Ingles posts higher sales but lower profits
Ingles Markets reports higher sales but lower profits due to rising operating costs in fiscal 2026. Discover key financial trends.
Ingles Markets reported a small rise in third-quarter sales for fiscal 2026, though higher operating costs reduced net income compared to last year.
The grocer, based in Asheville, North Carolina, posted net sales of $1.37 billion for the quarter ended June 27, an increase from $1.35 billion in the same period last year. Net income fell to $25.9 million from $26.2 million in the prior-year quarter.
Margins hold steady as expenses climb
Gross profit stayed at 24.3% of sales in both quarters, totaling $332.4 million this year versus $327.3 million last year. The increase was offset by higher operating and administrative expenses, which rose to $298 million from $290.1 million.
Interest expense dropped to $4.5 million from $4.9 million in the same quarter of 2025. Earnings per share reflected the mixed outcome: Class A basic and diluted shares declined to $1.39 and $1.36, respectively, from $1.41 and $1.38 a year ago. Class B shares decreased to $1.27 from $1.28.
Robert P. Ingle II, chairman of the board, described the results as encouraging. He thanked employees for their focus on customer experience while maintaining value, selection, and quality.
Year-to-date performance outpaces the quarter
Nine-month figures showed stronger growth. Net sales reached $4.05 billion, up from $3.97 billion in the prior-year period, while net income increased by 35% to $78.3 million from $57.9 million. Gross profit improved to $992.3 million, or 24.5% of sales, from $939.4 million, or 23.7%.
Operating expenses grew to $884.6 million from $860 million, but the expanded margin covered the rise. Class A basic and diluted earnings per share climbed to $4.21 and $4.12, up from $3.11 and $3.05. Class B shares rose to $3.83 from $2.83.
Total debt fell to $500.5 million as of June 27, down from $518 million a year earlier. Interest expense for the nine-month period decreased to $13.6 million from $14.7 million.
The company spent $76.4 million on capital expenditures in the first nine months, less than the $91.4 million in the same period last year. Full-year spending is projected between $120 million and $130 million, leaving $44 million to $54 million for the fourth quarter.
Store count dips, hurricane recovery continues
Ingles now operates 195 supermarkets across six southeastern states, down from 197 earlier in the fiscal year. Three of the four locations closed due to Hurricane Helene damage remain shut, with reopenings scheduled for 2026 and 2027.
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The chain also manages neighborhood shopping centers, most anchored by its stores, and a fluid dairy that supplies both internal and external customers. Its $150 million line of credit had a single $900,000 letter of credit outstanding, with no other borrowings.
These results came in the second full quarter after activist investor Summer Road LLC gained a board seat for Rory Held in April. The firm, representing the family investment office of David Sackler, had argued during the proxy fight that the company’s improving numbers benefited from weak comparisons to earlier years. It pointed out that first-quarter sales still lagged pre-Helene fiscal 2024 levels by 7.3%.
Cost control may determine whether the trend continues. The latest quarter demonstrated how modest revenue gains can disappear under rising expenses, a risk that could return if inflation affects wages or supply chains. The year-to-date figures provide some confidence, but the next quarter will reveal if the company can maintain its margin improvements without additional store closures or disruptions.
Balancing price competition with operational efficiency will shape Ingles Markets’ performance in the coming months. Debt remains manageable, though the hurricane-damaged stores add uncertainty to the recovery timeline.
The company’s ability to sustain progress depends on steady cost management.
