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Ingles Markets Inc. has a market cap of $404.5 million; its shares were traded at around $16.5 with a P/E ratio of 13.2 and P/S ratio of 0.1. The dividend yield of Ingles Markets Inc. stocks is 4.1%. Ingles Markets Inc. had an annual average earning growth of 9.5% over the past 10 years. GuruFocus rated Ingles Markets Inc. the business predictability rank of 3-star.IMKTA is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations: The Company receives funds for a variety of merchandising activities from the many vendors whose products the Company buys for resale in its stores. These incentives and allowances are primarily comprised of volume or purchase based incentives, advertising allowances, slotting fees, and promotional discounts. The purpose of these incentives and allowances is generally to help defray the costs incurred by the Company for stocking, advertising, promoting and selling the vendor’s products. These allowances generally relate to short term arrangements with vendors, often relating to a period of a month or less, and are negotiated on a purchase-by-purchase or transaction-by-transaction basis. Whenever possible, vendor discounts and allowances that relate to buying and merchandising activities are recorded as a component of item cost in inventory and recognized in merchandise costs when the item is sold. Due to system constraints and the nature of certain allowances, it is sometimes not practicable to apply allowances to the item cost of inventory. In those instances, the allowances are applied as a reduction of merchandise costs using a rational and systematic methodology, which results in the recognition of these incentives when the inventory related to the vendor consideration received is sold. Vendor allowances applied as a reduction of merchandise costs totaled $26.8 million and $25.6 million for the fiscal quarters ended March 27, 2010 and March 28, 2009, respectively. For the six-month periods ended March 27, 2010 and March 28, 2009, vendor allowances applied as a reduction of merchandise costs totaled $52.9 million and $49.2 million, respectively. Vendor advertising allowances that represent a reimbursement of specific identifiable incremental costs of advertising the vendor’s specific products are recorded as a reduction to the related expense in the period in which the related expense is incurred. Vendor advertising allowances recorded as a reduction of advertising expense totaled $3.3 million for the fiscal quarter ended March 27, 2010 and $3.2 million for the fiscal quarter ended March 28, 2009. For the six-month periods ended March 27, 2010 and March 28, 2009, vendor advertising allowances recorded as a reduction of advertising expense totaled $6.8 million and $6.5 million, respectively.
Interest Expense. Interest expense increased $3.5 million for the three-month period ended March 27, 2010 to $16.6 million from $13.1 million for the three-month period ended March 28, 2009. Total debt at March 27, 2010 was $833.5 million compared with $778.3 million at March 28, 2009.
Net Income. Net income totaled $5.6 million for the three-month period ended March 27, 2010 compared with $7.8 million for the three-month period ended March 28, 2009. Net income, as a percentage of sales, was 0.7% for the quarter ended March 27, 2010 and 1.0% for the quarter ended March 28, 2009. Basic and diluted earnings per share for Class A Common Stock were $0.24 and $0.23 for the quarter ended March 27, 2010 compared to $0.33 and $0.32, respectively, for the quarter ended March 28, 2009. Basic and diluted earnings per share for Class B Common Stock were each $0.22 for the quarter ended March 27, 2010 compared to $0.30 of basic and diluted earnings per share for the quarter ended March 28, 2009.
Net Sales. Net sales increased by $83.9 million to $1.68 billion for the six months ended March 27, 2010 from $1.59 billion for the six months ended March 28, 2009. Excluding gasoline, grocery segment sales increased $25.6 million, or 1.8% over the comparative six month 2010 and 2009 periods.
Interest Expense. Interest expense increased $6.7 million to $32.8 million for the six months ended March 27, 2010 from $26.1 million for the six months ended March 28, 2009. Interest expense is higher due to higher total debt, including the issuance of $575.0 million aggregate principal amount of senior notes due in 2017 in May 2009, and related transactions.
Net Income. Net income totaled $11.6 million for the six-month period ended March 27, 2010 compared with $18.9 million for the six-month period ended March 28, 2009. Net income, as a percentage of sales, was 0.7% for the six months ended March 27, 2010 and 1.2% for the six months ended March 28, 2009. Basic and diluted earnings per share for Class A Common Stock were $0.50 and $0.48 for the six months ended March 27, 2010 compared to $0.80 and $0.77, respectively, for the six months ended March 28, 2009. Basic and diluted earnings per share for Class B Common Stock were each $0.45 for the six months ended March 27, 2010 compared to $0.73 of basic and diluted earnings per share for the six months ended March 28, 2009.
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