Executive Summary

Q2 FY2025 net sales were $1.33B, down 2.7% YoY, with gross margin stable at 23.4%; diluted EPS (Class A) was $0.80 versus $1.68 in Q2 FY2024 as net income declined to $15.1M from $31.9M, driven by higher opex and the absence of last year’s $7.7M asset sale gain .
Sequentially, revenue increased 3.4% from Q1 FY2025 ($1.29B to $1.33B), while diluted EPS eased from $0.87 to $0.80 and net income from $16.6M to $15.1M, reflecting modest deleveraging on stable gross margin .
Liquidity remained strong: cash was $297.3M at quarter-end; total debt declined to $521.6M, and the Board declared a quarterly dividend of $0.165 for Class A/$0.15 for Class B payable July 17, 2025 (annual rate $0.66/$0.60) .
Wall Street consensus (S&P Global) for Q2 FY2025 EPS and revenue was unavailable; focus shifts to operational recovery from Hurricane Helene and store reopenings expected in 2025/2026 as potential stock catalysts .

What Went Well and What Went Wrong

What Went Well

Gross margin held steady at 23.4% despite softer sales, showing merchandising discipline and pricing stability .
Interest expense fell to $4.9M from $5.6M YoY, supporting lower financing costs amid debt reduction .
Management reiterated strong liquidity and funding capacity for capex and working capital; capex in H1 totaled $62.0M, with stores damaged by Hurricane Helene expected to reopen during 2025/2026 .

What Went Wrong

Net sales declined 2.7% YoY to $1.33B; net income halved YoY to $15.1M as operating and administrative expenses increased and last year benefited from asset sale gains .
Sequentially, EPS slipped from $0.87 (Q1) to $0.80 (Q2) as operating income decreased from $23.6M to $21.6M, reflecting opex pressure and limited operating leverage on stable gross margin .
Continuing storm-related impacts: three of four stores remained closed at quarter-end, with prior quarter noting $55–$65M revenue lost and ~$5.4M cleanup costs immediately following Hurricane Helene .

Financial Results

Sequential comparison (oldest → newest: Q4 FY2024, Q1 FY2025, Q2 FY2025)

Metric	Q4 FY2024	Q1 FY2025	Q2 FY2025
Net Sales ($USD Billions)	$1.398	$1.288	$1.331
Gross Profit ($USD Millions)	$299.4	$301.1	$311.0
Gross Margin (%)	21.4%	23.4%	23.4%
Operating & Admin Expenses ($USD Millions)	$301.0	$280.7	$289.1
Income from Operations ($USD Millions)	$(1.4)	$23.6	$21.6
Net Income ($USD Millions)	$(1.5)	$16.6	$15.1
Diluted EPS – Class A ($USD)	$(0.08)	$0.87	$0.80
Interest Expense ($USD Millions)	$5.2	$5.0	$4.9
Depreciation & Amortization ($USD Millions)	$34.1	$30.9	$30.6
Rent Expense ($USD Millions)	$2.1	$1.7	$2.0

Year-over-year comparison (Q2 FY2024 vs Q2 FY2025)

Metric	Q2 FY2024	Q2 FY2025
Net Sales ($USD Billions)	$1.367	$1.331
Gross Profit ($USD Millions)	$321.9	$311.0
Gross Margin (%)	23.5%	23.4%
Operating & Admin Expenses ($USD Millions)	$284.8	$289.1
(Loss)/Gain on Asset Sales ($USD Millions)	$7.7	$(0.2)
Net Income ($USD Millions)	$31.9	$15.1
Diluted EPS – Class A ($USD)	$1.68	$0.80
Interest Expense ($USD Millions)	$5.6	$4.9

Balance sheet and liquidity KPIs

Metric	Q4 FY2024	Q1 FY2025	Q2 FY2025
Cash & Cash Equivalents ($USD Millions)	$353.7	$269.5	$297.3
Inventories ($USD Millions)	$462.1	$490.8	$491.2
Total Debt ($USD Millions)	$532.6	$529.4	$521.6
Stockholders’ Equity ($USD Millions)	$1,545.7	$1,561.6	$1,571.8

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal Revenue/EPS Guidance	FY2025	Not provided	Not provided	Maintained (no formal guidance)
Capital Expenditures	FY2025	Not quantified in Q2	Company states resources sufficient to meet planned capex; H1 FY2025 capex $62.0M	Maintained qualitative stance
Dividend (Cash)	Q3 FY2025 payable 7/17/2025	Not disclosed prior in Q2 docs	$0.165 per Class A; $0.15 per Class B; annual $0.66/$0.60; record date 7/10/2025	Declared
Store Reopenings (Helene)	2025–2026	3 stores closed at 12/28/2024 with reopen expected in 2025	3 stores remained closed at 3/29/2025; expected to reopen during 2025/2026	Maintained trajectory

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 FY2025; themes below reflect press releases and 8-K disclosures.

Topic	Previous Mentions (Q4 FY2024, Q1 FY2025)	Current Period (Q2 FY2025)	Trend
Hurricane Helene impact & recovery	Impairment: $30.4M inventory + $4.5M property; 4 stores closed; DC back to normal	3 stores remained closed; reopen expected 2025/2026	Improving operations; lingering closures
Revenue disruption from storm	Estimated $55–$65M revenue lost immediately post-storm; ~$5.4M cleanup costs in Q1	Sales down 2.7% YoY; sequential recovery from Q1	Sequential stabilization
Liquidity & leverage	Total debt $532.6M; line of credit fully available	Debt down to $521.6M; continued access to LoC and funding sources	Deleveraging
Capex	FY2024 capex $210.9M	H1 FY2025 capex $62.0M; resources sufficient to fund planned capex	Moderating capex pace
Workforce & customer value narrative	Emphasis on associates and community support	Continued focus on delivering value; appreciation for associates	Consistent tone

Management Commentary

“We continue to support our stores and thank our associates for their hard work delivering value to our customers.” — Robert P. Ingle II, Chairman .
“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.” — Robert P. Ingle II (Q1 FY2025) .
“We appreciate our associates as they continue to deliver value and a great shopping experience for our customers.” — Robert P. Ingle II (Q3 FY2025) .

Q&A Highlights

No Q2 FY2025 earnings call transcript was available; therefore, no Q&A themes or clarifications were disclosed in primary-source materials [ListDocuments 0 results].

Estimates Context

S&P Global Wall Street consensus estimates for Q2 FY2025 EPS and revenue were not available for IMKTA at the time of review; actuals reported were revenue $1.33B and diluted EPS (Class A) $0.80 .
With consensus unavailable, we expect limited estimate-driven stock reaction; focus is on sequential stabilization, margin resilience, and hurricane recovery milestones .
S&P Global note: Consensus estimates for “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and “EBITDA Consensus Mean” were unavailable; actuals captured reflect reported figures (Revenue and EBITDA actuals shown; no consensus values returned). Values retrieved from S&P Global.*

Key Takeaways for Investors

Margin resilience: Gross margin held at 23.4% despite softer sales, indicating merchandising/pricing discipline; watch mix and promotional cadence for sustained margin health .
Sequential top-line improvement: Revenue rebounded 3.4% vs Q1, suggesting normalization post-storm disruptions; monitor traffic and basket trends as closed stores reopen .
Operating leverage remains constrained: Opex pressure and reduced “other” benefits (e.g., asset sale gain last year) limited EPS; look for cost controls and efficiency gains to restore operating margin .
Strong liquidity/deleveraging: Cash of $297.3M and total debt at $521.6M provide flexibility for capex and recovery; balance sheet supports dividend continuity .
Recovery catalyst: Reopening timelines for three closed stores in 2025/2026 could lift sales density and fixed-cost absorption over the next 12–18 months .
Limited estimate visibility: With consensus sparse, price action may hinge on company-specific updates (store reopenings, capex pace, gross margin trajectory) rather than beat/miss dynamics .
Medium-term thesis: A stable regional grocer with improving cost of capital trends and liquidity; execution on store reopenings and opex discipline are key to EPS normalization post-Helene .

Additional Data Points (for reference)

Q2 FY2025 condensed P&L (selected): net sales $1.331B; gross profit $311.0M; operating & admin expenses $289.1M; income from operations $21.6M; interest expense $4.9M; net income $15.1M; diluted EPS (Class A) $0.80 .
H1 FY2025: net sales $2.619B (−8.0% YoY); gross profit $612.1M; opex $569.9M; net income $31.7M; H1 capex $62.0M .
Dividend: $0.165/Class A and $0.15/Class B declared; payable 7/17/2025 to shareholders of record 7/10/2025 (annual rate $0.66/$0.60) .

INGLES MARKETS INC (IMKTA)·Q2 2025 Earnings Summary