Ingles Markets, Incorporated Reports Results for Fourth Quarter and Fiscal Year 2024

Rhea-AI Summary

Ingles Markets (NASDAQ: IMKTA) reported its Q4 and fiscal year 2024 results, significantly impacted by Hurricane Helene. The company recognized a $30.4 million inventory impairment loss and a $4.5 million property and equipment impairment loss due to the hurricane. Q4 net sales decreased to $1.40 billion from $1.58 billion year-over-year, with Q4 2024 having 13 weeks compared to 14 weeks in 2023.

For fiscal year 2024, net sales were $5.64 billion compared to $5.89 billion in 2023. Net income decreased to $105.5 million from $210.8 million in the previous year. The company reported total debt of $532.6 million at year-end, down from $550.2 million in 2023. Capital expenditures increased to $210.9 million from $173.6 million year-over-year.

Positive

• Reduction in total debt from $550.2M to $532.6M
• Full $150M credit line availability
• Increased capital expenditures from $173.6M to $210.9M

Negative

• Q4 net loss of $1.5M compared to $52.6M profit in Q4 2023
• $34.9M total hurricane-related impairment losses
• Annual net income declined 50% to $105.5M from $210.8M
• Q4 net sales decreased to $1.40B from $1.58B
• Gross profit margin declined to 21.4% from 23.3% in Q4

Insights

Financial Analyst

The Q4 and FY2024 results reveal significant challenges for Ingles Markets. Net sales declined to $1.40 billion in Q4 2024 from $1.58 billion in Q4 2023, while shifting from a $52.6 million profit to a $1.5 million loss. Hurricane Helene inflicted substantial damage, resulting in a combined $34.9 million impairment loss from inventory and property damage. The annual performance shows concerning trends with net income dropping 50% to $105.5 million. However, the company maintains financial stability with full access to its $150 million credit line and reduced total debt of $532.6 million. Gross margin compression from 23.3% to 21.4% in Q4 signals increased competitive pressure and operational challenges. The increased capital expenditure of $210.9 million suggests continued investment in growth despite headwinds.

Risk Management Expert

The Hurricane Helene impact exposes significant vulnerabilities in Ingles Markets' disaster preparedness and business continuity planning. The $34.9 million combined loss from inventory and property damage highlights the need for enhanced risk mitigation strategies. The catastrophic flooding affecting power, communications and water systems reveals critical infrastructure dependencies. However, the company's strong liquidity position and debt management provide a buffer against such extraordinary events. The geographic concentration of stores in the Southeast increases exposure to similar weather-related risks. Future insurance premiums may rise, potentially impacting operating costs. Management should consider implementing more robust disaster recovery protocols and diversifying geographic risk.

ASHEVILLE, N.C.--(BUSINESS WIRE)-- Ingles Markets, Incorporated (NASDAQ: IMKTA) today reported results for the three and twelve months ended September 28, 2024.

Robert P. Ingle II, Chairman of the Board, stated, “After Hurricane Helene impacted our communities, I am proud of how not only our associates came together, but our entire region. We are truly thankful for all the volunteers and the outpouring of support for our region.”

Impact of Hurricane Helene

On September 27, 2024, Hurricane Helene severely impacted western North Carolina, including the area where the Company’s headquarters are located, resulting in catastrophic flooding which caused power, communication and water outages, and major road closures. For the quarter and year ended September 28, 2024, the Company recognized an impairment loss of $30.4 million related to inventory damaged or destroyed by Hurricane Helene. Additionally, the Company also recognized a property and equipment impairment loss of $4.5 million for the quarter and year ended September 28, 2024.

Fourth Quarter Results

Net sales totaled $1.40 billion for the quarter ended September 28, 2024, compared with $1.58 billion for the quarter ended September 30, 2023. Fourth quarter results of fiscal 2024 had 13 weeks compared to 14 weeks for the fourth quarter of fiscal 2023.

Gross profit for the fourth quarter of fiscal 2024 totaled $299.4 million, or 21.4% of sales. Gross profit for the fourth quarter of fiscal 2023 was $369.7 million, or 23.3% of sales.

Operating and administrative expenses for the fourth quarter of fiscal 2024 totaled $301.0 million compared with $299.4 million for the fourth quarter of fiscal 2023.

Interest expense totaled $5.2 million for the fourth quarter of fiscal 2024 compared with $5.9 million for the fourth quarter of fiscal 2023. Total debt at the end of fiscal 2024 was $532.6 million compared with $550.2 million at the end of fiscal 2023.

Net loss totaled $1.5 million for the fourth quarter of fiscal 2024 quarter compared with net income of $52.6 million for the fourth quarter of fiscal 2023. Basic and diluted losses per share for Class A Common Stock were $0.08, for the quarter ended September 28, 2024, compared with basic and diluted earnings per share of $2.83 and $2.77, respectively, for the quarter ended September 30, 2023. Basic and diluted losses per share for Class B Common Stock were each $0.07 for the quarter ended September 28, 2024, compared with basic and diluted income per share of $2.57 for the quarter ended September 30, 2023.

Annual Results

Net sales totaled $5.64 billion for the fiscal year ended September 28, 2024, compared with $5.89 billion for the fiscal year ended September 30, 2023. The fiscal year ended September 28, 2024, had 52 weeks, and the fiscal year ended September 30, 2023, had 53 weeks.

Gross profit for the fiscal year ended September 28, 2024, totaled $1.3 billion, or 23.1% of sales. Gross profit for the fiscal year ended September 30, 2023, totaled $1.4 billion, or 23.8% of sales.

Operating and administrative expenses totaled $1.2 billion for the fiscal year ended September 28, 2024, and $1.1 billion for the fiscal year ended September 30, 2023.

Interest expense was $21.9 million for the fiscal year ended September 28, 2024, compared with $22.1 million for the fiscal year ended September 30, 2023.

Net income totaled $105.5 million for the fiscal year ended September 28, 2024, compared with $210.8 million for the fiscal year ended September 30, 2023. Basic and diluted earnings per share for Class A Common Stock were $5.68 and $5.56, respectively, for the fiscal year ended September 28, 2024, compared with $11.35 and $11.10, respectively, for the fiscal year ended September 30, 2023. Basic and diluted earnings per share for Class B Common Stock were each $5.16 for the fiscal year ended September 28, 2024, compared with basic and diluted earnings per share of $10.32 for the fiscal year ended September 30, 2023.

Capital expenditures for the 2024 fiscal year totaled $210.9 million compared with $173.6 million for the 2023 fiscal year.

The Company currently has the full amount available under its $150.0 million line of credit. The Company believes its financial resources, including the line of credit and other internal and anticipated external sources of funds, will be sufficient to meet planned capital expenditures, debt service and working capital requirements for the foreseeable future.

About Ingles Markets, Incorporated

Ingles Markets, Incorporated is a leading grocer with operations in six southeastern states. Headquartered in Asheville, North Carolina, the Company operates 198 supermarkets. In conjunction with its supermarket operations, the Company operates neighborhood shopping centers, most of which contain an Ingles supermarket. The Company also owns a fluid dairy facility that supplies Ingles supermarkets and unaffiliated customers. To learn more about Ingles Markets visit ingles-markets.com.

Cautionary Note Regarding Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as “anticipate,” “aim,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to, among other things: business and economic conditions generally in the Company’s operating area, including inflation or deflation; shortages of labor, distribution capacity, and some product shortages; inflation in food, labor and gasoline prices; the Company’s ability to successfully implement our expansion and operating strategies; pricing pressures and other competitive factors, including online-based procurement of products the Company sells; sudden or significant changes in the availability of gasoline and retail gasoline prices; the maturation of new and expanded stores; general concerns about food safety; the Company’s ability to manage technology and data security; the availability and terms of financing; and increases in costs, including food, utilities, labor and other goods and services significant to the Company’s operations. Detailed information about these factors and additional important factors can be found in the documents that the Company files with the Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made. The Company does not undertake an obligation to update forward-looking information, except to the extent required by applicable law.

INGLES MARKETS, INCORPORATED
(Amounts in thousands except per share data)
Unaudited Financial Highlights
Consolidated Statements of Income
		Quarter Ended						Year Ended
		Sept. 28,			Sept. 30,			Sept. 28,		Sept. 30,
		2024			2023			2024		2023
Net sales		$	1,397,529		$	1,584,995		$	5,639,609	$	5,892,782
Gross profit			299,391			369,720			1,299,835		1,404,915
Operating and administrative expenses			300,958			299,400			1,161,797		1,115,381
Gain from sale or disposal of assets			124			1,276			9,106		2,770
(Loss) income from operations			(1,443	)		71,596			147,144		292,304
Other income, net			3,675			2,978			14,217		8,269
Interest expense			5,207			5,935			21,860		22,068
Income tax (benefit) expense			(1,502	)		15,998			33,960		67,693
Net (loss) income		$	(1,473	)	$	52,641		$	105,541	$	210,812
Basic (loss) earnings per common share – Class A		$	(0.08	)	$	2.83		$	5.68	$	11.35
Diluted (loss) earnings per common share – Class A		$	(0.08	)	$	2.77		$	5.56	$	11.10
Basic (loss) earnings per common share – Class B		$	(0.07	)	$	2.57		$	5.16	$	10.32
Diluted (loss) earnings per common share – Class B		$	(0.07	)	$	2.57		$	5.16	$	10.32
Additional selected information:
Depreciation and amortization expense		$	34,091		$	29,162		$	121,623	$	115,979
Rent expense		$	2,111		$	2,731		$	9,703	$	10,592
Consolidated Balance Sheets
		Sept. 28,						Sept. 30,
		2024						2023
ASSETS
Cash and cash equivalents		$	353,688					$	328,540
Receivables-net			78,266						107,571
Inventories			462,085						493,860
Other current assets			31,509						22,586
Property and equipment-net			1,526,708						1,431,872
Other assets			75,627						89,417
TOTAL ASSETS		$	2,527,883					$	2,473,846
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt		$	17,521					$	17,527
Accounts payable, accrued expenses and current portion of other long-term liabilities			303,101						313,007
Deferred income taxes			63,767						67,187
Long-term debt			515,102						532,632
Other long-term liabilities			82,643						84,521
Total Liabilities			982,134						1,014,874
Stockholders' equity			1,545,749						1,458,972
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,527,883					$	2,473,846

 

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Ingles Markets, Inc.

Contact: Pat Jackson, Chief Financial Officer

pjackson@ingles-markets.com

(828) 669-2941 (Ext. 223)

Source: Ingles Markets, Incorporated

FAQ

How did Hurricane Helene impact IMKTA's Q4 2024 financial results?

Hurricane Helene caused $34.9M in total impairment losses, including $30.4M in inventory damage and $4.5M in property and equipment losses, contributing to a Q4 net loss of $1.5M.

What was IMKTA's net income for fiscal year 2024?

Ingles Markets reported net income of $105.5M for fiscal year 2024, down from $210.8M in fiscal year 2023.

How much did IMKTA's Q4 2024 sales decline compared to Q4 2023?

Q4 2024 sales declined to $1.40B from $1.58B in Q4 2023, noting that Q4 2024 had 13 weeks compared to 14 weeks in Q4 2023.

What were IMKTA's capital expenditures for fiscal year 2024?

Capital expenditures for fiscal year 2024 were $210.9M, an increase from $173.6M in fiscal year 2023.

How much debt does IMKTA have as of fiscal year end 2024?

IMKTA's total debt at the end of fiscal year 2024 was $532.6M, down from $550.2M at the end of fiscal year 2023.