Ingles Markets, Incorporated Reports Sales and Net Income for Second Quarter and First Six Months of Fiscal 2022

Rhea-AI Summary

Ingles Markets (NASDAQ: IMKTA) reported a strong financial performance for the second quarter and first half of fiscal 2022. Net sales increased by 16.3% to $1.38 billion in Q2, with net income rising to $68.6 million, up from $52.2 million a year earlier. Gross profit for Q2 was $348.6 million, representing 25.3% of sales. For the first half, net sales reached $2.77 billion, with net income of $134.8 million, marking an increase of 16.6% compared to the same period last year. Despite increased expenses, the company maintains a solid cash position with no borrowings on its credit line.

Positive

• Q2 net sales increased by 16.3% to $1.38 billion.
• Net income rose to $68.6 million in Q2, up from $52.2 million.
• First half net sales reached $2.77 billion, a 16.6% increase.
• Gross profit for the first half was $699.1 million, up from $624.7 million.
• Decreased interest expense to $10.8 million for the six-month period.

Negative

• Gross profit margin decreased from 26.2% to 25.3% in Q2.
• Operating expenses increased to $514.8 million for the first half, up from $475 million.

ASHEVILLE, N.C.--(BUSINESS WIRE)-- Ingles Markets, Incorporated (NASDAQ: IMKTA) today reported increased sales and net income for the three and six months ended March 26, 2022.

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 are pleased with our strong results due to the dedication and hard work from our associates. We continue to work hard to provide affordable products and selection to our customers during these challenging times.”

Second Quarter Results

Net sales totaled $1.38 billion for the quarter ended March 26, 2022, an increase of 16.3% compared with $1.18 billion for the quarter ended March 27, 2021.

Gross profit for the second quarter of fiscal 2022 totaled $348.6 million, or 25.3% of sales. Gross profit for the second quarter of fiscal 2021 was $310.5 million, or 26.2% of sales.

Operating and administrative expenses for the March 2022 quarter totaled $254.7 million compared with $236.9 million for the March 2021 quarter. Most of the increase was due to higher personnel costs which reflect a tight labor market.

Interest expense totaled $5.4 million for the three-month period ended March 26, 2022, compared with $6.2 million for the three-month period ended March 27, 2021.

Net income totaled $68.6 million for the three-month period ended March 26, 2022, compared with $52.2 million for the three-month period ended March 27, 2021. Basic and diluted earnings per share for Class A Common Stock were $3.70 and $3.61, respectively, for the quarter ended March 26, 2022, compared with $2.65 and $2.58, respectively, for the quarter ended March 27, 2021.

First Half Results

First half fiscal 2022 net sales totaled $2.77 billion, an increase of 16.6% compared with $2.37 billion in the first half of 2021.

Gross profit for the six months ended March 26, 2022, totaled $699.1 million, compared with $624.7 million for the first six months of last fiscal year. Gross profit, as a percentage of sales, was 25.3% for the March 2022 six-month period, compared with 26.3% for the March 2021 six-month period.

Operating and administrative expenses totaled $514.8 million for the six months ended March 26, 2022, and $475.0 million for the six months ended March 27, 2021. Labor costs accounted for most of the increase.

Interest expense decreased to $10.8 million for the six-month period ended March 26, 2022, compared with $12.6 million for the six-month period ended March 27, 2021. Total debt at the end of March 2022 was $578.5 million compared with $647.8 million at the end of March 2021.

Net income totaled $134.8 million for the six-month period ended March 26, 2022, compared with $106.0 million for the six-month period ended March 27, 2021. Basic and diluted earnings per share for Class A Common Stock were $7.26 and $7.10, respectively, for the six months ended March 26, 2022, compared to $5.38 and $5.24, respectively, for the six months ended March 27, 2021.

Capital expenditures for the March 2022 six-month period totaled $34.1 million compared with $69.4 million for the March 2021 six-month period.

The Company currently has no outstanding borrowings under its $150.0 million line of credit.

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 2021 Form 10-K and 2022 Forms 10-Q.

Ingles Markets, Incorporated is a leading grocer 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 Ingles supermarkets and unaffiliated customers. To learn more about Ingles Markets visit ingles-markets.com.

INGLES MARKETS, INCORPORATED
(Amounts in thousands except per share data)
Unaudited Financial Highlights
Condensed Consolidated Statements of Income (Unaudited)
		Three Months Ended						Six Months Ended
		March 26,			March 27,			March 26,			March 27,
		2022			2021			2022			2021
Net sales		$	1,377,119		$	1,184,555		$	2,768,648		$	2,374,998
Gross profit			348,563			310,500			699,107			624,689
Operating and administrative expenses			254,739			236,850			514,825			475,049
Gain from sale or disposal of assets			1,265			663			1,209			1,115
Income from operations			95,089			74,313			185,491			150,755
Other income, net			1,344			646			2,936			1,337
Interest expense			5,426			6,195			10,839			12,596
Income tax expense			22,366			16,575			42,758			33,483
Net income		$	68,641		$	52,189		$	134,830		$	106,013
Basic earnings per common share – Class A		$	3.70		$	2.65		$	7.26		$	5.38
Diluted earnings per common share – Class A		$	3.61		$	2.58		$	7.10		$	5.24
Basic earnings per common share – Class B		$	3.36		$	2.41		$	6.60		$	4.89
Diluted earnings per common share – Class B		$	3.36		$	2.41		$	6.60		$	4.89
Additional selected information:
Depreciation and amortization expense		$	29,968		$	30,327		$	59,265		$	60,206
Rent expense		$	2,956		$	2,981		$	5,588		$	5,678
Condensed Consolidated Balance Sheets (Unaudited)
		March 26,						Sept. 25,
		2022						2021
ASSETS
Cash and cash equivalents		$	65,624					$	70,313
Short term investments			115,007						5,000
Receivables-net			98,011						95,082
Inventories			397,891						389,953
Other current assets			24,906						15,092
Property and equipment-net			1,343,411						1,370,769
Other assets			79,327						72,135
TOTAL ASSETS		$	2,124,177					$	2,018,344
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt		$	17,619					$	17,601
Accounts payable, accrued expenses and current portion of other long-term liabilities			270,370						288,497
Deferred income taxes			73,964						72,768
Long-term debt			560,833						571,913
Other long-term liabilities			80,540						84,306
Total Liabilities			1,003,326						1,035,085
Stockholders' equity			1,120,851						983,259
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY		$	2,124,177					$	2,018,344

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220505005027/en/

Pat Jackson, Chief Financial Officer

(828) 669-2941 (Ext. 223)

Source: Ingles Markets, Incorporated

FAQ

What were the earnings results for IMKTA in Q2 2022?

In Q2 2022, Ingles Markets reported net income of $68.6 million, with earnings per share of $3.70.

How did Ingles Markets perform in the first half of fiscal 2022?

For the first half of fiscal 2022, Ingles Markets reported net sales of $2.77 billion and net income of $134.8 million.

What is the net sales growth percentage for IMKTA in Q2 2022?

Ingles Markets experienced a net sales growth of 16.3% in Q2 2022.

What were the operating expenses for IMKTA in the first half of 2022?

Operating expenses for the first half of 2022 totaled $514.8 million.

Did IMKTA experience any changes in interest expenses in 2022?

Ingles Markets reported a decrease in interest expense to $10.8 million for the six-month period ending March 26, 2022.