Ingles Markets on Thursday reported its fourth quarter and fiscal year 2015 results.
The North Carolina-based grocery chain said it experienced record core grocery sales and record net income for fiscal 2015. Core grocery sales exclude gasoline. Total sales were $3.78 billion for fiscal 2015 compared with $3.84 billion in fiscal 2014. For the full fiscal years ended September 2015 and 2014, net income rose to $59.4 million in 2015 compared with $51.4 million in 2014.
The growth in core grocery sales for the fourth quarter and fiscal 2015 were offset by lower gasoline prices compared with the prior year, the company says. Ingles sold a record number of gallons of gasoline in fiscal 2015, but the average sales price per gallon was 94 cents lower in fiscal 2015 compared with fiscal 2014.
Net income for the fourth quarter of fiscal 2015 totaled $16.2 million, compared with net income of $17.6 million for the fourth quarter of fiscal 2014. Total core grocery sales increased 2.8 percent in the fourth quarter of fiscal 2015 and 1.9 percent for fiscal 2015 compared with the comparable periods in fiscal 2014.
CEO Robert P. Ingle II said, “We are pleased with our core grocery sales growth, which drove a strong increase in net income for the year.”
Fourth quarter results
Net sales totaled $952.8 million for the quarter ended Sept. 26, 2015, compared with $964.8 million for the comparable quarter in fiscal 2014. Comparable store sales, excluding gasoline, increased 3.1 percent. Gallons of gasoline sold increased while the average per-gallon sales price was substantially lower for the fourth quarter of the current year compared with the fourth quarter of the prior fiscal year.
Gross profit for the fourth quarter of fiscal 2015 increased to $228.1 million, compared with $220.4 million for the fourth quarter of fiscal 2014. Gross profit as a percentage of sales was 23.9 percent and 22.8 percent for the 2015 and 2014 fourth quarters, respectively. Core grocery gross margin increased two basis points comparing the fourth quarter of fiscal 2015 with the fourth quarter of fiscal 2014.
Operating and administrative expenses for the September 2015 quarter totaled $193.0 million. Operating and administrative expenses as a percentage of sales were 20.3 percent for the fourth quarter of fiscal 2015, compared with $184.1 million or 19.1 percent of sales for the fourth quarter of fiscal 2014. Ingles operated 201 stores and approximately 11.0 million s.f. of store space at the end of fiscal 2015 and 202 stores and approximately 11.1 million s.f. of store space at the end of fiscal 2014. During fiscal 2015, the company opened one new store and closed two stores that are being rebuilt and will reopen in the future. The company’s other store improvement capital projects this year focused on improved merchandising, convenience and the range of products offered to our customers, according to the company.
Net income for the September 2015 quarter decreased to $16.2 million, compared with net income of $17.6 million for the September 2014 quarter. Basic and diluted earnings per share for the company’s publicly traded Class A common stock increased to $0.83 and $0.80 per share, respectively, for the September 2015 quarter, compared with $0.82 and $0.79 per share, respectively, for the September 2014 quarter. The increase in earnings per share benefited from a decrease in average weighted shares outstanding due to the company’s now-concluded stock repurchase program.
Annual results
Net sales were $3.78 billion for the fiscal year ended September 2015, a decrease of $57.3 million, or 1.5 percent, from $3.84 billion for the fiscal year ended September 2014. The company achieved record core grocery sales in fiscal 2015. Comparing fiscal 2015 with the previous year, comparable store sales increased 2.1 percent, excluding gasoline sales.
Gross profit for the fiscal year ended Sept. 26, 2015, increased $48.1 million, or 5.7 percent, to $893.3 million, or 23.6 percent of sales, compared with $845.2 million, or 22.0 percent of sales, for the fiscal year ended Sept. 27, 2014. Core grocery gross profit as a percentage of total sales increased 64 basis points comparing fiscal 2015 with fiscal 2014.
Operating expenses increased $33.7 million in fiscal 2015, compared with fiscal 2014, and were 20.0 percent of sales for fiscal 2015 and 18.8 percent of sales for fiscal 2014. Excluding gasoline sales and associated gasoline operating expenses (primarily payroll), operating expenses were 22.9 percent of sales for fiscal 2015, compared with 22.3 percent for fiscal 2014.
Gains on asset disposals totaled $2.2 million for fiscal 2015, compared with $0.8 million for fiscal 2014. During fiscal 2015, the company sold outparcels and wrote off buildings demolished in advance of rebuilding new stores in future periods.
Net income for fiscal 2015 totaled $59.4 million, compared with net income of $51.4 million for fiscal 2014. Basic and diluted earnings per share for the company’s stock were $3.02 and $2.93 per share, respectively, for the year ended Sept. 26, 2015, compared with $2.36 and $2.28 per share, respectively, for the year ended Sept. 27, 2014.
Capital expenditures totaled $104.1 million and $108.3 million for fiscal 2015 and 2014, respectively. Major capital expenditures for fiscal 2015 included a new store, store remodels and the opening of five fuel stations.
