Shoppers Mob Ingles Markets for Pandemic Supplies
Pandemic-related demand propelled same-store sales at Ingles Markets by a whopping 17.5% during the second quarter.
The Asheville, N.C.-based operator of 200 stores also reported that net sales for the second quarter ended March 28 totaled $1.14 billion compared with $1 billion for the second quarter of fiscal 2019.
“We are very appreciative of all our store and warehouse associates that have continued to serve our customers during the COVID-19 pandemic," said Robert P. Ingle II, chairman of the board. "We remain focused on our tremendous obligation to provide food and other products during this unprecedented time."
Ingles says gross profit for the quarter totaled $291.6 million, or 25.5% of sales. Gross profit for the prior-year quarter was $244.3 million, or 24.4% of sales. Operating and administrative expenses for the quarter totaled $228.4 million, compared with $216.5 million for the prior year. Increased labor and personnel costs accounted for most of the increase.
Last month, the grocery chain said it would hire at least 5,000 additional associates to help with pandemic demand. The company also implemented a paid, Two-Week COVID-19 Leave Program for associates who test positive. In addition, the company has modified its sick pay policy, and enhanced the medical plan to provide covered members with additional benefits. Ingles Markets is also providing a one-time bonus payment of $300 to full-time and $150 to part-time active retail, distribution and corporate associates who were hired prior to March 1, 2020.
“During the COVID-19 crisis, the safety of our customers and our associates is our highest priority," Ingle said. "We understand our important role in providing food, medicine and other products to our customers. We are incredibly proud of how our associates have stepped up to the challenge to serve our local communities during this difficult time.”
Ingles has also been implementing COVID-19 related protocols in each store.
"We are installing Plexiglas, marking safe social distances and one-way aisles for all 198 of our stores," Ingles Chief Financial Officer Ron Freeman told the Asheville Citizen Times.
Net income totaled $40.3 million for the second quarter, compared with $15 million for the prior-year period.
For the first half of fiscal 2020, net sales at Ingles totaled $2.22 billion, compared with $2.06 billion in the first half of 2019. Same-store sales, excluding the effect of gasoline, increased 9.7%.
Gross profit for the six-month period totaled $549.1 million, compared with $502.7 million for the first six months of last fiscal year. Gross profit, as a percentage of sales, was 24.7% for the March 2020 six-month period, compared with 24.4% for the March 2019 six-month period.
Over the past 12 months, the company said, it has paid down debt and refinanced certain debt at lower interest rates. The company currently has $165.9 million available under its $175 million line of credit. The company says its financial resources, including the line of credit and other internal and anticipated external sources of funds, will be sufficient to meet planned capital expenditures, debt service and working capital requirements for the foreseeable future.
Along with its supermarket operations, Ingles operates neighborhood shopping centers, most of which contain an Ingles supermarket, and also owns a fluid-dairy facility that supplies its own supermarkets and unaffiliated customers. Ingles is No. 24 on Progressive Grocer’s 2019 Super 50 list of the top grocers in the United States.