Ingles Markets Still Struggling
After profits suffered in its first quarter, due to the effects of Hurricane Helene, Ingles Markets Inc.’s second-quarter financials have not fared any better.
Net sales totaled $1.33 billion for the quarter ended March 29, a year-over-year (YoY) decrease of 2.7%.
Gross profit for Q2 totaled $311.0 million, or 23.4% of sales, compared with last year’s $321.9 million, or 23.5% of sales.
Operating and administrative expenses for the southeastern grocer totaled $289.1 million, as compared with last year’s $284.8 million.
This quarter’s interest expense was $4.9 million, compared with last year’s $5.6 million.
Net income totaled $15.1 million for Q2 of fiscal 2025, as compared with $31.9 million for Q2 of fiscal 2024. Basic and diluted earnings per share for Class A Common Stock were 81 cents and 80 cents, respectively, for the retailer's latest quarter, a plunge from last year’s $1.72 and $1.68, respectively.
Helene Update
The disappointing profits come as the regional food retailer continues to deal with Hurricane Helene's aftermath. On Sept. 27, 2024, the storm severely damaged western North Carolina, including the area where the company’s Asheville headquarters is located, resulting in catastrophic flooding that caused power, communication and water outages, along with major road closures.
The company estimates that approximately $55 million to $65 million of revenue was lost during the three-week period immediately following the storm, due to road and power outages that prevented some stores from opening or maintaining normal store hours, as well as due to electronic payment disruptions. During Q1, the company incurred approximately $5.4 million in cleanup and repair costs caused by the hurricane.
As of March 29, three of the four Ingles stores temporarily closed due to damage remained closed but are expected to reopen at various points during 2025 or 2026.
However, the grocer is feeling the pressure from at least one community where one of its stores were forced to close as a result of storm damages. The residents of Swannanoa, N.C., are frustrated their Ingles location, the area's only grocery store, has still not opened more than six months after the storm, spurring food insecurity concerns.
First Half of Fiscal 2025
Meanwhile, Ingles also released its earnings for the first half fiscal 2025. The regional grocer's net sales totaled $2.62 billion, an 8.0% fall.
Gross profit came in at $612.1 million, compared with last year’s $670.7 million. Gross profit, as a percentage of sales, was 23.4%, compared with 23.5% during the same period last year.
Operating and administrative expenses totaled $569.9 million. Last year, it was $574.6 million.
Interest expense decreased to $9.9 million, as compared with last year’s $11.3 million. Total debt as of March 29, 2025, was $521.6 million compared with $539.1 million as of March 30, 2024.
Net income totaled $31.7 million for the first six months of fiscal 2025, a sharp decline from last year’s $75.3 million. Basic and diluted earnings per share for Class A Common Stock were $1.70 and $1.67, respectively. This is a significant drop from last year’s $4.05 and $3.96, respectively.
Capital expenditures for the first half of fiscal 2025 totaled $62.0 million, compared with $98.4 million for the first half of fiscal 2024.
The company believes that its financial resources, including its line of credit and other internal and external sources of funds, will be sufficient to meet planned cap ex, debt service and working capital requirements for the foreseeable future.
Robert P. Ingle II, chairman of the board, said, "We continue to support our stores and thank our associates for their hard work delivering value to our customers."
Ingles operates 197 supermarkets in six southeastern states. In conjunction with its supermarket operations, the company runs neighborhood shopping centers, most of which contain an Ingles supermarket. It also owns a fluid-dairy facility that supplies its supermarkets and unaffiliated customers. Ingles is No. 54 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America.
