"We're very pleased with our great start for fiscalyear 2005," said Ingles' CFO Brenda Tudor during theearnings conference call and amid congratulations fromanalysts on the company's performance. Net income grew to $5.1 million, or $0.21 per share,an increase of 110.7% over $2.4 million, or $0.10 pershare, for same period last year. According to thegrocery chain, both net sales and comparable storesales increased 4.7%.

Moreover, gross profit increased 6.5% for the quarter,while gross profit as a percentage of sales increasedto 25.4% in the current year quarter from 25% versuslast year. According to Tudor, the chain benefitedfrom an increased sale of higher margin perishabledepartments. In particular, she notes that Ingles hasfocused on organic offering to improve the perishable performance, as well as increased quality and variety of perishables, which includes produce and dairy.

The retailer, which operates in six southwesternstates, opened one new store and completed one major remodel/expansion during the quarter. Currently, Ingles operates 195 supermarkets and plans to open three new stores in 2005. While analysts were obviously pleased with Ingles'performance, there was so concern regarding Tudor'sdecision to leave the company. CEO Robert Ingles saidthat the company is in the process of reviewingresumes and searching for an appropriate person tofill the CFO position.