ASHEVILLE, N.C. - Ingles Markets, Incorporated (NASDAQ: IMKTA) today reported increased sales and net income for the three and six months ended March 27, 2021.
The coronavirus (COVID-19) pandemic was declared a national emergency on March 13, 2020. The pandemic has had a significant impact on the Company’s operations since then. At this time the Company cannot predict the impact of the pandemic on future periods.
Robert P. Ingle II, Chairman of the Board, stated, ”We continue to be pleased with our results and wish to thank all our associates for their dedication and hard work.”
Second Quarter Results
Net sales totaled $1.18 billion for the quarter ended March 27, 2021, an increase of 3.4% compared with $1.14 billion for the quarter ended March 28, 2020.
Gross profit for the second quarter of fiscal 2021 totaled $310.5 million, or 26.2% of sales. Gross profit for the second quarter of fiscal 2020 was $291.6 million, or 25.5% of sales.
Operating and administrative expenses for the March 2021 quarter totaled $236.9 million compared with $228.4 million for the March 2020 quarter. Most of the increase was due to higher costs incurred to support additional safety measures related to the pandemic.
Interest expense totaled $6.2 million for the three-month period ended March 27, 2021, compared with $10.2 million for the three-month period ended March 28, 2020. Total debt at the end of March 2021 was $647.8 million compared with $842.1 million at the end of March 2020. The Company continues to reduce higher rate debt and has refinanced debt at lower rates over the past twelve months.
Net income totaled $52.2 million for the three-month period ended March 27, 2021, compared with $40.3 million for the three-month period ended March 28, 2020. Basic and diluted earnings per share for Class A Common Stock were $2.65 and $2.58, respectively, for the quarter ended March 27, 2021, compared with $2.04 and $1.99, respectively, for the quarter ended March 28, 2020.
First Half Results
First half fiscal 2021 net sales totaled $2.37 billion, an increase of 6.8% compared with $2.22 billion in the first half of 2020.
Gross profit for the six months ended March 27, 2021, totaled $624.7 million, compared with $549.1 million for the first six months of last fiscal year. Gross profit, as a percentage of sales, was 26.3% for the March 2021 six-month period, compared with 24.7% for the March 2020 six-month period.
Operating and administrative expenses totaled $475.0 million for the six months ended March 27, 2021, and $450.4 million for the six months ended March 28, 2020. Increased labor and other pandemic-related costs accounted for most of the increase.
Interest expense decreased to $12.6 million for the six-month period ended March 27, 2021, compared with $22.1 million for the six-month period ended March 28, 2020. During fiscal year 2020, the Company refinanced $155 million of 5.75% debt with ten-year fixed rate secured debt at 2.95%. Debt extinguishment costs of $3.7 million were incurred to complete the transaction. Since March 2020, the Company repaid an additional $250 million of the 5.75% debt.
Net income totaled $106.0 million for the six-month period ended March 27, 2021, compared with $58.0 million for the six-month period ended March 28, 2020. Basic and diluted earnings per share for Class A Common Stock were $5.38 and $5.24, respectively, for the six months ended March 27, 2021, compared to $2.94 and $2.86, respectively, for the six months ended March 28, 2020.
Capital expenditures for the March 2021 six-month period totaled $69.4 million compared with $56.8 million for the March 2020 six-month period. Capital expenditures are focused on stores that opened this fiscal year as well as stores scheduled to open later.
The Company currently has $81.5 million available under its $175.0 million line of credit. The Company believes 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.
Ingles continues to provide additional pandemic support to its communities, including increased donations to local food banks and purchases from local vendors.
The comments in this press release contain certain forward-looking statements. Ingles undertakes no obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. Ingles’ actual results may differ materially from those projected in forward-looking statements made by, or on behalf of, Ingles. Factors that may affect results include changes in business and economic conditions generally in Ingles’ operating area, pricing pressures, increased competitive efforts by others in Ingles’ marketing areas and the availability of financing for capital improvements. A more detailed discussion of these factors may be found in reports filed by the Company with the Securities and Exchange Commission including its 2019 Form 10-K.
Ingles Markets, Incorporated is a leading supermarket chain with operations in six southeastern states. Headquartered in Asheville, North Carolina, the Company operates 198 supermarkets. In conjunction with its supermarket operations, the Company operates neighborhood shopping centers, most of which contain an Ingles supermarket. The Company also owns a fluid dairy facility that supplies Company supermarkets and unaffiliated customers. The Company's Class A Common Stock is traded on The NASDAQ Stock Market's Global Select Market under the symbol IMKTA. For more information, visit Ingles' website at www.ingles-markets.com.