Ingles Markets Revenues Dip 5.4% Amid Hurricane Helene Recovery

TL;DR

**IMKTA is struggling to recover from Hurricane Helene, with declining revenues and operating income signaling a tough road ahead for this regional grocer.**

AI Summary

Ingles Markets, Inc. (IMKTA) reported a decline in revenues and income from operations for the fiscal year ended September 27, 2025, largely impacted by Hurricane Helene. Total revenues decreased to $5,334.0 million in 2025 from $5,639.6 million in 2024, a 5.4% reduction. Income from operations fell to $117.6 million in 2025 from $147.2 million in 2024, a 20.1% drop. The company recognized $34.9 million in impairment losses in 2024 due to Hurricane Helene, including $30.4 million for inventory and $4.5 million for property and equipment. In 2025, cleanup and repair costs totaled $9.0 million, partially offset by $6.2 million in insurance proceeds. Three stores remain temporarily closed due to hurricane damage, expected to reopen in 2026 or 2027. The company continues its renovation and expansion plan, operating 194 supermarkets and owning 174 store properties. The One Big Beautiful Bill Act (OBBB) was signed into law on July 4, 2025, but IMKTA does not anticipate a material impact on its financial statements.

Why It Matters

Ingles Markets' performance is a bellwether for regional grocery resilience, especially in the face of natural disasters like Hurricane Helene. The $34.9 million in impairment losses and ongoing repair costs highlight the significant financial and operational risks for brick-and-mortar retailers in disaster-prone areas. For investors, the decline in revenue and operating income, coupled with the extended closure of three stores, signals continued headwinds and potential delays in recovery, impacting future earnings and competitive positioning against larger chains like Kroger or Publix. Employees and customers in affected regions face uncertainty regarding store availability and job security, while the broader market watches how regional players adapt to both legislative changes like the OBBB and climate-related disruptions.

Risk Assessment

Risk Level: high — The company faces high risk due to the significant impact of Hurricane Helene, incurring $34.9 million in impairment losses in fiscal year 2024 and $9.0 million in cleanup costs in 2025. The continued temporary closure of three stores, with reopenings not expected until 2026 or 2027, indicates prolonged operational disruption and lost revenue potential.

Analyst Insight

Investors should exercise caution and monitor IMKTA's progress on store reopenings and recovery efforts closely. The ongoing operational disruptions and significant costs from Hurricane Helene suggest potential for continued underperformance, making it prudent to await clearer signs of sustained recovery before considering new positions.

Financial Highlights

revenue

$5,334.0M

operating Margin

2.2%

net Income

$109.9M

revenue Growth

-5.4%

Revenue Breakdown

Key Numbers

• $5,334.0M — Total Revenues (Decreased from $5,639.6 million in 2024, a 5.4% decline.)
• $117.6M — Income from Operations (Decreased from $147.2 million in 2024, a 20.1% decline.)
• $34.9M — Impairment Losses from Hurricane Helene (Recognized in fiscal year 2024, including $30.4 million for inventory and $4.5 million for property and equipment.)
• $9.0M — Cleanup and Repair Costs (Incurred in fiscal year 2025 due to Hurricane Helene.)
• $6.2M — Insurance Proceeds (Received in fiscal year 2025, partially offsetting cleanup costs.)
• 194 — Total Supermarkets Operated (Excluding three temporarily closed stores.)
• 72.5% — Robert P. Ingle II's Voting Power (Beneficial ownership of combined voting power.)
• 3 — Temporarily Closed Stores (Due to Hurricane Helene, expected to reopen in 2026 or 2027.)

Key Players & Entities

• Ingles Markets, Incorporated (company) — registrant
• Hurricane Helene (event) — severe impact on operations and financial results
• Robert P. Ingle II (person) — Chairman, beneficially owns 72.5% of combined voting power
• The NASDAQ Global Select Market (regulator) — exchange for Class A Common Stock
• One Big Beautiful Bill Act (regulator) — newly signed income tax legislation
• North Carolina (location) — state of incorporation and primary operating area
• U.S. Tax Cuts and Jobs Act of 2017 (regulator) — prior tax legislation referenced by OBBB
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Hurricane Helene Impact [high — operational]: Hurricane Helene caused significant damage, resulting in $34.9 million in impairment losses in 2024 and $9.0 million in cleanup and repair costs in 2025. Three stores remain closed, expected to reopen in 2026 or 2027, impacting revenue and operations.
• Competitive Pricing Pressures [medium — market]: The company faces pricing pressures and other competitive factors, including online-based procurement. This can impact sales volume and profit margins in the highly competitive grocery sector.
• Inflationary Pressures [medium — market]: Inflation in food, labor, and fuel prices can increase operating costs and potentially reduce consumer spending on discretionary items, impacting the company's profitability.
• Labor Shortages [medium — operational]: Shortages of labor can disrupt distribution capacity and product availability, leading to potential lost sales and increased operational costs.
• Economic Conditions [medium — market]: General business and economic conditions in the company's operating area, including inflation or deflation, can significantly affect consumer purchasing power and demand for the company's products.

Industry Context

Ingles Markets operates in the highly competitive U.S. grocery retail sector, characterized by pricing pressures and evolving consumer preferences, including the rise of online procurement. The industry is also susceptible to macroeconomic factors like inflation affecting food, labor, and fuel costs, as well as operational challenges such as labor shortages.

Regulatory Implications

The company noted the enactment of the One Big Beautiful Bill Act (OBBB) on July 4, 2025. While Ingles does not anticipate a material impact on its financial statements, ongoing monitoring of tax legislation and future guidance is necessary for compliance and potential strategic adjustments.

What Investors Should Do

1. Monitor store reopenings and recovery progress.
2. Assess the impact of inflationary pressures on margins.
3. Evaluate competitive positioning and market share.
4. Review the impact of the OBBB on future tax liabilities.

Key Dates

• 2024-09-27: Hurricane Helene Impact — Resulted in $34.9 million in impairment losses (inventory and property/equipment) and temporary store closures, impacting 2024 results.
• 2025-07-04: One Big Beautiful Bill Act (OBBB) Signed — Reinstated tax provisions, but the company does not anticipate a material impact on its financial statements.
• 2025-09-27: Fiscal Year End 2025 — Reported $5,334.0 million in revenues and $117.6 million in income from operations, with $9.0 million in cleanup costs from Hurricane Helene.
• 2026-2027: Expected Reopening of Closed Stores — Three stores damaged by Hurricane Helene are anticipated to reopen, potentially restoring lost revenue streams.

Glossary

Impairment Losses

A reduction in the carrying value of an asset when its recoverable amount falls below its book value. For Ingles, this was due to Hurricane Helene damaging inventory and property. (Significant $34.9 million charge in 2024 directly attributable to hurricane damage.)

Income from Operations

A measure of a company's profit after deducting operating expenses from its revenue, before accounting for interest and taxes. It reflects the profitability of the core business. (Decreased by 20.1% to $117.6 million in 2025, largely due to hurricane-related costs and revenue impacts.)

One Big Beautiful Bill Act (OBBB)

A legislative act signed into law on July 4, 2025, that modified various U.S. income tax provisions, including R&D expenditures and bonus depreciation. (While enacted, the company does not expect a material financial impact, but it could affect future tax strategies.)

Supermarket Chain

A retail store that primarily sells food and household items, operating under a single brand or a group of related brands. (Ingles Markets operates 194 supermarkets in the southeastern United States, forming its primary business.)

Fiscal Year

A 12-month period that a company uses for accounting purposes. Ingles Markets' fiscal year ends on the last Saturday in September. (The reporting periods for financial results, with 2025 and 2024 having 52 weeks, and 2023 having 53 weeks.)

Year-Over-Year Comparison

Total revenues for fiscal year 2025 decreased by 5.4% to $5,334.0 million from $5,639.6 million in 2024. Income from operations saw a more significant decline of 20.1%, falling to $117.6 million from $147.2 million, primarily due to the impact of Hurricane Helene, which caused $34.9 million in impairment losses in 2024 and $9.0 million in cleanup costs in 2025. New risks related to the ongoing recovery from Hurricane Helene and inflationary pressures are prominent.

Key Financial Figures

• $0.05 — hich registered Class A Common Stock, $0.05 par value per share IMKTA The NASDA
• $30.4 million — Company recognized impairment losses of $30.4 million related to inventory and $4.5 million r
• $4.5 million — $30.4 million related to inventory and $4.5 million related to property and equipment, in e
• $9.0 million — 025, the Company incurred approximately $9.0 million in cleanup and repair costs and receive
• $6.2 million — eceived aggregate insurance proceeds of $6.2 million. Legislative Update On July 4, 2025
• $34.9 million — airment losses from Hurricane Helene of $34.9 million for fiscal year ended September 28, 202

Filing Documents

• imkt-20250927x10k.htm (10-K) — 4263KB
• imkt-20250927xex31_1.htm (EX-31.1) — 19KB
• imkt-20250927xex31_2.htm (EX-31.2) — 19KB
• imkt-20250927xex32_1.htm (EX-32.1) — 10KB
• imkt-20250927xex32_2.htm (EX-32.2) — 9KB
• imkt-20250927x10kg001.jpg (GRAPHIC) — 42KB
• 0000050493-25-000019.txt ( ) — 13640KB
• imkt-20250927.xsd (EX-101.SCH) — 54KB
• imkt-20250927_cal.xml (EX-101.CAL) — 101KB
• imkt-20250927_def.xml (EX-101.DEF) — 194KB
• imkt-20250927_lab.xml (EX-101.LAB) — 440KB
• imkt-20250927_pre.xml (EX-101.PRE) — 379KB
• imkt-20250927x10k_htm.xml (XML) — 2936KB

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 11 Item 1B. Unresolved Staff Comments 14 Item 1C. Cybersecurity 14 Item 2.

Properties

Properties 16 Item 3.

Legal Proceedings

Legal Proceedings 16 Item 4. Mine Safety Disclosures 17 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 17 Item 6. [Reserved] 19 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 25 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 26 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 26 Item 9A.

Controls and Procedures

Controls and Procedures 26 Item 9B. Other Information 27 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 27 PART III Item 10. Directors, Executive Officers and Corporate Governance 27 Item 11.

Executive Compensation

Executive Compensation 28 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 28 Item 13. Certain Relationships and Related Transactions, and Director Independence 28 Item 14. Principal Accountant Fees and Services 28 PART IV Item 15. Exhibits and Financial Statement Schedules 28 Item 16. Form 10-K Summary 30 Report of Independent Registered Public Accounting Firm PCAOB ID No. 34 31 3 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K of Ingles Markets, Incorporated ("Ingles" or the "Company") contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact included in this Annual Report on Form 10-K, including the statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business" and elsewhere regarding the Company's strategy, future operations, financial position, estimated revenues, projected costs, projections, prospects, plans and objectives of management, are forward - looking statements. The words "expect", "anticipate", "intend", "plan", "likely", "goal", "believe", "seek", "will", "may", "would", "should" and similar expressions are intended to identify forward-looking statements. While these forward-looking statements and the related assumptions are made in good faith and reflect the Company's current judgment regarding the direction of the Company's business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested or described by such forward-looking statements. Such statements are based upon a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, many of which are beyond the Company's control. Some of these assumptions inevitably

BUSINESS

Item 1. BUSINESS General Ingles Markets, Incorporated, a North Carolina corporation (collectively with its subsidiaries, "Ingles," or the "Company," "we," "us" or "our"), is a leading supermarket chain in the southeast United States and operates a total of 194 supermarkets in North Carolina (72), Georgia (64), South Carolina (35), Tennessee (21), Virginia (1) and Alabama (1), excluding three stores that remain temporarily closed due to damage sustained during Hurricane Helene. 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 and destruction, power and communication outages, water outages, major road closures, and loss of life. For the year ended September 28, 2024, the Company recognized impairment losses of $30.4 million related to inventory and $4.5 million related to property and equipment, in each case that was damaged or destroyed by Hurricane Helene. These recorded losses do not include future repairs and rebuilds, nor did they account for revenue lost due to store closures or electronic payment disruptions. The Company's properties, including its distribution center, were impacted; however, the distribution center returned to full operation within two weeks following the storm. Four stores sustained damage that required that they be temporarily closed, of which, as of the date of this Annual Report on Form 10-K, three remain closed and are currently expected to reopen at various times during 2026 or in 2027. In addition, for the year ended September 27, 2025, the Company incurred approximately $9.0 million in cleanup and repair costs and received aggregate insurance proceeds of $6.2 million. Legislative Update On July 4, 2025, the One Big Beautiful Bill Act ("OBBB") was signed into law. The OBBB reinstated several key income tax provisions that were initially part of the U.S. Tax Cuts and

Business

Business The Company operates one primary business segment, retail grocery, on a 52- or 53-week fiscal year ending on the last Saturday in September. The consolidated statements of income for the fiscal years ended September 27, 2025 and September 28, 2024 each consisted of 52 weeks of operations. The consolidated statements of income for the fiscal year ended September 30, 2023 had 53 weeks. Income from operations for the primary business segment, retail grocery sales, included the charges for impairment losses from Hurricane Helene of $34.9 million for fiscal year ended September 28, 2024. For fiscal year 2025, our expense allocation methodology changed to include direct and indirect costs associated with the shopping center rentals that were previously included in the retail segment. Fiscal years 2024 and 2023 have been recast to be comparable. Information about the Company's operations is as follows (for information regarding the Company's industry segments, see Note 11, "Segment Information" to the Consolidated Financial Statements contained in this Annual Report on Form 10-K): Fiscal Years Ended (dollars in millions) September 27, 2025 September 28, 2024 September 30, 2023 Revenues from unaffiliated customers: Grocery $ 1,934.4 $ 1,983.2 $ 2,062.4 Non-foods 1,167.6 1,273.3 1,326.9 Perishables 1,404.7 1,441.1 1,482.1 Fuel 620.9 724.2 792.5 Total retail 5,127.6 96.1% 5,421.8 96.1% 5,663.9 96.1% Other revenues 206.4 3.9% 217.8 3.9% 228.9 3.9% $ 5,334.0 100.0% $ 5,639.6 100.0% $ 5,892.8 100.0% Income from operations: Retail $ 100.5 85.5% $ 131.0 89.0% $ 271.2 92.8% Income from all other 17.1 14.5% 16.2 11.0% 21.1 7.2% 117.6 100.0% 147.2 100.0% 292.3 100.0% Other income, net 12.0 14.2 8.3 Interest expense 19.7 21.9 22.1 Income before income taxes $ 109.9 $ 139.5 $ 278.5 The "Grocery" catego

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