Ingles Markets Inc. in early February reported higher sales and pretax income for the three months ended Dec. 29, 2018, compared with the three months ended Dec. 30, 2017.
Total sales rose 4.7 percent over the comparative quarters. Pretax income totaled $28.1 million for the quarter ended Dec. 29, 2018, 10.9 percent higher than pretax income of $25.4 million for the quarter ended Dec. 30, 2017. The December 2017 quarter included a reduction in non-cash deferred tax expense from changes to federal income tax law, resulting in higher net income for the December 2017 quarter compared with the current quarter.
“We had a successful first quarter and holiday season due to the dedication and hard work from all our associates,” said Robert P. Ingle II, Ingles’ chairman of the board. “We also made significant investments in our company that will benefit many future periods.”
First quarter results
Net sales totaled $1.06 billion for the quarter ended Dec. 29, 2018, compared with $1.01 billion for the quarter ended Dec. 30, 2017, an increase of $48.1 million. Comparable store sales, excluding gasoline, increased 3.9 percent. Gasoline gallons sold and the price per gallon increased comparing the December 2018 quarter with the December 2017 quarter. The number of customer transactions (excluding gasoline) and the comparable average transaction size (excluding gasoline) increased compared with the same quarter last year.
Gross profit for the December 2018 quarter rose to $258.4 million, or 24.3 percent of sales. Gross profit for the December 2017 quarter was $244.7 million, also 24.1 percent of sales. Operating and administrative expenses for the December 2018 quarter totaled $218.7 million, compared with $208.8 million for the December 2017 quarter. Increased personnel costs accounted for much of the increase, influenced by increased sales and by continued high demand for labor.
Net income totaled $22.2 million for the quarter ended Dec. 29, 2018, compared with $45.1 million for the quarter ended Dec. 30, 2017. During last year’s first quarter, the company recognized a $26.7 million deferred tax benefit from the December 2017 reduction in the federal income tax rate. This year’s quarter contains no such benefit.
Basic and diluted earnings per share for Class A Common Stock were $1.12 and $1.09, respectively, for the quarter ended Dec. 29, 2018, compared with $2.29 and $2.23 per share, respectively, for the quarter ended Dec. 30, 2017. Basic and diluted earnings per share for Class B Common Stock were each $1.02 for the quarter ended Dec. 29, 2018, compared with $2.08 per basic and diluted Class B share for the quarter ended Dec. 30, 2017.
Capital expenditures totaled $71.0 million for the Dec. 2018 quarter, compared with $56.8 million for the Dec. 2017 quarter. The increase is primarily attributable to the purchase of a shopping center where Ingles had been leasing a store. Total fiscal 2019 capital expenditures are expected to be between $140 million and $180 million.