Ingles Markets(IMKTA) - 2025 Q1 - Quarterly Results

First Quarter Fiscal 2025 Results Executive Summary and Operational Context Ingles Markets reported a significant decrease in net sales and net income for Q1 Fiscal 2025, largely impacted by Hurricane Helene, which caused store closures, lost revenue, and cleanup costs. Despite these challenges, the company remains committed to its communities and customers Chairman's Statement - Chairman Robert P. Ingle II emphasized the company's dedication to offering value and high-quality products to customers, acknowledging the hard work of associates amidst recovery efforts in hurricane-impacted communities[2] Impact of Hurricane Helene - Hurricane Helene severely impacted western North Carolina, leading to catastrophic flooding, power/communication/water outages, and major road closures, affecting the company's operations[2] Hurricane Helene Financial Impact | Metric | Impact | | :----- | :----- | | Stores closed due to damage | 4 (1 reopened, 3 expected to reopen in 2025) | | Estimated lost revenue (3-week period) | $55 to $65 million | | Cleanup and repair costs (Q1 FY25) | $5.4 million | Consolidated Financial Performance Ingles Markets experienced a significant decline in financial performance for Q1 Fiscal 2025 compared to the prior year, with net sales decreasing by 13.0% and net income falling by over 60%. This was primarily driven by lower sales and a reduced gross profit margin, despite a slight decrease in operating expenses and interest expense Income Statement Highlights Key Income Statement Metrics (Q1 FY25 vs Q1 FY24) | Metric | Q1 FY25 (Dec 28, 2024) | Q1 FY24 (Dec 30, 2023) | Change (%) | | :-------------------------- | :--------------------- | :--------------------- | :--------- | | Net Sales | $1.29 billion | $1.48 billion | -13.0% | | Gross Profit | $301.1 million | $348.8 million | -13.7% | | Gross Profit Margin | 23.4% | 23.6% | -0.2 pp | | Operating & Admin Expenses | $280.7 million | $289.8 million | -3.1% | | Interest Expense | $5.0 million | $5.7 million | -12.2% | | Net Income | $16.6 million | $43.4 million | -61.8% | Balance Sheet Highlights Total Debt (Q1 FY25 vs Q1 FY24) | Metric | Q1 FY25 (Dec 28, 2024) ($ millions) | Q1 FY24 (Dec 30, 2023) ($ millions) | Change ($ millions) | | :-------- | :--------------------- | :--------------------- | :----- | | Total Debt | $529.4 million | $546.9 million | -$17.5 million | Capital Expenditures and Liquidity Capital Expenditures (Q1 FY25 vs Q1 FY24) | Metric | Q1 FY25 (Dec 28, 2024) ($ millions) | Q1 FY24 (Dec 30, 2023) ($ millions) | Change ($ millions) | | :----------------- | :--------------------- | :--------------------- | :----- | | Capital Expenditures | $37.8 million | $63.2 million | -$25.4 million | - The Company has no outstanding borrowings under its $150.0 million line of credit and believes its financial resources are sufficient to meet future capital expenditures, debt service, and working capital requirements[7] About Ingles Markets, Incorporated Ingles Markets, Inc. is a leading grocer operating 198 supermarkets across six southeastern states, headquartered in Asheville, NC. The company also manages neighborhood shopping centers and owns a fluid dairy facility, with three stores still closed from Hurricane Helene expected to reopen in 2025 - Ingles Markets, Inc. operates 198 supermarkets in six southeastern states, with headquarters in Asheville, North Carolina[9] - The company also operates neighborhood shopping centers, often containing an Ingles supermarket, and owns a fluid dairy facility supplying both Ingles stores and unaffiliated customers[9] - As of December 28, 2024, three of the four stores damaged by Hurricane Helene remained closed but are anticipated to reopen during 2025[9] Cautionary Note Regarding Forward-Looking Statements This section advises readers that the press release contains forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Key risk factors include general economic conditions, inflation, labor shortages, competitive pressures, and the ability to manage technology and data security - The press release contains forward-looking statements regarding expected financial and operational results, identified by words like 'anticipate,' 'believe,' 'estimate,' 'expect,' and 'will'[10] - Actual results may differ materially due to factors such as business and economic conditions, inflation, labor and product shortages, competitive pressures, changes in gasoline prices, food safety concerns, and the ability to manage technology and data security[10] Unaudited Financial Highlights This section presents the unaudited condensed consolidated financial statements for Ingles Markets, including the Statements of Income for the quarters ended December 28, 2024, and December 30, 2023, and the Balance Sheets as of December 28, 2024, and September 28, 2024, providing detailed financial figures Condensed Consolidated Statements of Income Condensed Consolidated Statements of Income (Unaudited) | Metric | Quarter Ended Dec 28, 2024 ($ thousands) | Quarter Ended Dec 30, 2023 ($ thousands) | | :---------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net sales | 1,288,115 | 1,481,062 | | Gross profit | 301,135 | 348,801 | | Operating and administrative expenses | 280,709 | 289,827 | | Gain (loss) from sale or disposal of assets | 3,146 | 653 | | Income from operations | 23,572 | 59,627 | | Other income, net | 3,297 | 3,607 | | Interest expense | 5,011 | 5,706 | | Pretax income | 21,858 | 57,528 | | Income tax expense | 5,270 | 14,134 | | Net income | 16,588 | 43,394 | | Basic earnings per common share – Class A | $0.89 | $2.33 | | Diluted earnings per common share – Class A | $0.87 | $2.28 | | Basic earnings per common share – Class B | $0.81 | $2.12 | | Diluted earnings per common share – Class B | $0.81 | $2.12 | | Depreciation and amortization expense | $30,939 | $28,774 | | Rent expense | $1,735 | $2,393 | Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (Unaudited) | ASSETS | Dec 28, 2024 ($ thousands) | Sep 28, 2024 ($ thousands) | | :-------------------------- | :------------------------- | :------------------------- | | Cash and cash equivalents | 269,510 | 353,688 | | Receivables-net | 104,710 | 78,266 | | Inventories | 490,792 | 462,085 | | Other current assets | 25,013 | 31,509 | | Property and equipment-net | 1,526,528 | 1,526,708 | | Other assets | 76,719 | 75,627 | | TOTAL ASSETS | 2,493,272 | 2,527,883 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current maturities of long-term debt | 17,521 | 17,521 | | Accounts payable, accrued expenses and current portion of other long-term liabilities | 257,013 | 303,101 | | Deferred income taxes | 64,056 | 63,767 | | Long-term debt | 511,852 | 515,102 | | Other long-term liabilities | 81,222 | 82,643 | | Total Liabilities | 931,664 | 982,134 | | Stockholders' equity | 1,561,608 | 1,545,749 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 2,493,272 | 2,527,883 |