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Ingles reports positive Q2, half-year results

BY Allison Cerra

ASHEVILLE, N.C. — Net sales and net income for Ingles Markets realized a 4% and 38% increase, respectively, during the second quarter ended March 26, the retailer announced Friday.

Ingles reported that second-quarter net sales rose $33.4 million to $870.4 million, while second-quarter net income increased from $5.6 million to $7.7 million.

Excluding gasoline, total sales increased 2.4%, and grocery segment comparable-store sales increased 1.9%, compared with the second quarter of the prior fiscal year. The number of customer transactions (excluding gasoline) increased 0.8%, while the comparable average transaction size increased 1.5%, compared with the same quarter last year.

For the first six months of fiscal 2011, net sales rose 3.9% to $1.74 billion, and net income increased 32.4% to $15.4 million, compared with the first six months of fiscal 2010.

During the March 2011 six-month period, Ingles opened one new store and three remodeled stores.

Commenting on the financial results, Ingles Markets CEO Robert Ingle II said the second-quarter results were a "testament to the legacy" of the company’s founder, Robert Ingle, who passed away March 6.

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Weis expands 2011 cap ex budget

BY Michael Johnsen

SUNBURY, Pa. — Weis Markets on Thursday announced an increase of its 2011 capital expenditure budget by 7% to $110 million. The current budget includes 14 major remodels, two additions and three new/replacement stores.

The company currently is building a replacement unit near Reading, a new unit near Easton and a replacement unit near State College, all in Pennsylvania.

"We’ve significantly increased the pace and tempo of our growth," stated Jonathan Weis, vice chairman of Weis Markets, during the grocer’s annual shareholders meeting. "Over the past two years, we’ve averaged 15 major projects — triple what we were doing a couple of years ago — and our cap ex budget has increased by nearly 35% during this period. We continue to reinvest in our stores, information technology systems and human capital at an unprecedented rate."

Weis Markets president and CEO David Hepfinger also reported that the company would continue to increase its technology investments, which have totaled $25 million in recent years. "While we will continue to make major investments in our store base, our growth will be based on more than just bricks and mortar," Hepfinger said. "Effective information technology systems are essential to our growth and success. We are determined to give our associates the tools and analytics they need to better serve the needs of our business and our customers."

In related news, Weis’ board of directors declared a quarterly dividend of 29 cents per share to shareholders of record as of May 9, payable on May 23.

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Safeway’s Q1 in line with company’s expectations

BY Allison Cerra

PLEASANTON, Calif. — Net income for Safeway dropped due to a tax charge and the retailer’s decision to repatriate $1.1 billion from its wholly owned Canadian subsidiary, although the company noted revenue rose nearly 5%.

Net income for the first quarter ended March 26 dropped to $25.1 million, or 7 cents per diluted share, compared with $96 million, or 25 cents per diluted share, in first quarter 2010. Excluding the tax charge, Safeway said first-quarter net income was $105.3 million, or 29 cents per diluted share.

Total sales for the retailer increased 4.8% to $9.8 billion in first quarter 2011, compared with $9.3 billion in first quarter 2010. The retailer said that the increase was the result of higher fuel sales, a 0.4% increase in identical-store sales, excluding fuel, and a higher Canadian exchange rate, partly offset by reduced sales due to closed stores.

"Our first-quarter results are in line with our expectations, and we are pleased with our improving sales trends," said Steve Burd, chairman, president and CEO. "Identical-store sales, excluding fuel, improved for the fifth consecutive quarter and are now positive. We are successfully passing cost inflation along at retail while making appropriate price adjustments to remain competitive."

Safeway is reaffirming guidance for the year of $1.45 to $1.65 earnings per diluted share (including the estimated 1 cents per diluted share negative impact from the Canadian dividend).

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