in dollars and gallons—increased compared with the prior year’s second quarter.
Gross profit for the March 2018 quarter totaled $235.2 million, higher than gross profit of $228.1 million for the second quarter of last fiscal year. Gross profit, as a percentage of sales, was 23.9 percent for the March 2018 quarter compared with 24.1 percent for the March 2017 quarter. Excluding gasoline sales, retail gross margin increased 15 basis points comparing the March 2018 and March 2017 fiscal quarters.
Operating and administrative expenses for the March 2018 quarter totaled $211.6 million, compared with $203.0 million for the March 2017 quarter. Increased personnel costs accounted for most of the increase.
Interest expense totaled $12.2 million for the three-month period ended March 31, 2018, and $11.7 million for the three-month period ended March 25, 2017. Total debt at the end of March 2018 was $888.9 million compared with $876.5 million at the end of March 2017.
Ingles’ effective tax rate was 23.8 percent for the March 2018 quarter compared with 35.1 percent for the March 2017 quarter, reflecting the lower maximum corporate federal tax rate enacted in December.
Net income totaled $9.3 million for the three-month period March 31, 2018, compared with $9.2 million for the three-month period ended March 25, 2017. Basic and diluted earnings per share for Class A Common Stock were $0.47 and $0.46, respectively, for the quarter ended March 31, 2018, compared with $0.47 and $0.45, respectively, for the quarter ended March 25, 2017. Basic and diluted earnings per share for Class B Common Stock were $0.43 for the quarter ended March 31, 2018, and $0.42 for the quarter ended March 25, 2017.
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