Ingles Markets(IMKTA) - 2025 Q3 - Quarterly Results

Executive Summary Ingles Markets reports Q3 and nine-month fiscal 2025 results, highlighting decreased sales and net income, and includes the Chairman's statement Introduction and Key Highlights Ingles Markets, Incorporated announced Q3 and nine-month fiscal 2025 results, reporting decreased net sales and net income year-over-year - Ingles Markets, Incorporated (NASDAQ: IMKTA) announced results for the three and nine months ended June 28, 2025[1] Chairman's Statement Chairman Robert P. Ingle II thanked associates for delivering value and a positive shopping experience to customers - Chairman Robert P. Ingle II acknowledged associates for delivering value and a great shopping experience[2] Third Quarter Fiscal 2025 Financial Performance This section details Ingles Markets' Q3 fiscal 2025 financial performance, including net sales, gross profit, operating expenses, and net income Net Sales and Gross Profit Analysis Q3 FY2025 net sales decreased by 2.68%, with gross profit percentage of sales increasing, reflecting improved margin efficiency despite an absolute decrease Third Quarter Financial Highlights (YoY) | Metric | Q3 FY2025 (Millions) | Q3 FY2024 (Millions) | Change (%) | | :------------------ | :------------------- | :------------------- | :--------- | | Net Sales | $1,346.2 | $1,393.5 | -2.68% | | Gross Profit | $327.3 | $329.8 | -0.76% | | Gross Profit % of Sales | 24.3% | 23.7% | +0.6 pp | Operating Expenses and Interest Expense Q3 FY2025 operating and administrative expenses increased by 1.33%, while interest expenses decreased by 9.31%, positively impacting the bottom line Third Quarter Expenses (YoY) | Metric | Q3 FY2025 (Millions) | Q3 FY2024 (Millions) | Change (%) | | :------------------------------ | :------------------- | :------------------- | :--------- | | Operating & Administrative Expenses | $290.1 | $286.3 | +1.33% | | Interest Expenses | $4.9 | $5.4 | -9.31% | Net Income and Earnings Per Share Q3 FY2025 net income decreased by 17.39% year-over-year, resulting in a corresponding decline in basic and diluted EPS for both common stock classes Third Quarter Net Income and EPS (YoY) | Metric | Q3 FY2025 | Q3 FY2024 | Change (%) | | :--------------------------- | :-------- | :-------- | :--------- | | Net Income (Millions) | $26.2 | $31.7 | -17.39% | | Basic EPS – Class A | $1.41 | $1.71 | -17.54% | | Diluted EPS – Class A | $1.38 | $1.67 | -17.40% | | Basic EPS – Class B | $1.28 | $1.55 | -17.39% | | Diluted EPS – Class B | $1.28 | $1.55 | -17.39% | Nine Months Fiscal 2025 Financial Performance This section analyzes Ingles Markets' nine-month fiscal 2025 financial performance, covering sales, profits, expenses, debt, and capital expenditures Net Sales and Gross Profit Analysis Nine-month FY2025 net sales decreased by 6.52%, with gross profit also declining but maintaining a stable percentage of sales, indicating consistent margin performance Nine Month Financial Highlights (YoY) | Metric | 9M FY2025 (Millions) | 9M FY2024 (Millions) | Change (%) | | :------------------ | :------------------- | :------------------- | :--------- | | Net Sales | $3,965.6 | $4,242.1 | -6.52% | | Gross Profit | $939.4 | $1,000.4 | -6.10% | | Gross Profit % of Sales | 23.7% | 23.6% | +0.1 pp | Operating Expenses, Interest Expense, and Debt Nine-month FY2025 operating expenses remained stable, interest expense declined by 11.45%, and total debt reduced by 3.34%, reflecting improved financial management Nine Month Expenses and Debt (YoY) | Metric | 9M FY2025 (Millions) | 9M FY2024 (Millions) | Change (%) | | :------------------------------ | :------------------- | :------------------- | :--------- | | Operating & Administrative Expenses | $860.0 | $860.8 | -0.09% | | Interest Expense | $14.7 | $16.7 | -11.45% | | Total Debt (as of period end) | $518.0 | $535.9 | -3.34% | Net Income and Earnings Per Share Nine-month FY2025 net income significantly decreased by 45.89%, leading to a substantial reduction in basic and diluted EPS for both common stock classes Nine Month Net Income and EPS (YoY) | Metric | 9M FY2025 | 9M FY2024 | Change (%) | | :--------------------------- | :-------- | :-------- | :--------- | | Net Income (Millions) | $57.9 | $107.0 | -45.89% | | Basic EPS – Class A | $3.11 | $5.76 | -46.01% | | Diluted EPS – Class A | $3.05 | $5.63 | -45.79% | | Basic EPS – Class B | $2.83 | $5.23 | -45.89% | | Diluted EPS – Class B | $2.83 | $5.23 | -45.89% | Capital Expenditures and Liquidity Nine-month FY2025 capital expenditures decreased by 36%, with full-year projections between $120 million and $160 million, and sufficient liquidity Capital Expenditures (YoY) | Metric | 9M FY2025 (Millions) | 9M FY2024 (Millions) | Change (%) | | :------------------------------ | :------------------- | :------------------- | :--------- | | Capital Expenditures | $91.4 | $143.0 | -36.08% | - Fiscal year 2025 capital expenditures are projected to be approximately $120 million to $160 million[8] - The Company has a $150.0 million line of credit with only $500,000 outstanding and believes its financial resources are sufficient for foreseeable capital expenditures, debt service, and working capital[9] Company Profile and Disclosures This section outlines Ingles Markets' company profile, operations, and store network, alongside cautionary notes regarding forward-looking statements About Ingles Markets, Incorporated Ingles Markets, Incorporated operates 197 supermarkets in six southeastern states, manages shopping centers, and expects three hurricane-closed stores to reopen - Ingles Markets operates 197 supermarkets in six southeastern states and is headquartered in Asheville, North Carolina[10] - The company also operates neighborhood shopping centers and owns a fluid dairy facility[10] - Three stores temporarily closed due to Hurricane Helene are expected to reopen in late 2025 or 2026[10] Cautionary Note Regarding Forward-Looking Statements This section provides a cautionary note that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - The press release contains forward-looking statements subject to risks and uncertainties, including business and economic conditions, inflation, labor shortages, competition, and financing[11] - Actual results may differ materially from expectations, and the company does not commit to updating forward-looking information[11] Unaudited Financial Statements This section presents the unaudited condensed consolidated statements of income and balance sheets for the reported periods Condensed Consolidated Statements of Income This section presents the unaudited condensed consolidated statements of income for the three and nine months ended June 28, 2025, detailing revenue, expenses, and net income Condensed Consolidated Statements of Income (Unaudited) | Metric (Amounts in thousands) | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Nine Months Ended June 28, 2025 | Nine Months Ended June 29, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net sales | $1,346,222 | $1,393,539 | $3,965,609 | $4,242,081 | | Gross profit | 327,330 | 329,758 | 939,442 | 1,000,444 | | Operating and administrative expenses | 290,131 | 286,250 | 859,985 | 860,839 | | Gain from sale or disposal of assets | 143 | 643 | 3,097 | 8,982 | | Income from operations | 37,342 | 44,151 | 82,554 | 148,587 | | Other income, net | 2,769 | 3,554 | 8,909 | 10,542 | | Interest expense | 4,856 | 5,359 | 14,746 | 16,653 | | Income tax expense | 9,056 | 10,624 | 18,824 | 35,462 | | Net income | $26,199 | $31,722 | $57,893 | $107,014 | | Basic earnings per common share – Class A | $1.41 | $1.71 | $3.11 | $5.76 | | Diluted earnings per common share – Class A | $1.38 | $1.67 | $3.05 | $5.63 | | Basic earnings per common share – Class B | $1.28 | $1.55 | $2.83 | $5.23 | | Diluted earnings per common share – Class B | $1.28 | $1.55 | $2.83 | $5.23 | | Depreciation and amortization expense | $30,678 | $29,509 | $92,214 | $87,532 | | Rent expense | $1,779 | $2,534 | $5,507 | $7,591 | Condensed Consolidated Balance Sheets This section presents the unaudited condensed consolidated balance sheets as of June 28, 2025, and September 28, 2024, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (Unaudited) | Metric (Amounts in thousands) | June 28, 2025 | Sept. 28, 2024 | | :---------------------------- | :------------ | :------------- | | ASSETS | | | | Cash and cash equivalents | $336,087 | $353,688 | | Receivables-net | 102,278 | 78,266 | | Inventories | 487,545 | 462,085 | | Other current assets | 21,760 | 31,509 | | Property and equipment-net | 1,524,320 | 1,526,708 | | Other assets | 75,159 | 75,627 | | TOTAL ASSETS | $2,547,149| $2,527,883 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current maturities of long-term debt | $17,453 | $17,521 | | Accounts payable, accrued expenses and current portion of other long-term liabilities | 283,965 | 303,101 | | Deferred income taxes | 67,575 | 63,767 | | Long-term debt | 500,558 | 515,102 | | Other long-term liabilities | 83,741 | 82,643 | | Total Liabilities | 953,292 | 982,134 | | Stockholders' equity | 1,593,857 | 1,545,749 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $2,547,149| $2,527,883 |