Ingles Q1 Profits Take a Hit as Grocer Feels Effects of Hurricane Helene
The destruction caused by Hurricane Helene last year in western North Carolina has negatively affected Ingles Markets Inc.’s first quarter ending Dec. 28, 2024.
On Sept. 27, 2024, Hurricane Helene 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, and major road closures. Four Ingles stores closed due to damage sustained in the storm, of which one has reopened, while the three remaining stores are currently expected to reopen during 2025.
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 as a result of Hurricane Helene. During Q1, the company incurred approximately $5.4 million in cleanup and repair costs caused by Hurricane Helene.
Ingles’ net sales dropped 13% in its latest quarter. Net sales totaled $1.29 billion, compared with last year’s $1.48 billion. Gross profit for Q1 totaled $301.1 million, or 23.4% of sales. Last year, it was $348.8 million, a fairly similar 23.6% of sales.
The regional retailer’s latest operating and administrative expenses totaled $280.7 million, compared with last year’s $289.8 million.
Q1 net income plummeted to $16.6 million as compared to the $43.4 million achieved for the same period last year. Also taking a dive were Ingles’ basic and diluted earnings per share for Class A Common Stock, coming in at 89 cents and 87 cents, respectively. Last year they were $2.33 and $2.28, respectively.
Capital expenditures for the southeastern grocery retailer's latest quarter totaled $37.8 million, compared with last year’s $63.2 million.
Ingles' most recent interest expense totaled $5.0 million, compared with last year's $5.7 million. Total debt at the end of Q1 of fiscal 2025 was $529.4 million, compared with $546.9 million at the end of Q1 of fiscal 2024.
The grocer currently has no outstanding borrowings under its $150.0 million line of credit. The company believes that 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.
Meanwhile, North Carolina state lawmakers are preparing to spend an additional $500 million in relief for western North Carolina, laying the groundwork for their fourth aid package since Hurricane Helene and the first of 2025, as reported by NC Newsline.
Under a bill introduced by GOP lawmakers this past Wednesday in the House Select Committee on Helene Recovery, the General Assembly would move another $275 million into the state’s Helene relief fund. Together with a bill passed in December that set aside without spending more than $200 million, the total new commitment would exceed a half-billion dollars.
NC Newsline reported that although the bill funds multiple key requests outlined by Gov. Josh Stein, it falls well short of the total new spending that he had requested. Absent in the bill are several major asks, including money for business grants.
"As recovery efforts progress in the communities we support, we remain dedicated to offering value and providing a wide range of high-quality products to our customers,” noted Robert P. Ingle II, chairman of the board at Ingles. “We deeply appreciate the focus, dedication and hard work of our associates in making this possible."
Ingles operates 198 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.
