Ingles Markets Inc. faced notable financial challenges in its fourth quarter for the fiscal year ending on September 28, 2024. With net sales recorded at $1.40 billion, the company experienced a drop from $1.58 billion in the same period the previous year. This decrease can partly be attributed to a different accounting period; the latest quarter included 13 weeks, while the previous one spanned 14 weeks.
The gross profit for this quarter amounted to $299.4 million, representing 21.4% of sales. This was a decline from the prior year’s gross profit of $369.7 million, or 23.3% of sales. The most significant change, however, was the net loss incurred, totaling $1.5 million compared to a net income of $52.6 million for the same quarter last year.
For Class A Common Stock, the basic and diluted losses per share stood at 8 cents for the quarter that ended September 28, 2024. This starkly contrasts with basic and diluted earnings per share of $2.83 and $2.77, respectively, for the last quarter of the previous year. Similarly, Class B Common Stock also reported losses of 7 cents per share against earnings of $2.57 the prior year.
A critical factor influencing these results was the impact of Hurricane Helene, which severely hit western North Carolina, including the area where Ingles has its headquarters. This disaster caused extensive flooding, leading to power and communication disruptions, water outages, and significant road closures. As a result, Ingles recognized an impairment loss of $30.4 million due to inventory damages and another property and equipment impairment loss of $4.5 million for the quarter. Estimates suggested the financial impact from the hurricane would be between $35 million and $55 million, with expectations of receiving $10 million to $15 million from insurance reimbursements.
Robert P. Ingle II, Chairman of the Board, shared sentiments of pride in the community’s response and the company’s associates, stating, “After Hurricane Helene impacted our communities, I am proud of how not only our associates came together, but our entire region.”
On a broader scale, for the fiscal year ended September 28, 2024, Ingles’ total net sales reached $5.64 billion, down from $5.89 billion in the previous year. The fiscal year under review also included 52 weeks, compared to 53 weeks the previous year. The gross profit for the entire fiscal year was $1.3 billion, which accounted for 23.1% of sales, reflecting a decrease from $1.4 billion or 23.8% of sales in the previous year. The annual net income saw a significant drop as well, totaling $105.5 million compared to $210.8 million for the fiscal year ended September 30, 2023.
Per financial reports, basic and diluted earnings per share for Class A Common Stock for the year concluded at $5.68 and $5.56, respectively, dropping from $11.35 and $11.10 in the previous fiscal year. Furthermore, Class B Common Stock saw a decrease to $5.16 per share from $10.32.
Despite the adverse results, the company reported capital expenditures of $210.9 million for the fiscal year, up from $173.6 million the prior year. Ingles is confident that it has sufficient financial resources, including a line of credit, to meet its planned capital expenditures, debt service, and working capital needs in the near future.
Ingles also faced compliance challenges with the Nasdaq Stock Market, having received a notice due to the delay in filing its annual report on Form 10-K. The company attributed this delay to the aftermath of Hurricane Helene but aims to file the report within the forthcoming 60-day period to rectify the situation.
Based in Asheville, North Carolina, Ingles operates 198 supermarkets across six southeastern states, alongside neighborhood shopping centers that often host its supermarkets. The company also owns a fluid-dairy facility supporting its operations. Ingles proudly secured the 54th position in Progressive Grocer’s list of top food and consumables retailers in North America for 2024.
These financial results reflect not only the immediate impacts of a natural disaster but also wider economic realities affecting grocery retailers in today’s climate. The ability to rebound and adapt will be critical for Ingles as it navigates through these challenges in the retail landscape.