INGLES MARKETS INC
For the period ended Mar 28, 2026. Filed May 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 28, 2026 · Filed May 7, 2026
IMKTA$82.25-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-27; filed 2026-02-05.
0000050493-26-000010
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-28; filed 2026-05-07.
0000050493-26-000013
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 66 previous paragraphs and 82 current paragraphs.
34 unchanged; 28 reworded; 16 added; 4 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 4 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Net income for the second quarter of fiscal 2026 totaled $24.3 million, compared with net income of $15.1 million for the second quarter of fiscal 2025. This increase related to decreased cost of goods sold and increased vendor income offset by increased expenses, as described below.
Current report
Net Sales. Net sales decreased by $23.4 million, or 1.8%, to $1.31 billion for the three months ended March 28, 2026 compared to $1.33 billion for the three months ended March 29, 2025. The Medicare maximum fair price (MFP) change that became effective on January 1, 2026 reduced drug prices for 10 drugs. The impact of the MFP change resulted in a decrease in sales. Excluding fuel sales, total grocery comparable store sales decreased 1.6% over the comparative fiscal quarter. Ingles operated 194 stores at March 28, 2026 and March 29, 2025, excluding three stores damaged by Hurricane Helene that remained closed at March 28, 2026 and March 29, 2025.
Current report
Salaries and wages increased due to overall increased cost to attract and retain associates in the Company’s market area.
Current report
Insurance expense decreased due to lower claim volume for our self-insured employee benefit plans
Current report
Loss or Gain from Sale or Disposal of Assets. Gain from the sale or disposal of assets totaled $0.4 million for the three months ended March 28, 2026. Loss from the sale or disposal of assets totaled $0.2 million for the three months ended March 29, 2025.
Current report
Six Months Ended March 28, 2026 Compared to the Six Months Ended March 29, 2025
Current report
Gross Profit. Gross profit for the six months ended March 28, 2026 totaled $659.8 million, an increase of $47.7 million, or 7.8%, compared with gross profit of $612.1 million for the six months ended March 29, 2025. Gross profit as a percentage of sales was 24.6% and 23.4% for the six months ended March 28, 2026 and March 29, 2025, respectively.
Current report
Operating and Administrative Expenses. Operating and administrative expenses increased by $16.7 million, or 2.9%, to $586.6 million for the six months ended March 28, 2026, from $569.9 million for the six months ended March 29, 2025. As a percentage of sales, operating and administrative expenses were 21.9% and 21.8% for the March 2026 and March 2025 six-month periods, respectively.
Current report
Miscellaneous expenses included costs associated with closed projects and additional fees associated with annual shareholder meeting. Prior year expenses were offset by $1.5 million of insurance proceeds from property loss due to Hurricane Helene and $0.7 million for straight line rent credits from the purchase of a ground lease.
Current report
Bank charges increased due to merchant processing fees associated with increased volume of credit card transactions.
Current report
Professional fees decreased due to reduced fees associated with technology transformation projects ongoing services.
Current report
Gain from Sale or Disposal of Assets. Gain from the sale or disposal of assets totaled $0.4 million for the six months ended March 28, 2026, as compared to $3.0 million for the six months ended March 29, 2025.
Current report
Interest Expense. Interest expense totaled $9.1 million for the six months ended March 28, 2026 compared with $9.9 million for the six months ended March 29, 2025. The decrease related primarily to lower interest rates applicable to our variable rate indebtedness. Total debt at March 28, 2026 was $503.8 million compared with $521.6 million at March 29, 2025.
Current report
Net Income. Net income totaled $52.4 million for the six months ended March 28, 2026 compared with $31.7 million for the six months ended March 29, 2025. Basic and diluted earnings per share for Class A Common Stock were $2.82 and $2.76, respectively, for the six months ended March 28, 2026, compared to $1.70 and $1.67, respectively, for the six months ended March 29, 2025. Basic and diluted earnings per share for Class B Common Stock were each $2.56 for the six months ended March 28, 2026 compared with $1.55 for the six months ended March 29, 2025.
Current report
Liquidity and Cash Flows
Current report
The Company generated $122.2 million net cash from operations for the six months ended March 28, 2026 compared with $19.4 million for the six months ended March 29, 2025. Cash from operations increased by $102.8 million due tohigher net income for the six months ended March 28, 2026 compared with the six months ended March 29, 2025 and decreases in working capital needs primarily related to replenishment of inventory in the prior year due to Hurricane Helene.
Removed paragraphs (4)
Previous report
Insurance expense increased due to the increased claim volume and higher number of covered members reaching stop loss limits.
Previous report
Bank charges increased due to decreased activity in the prior year related to loss of internet connectivity after the storm, which temporarily disrupted the ability to accept credit and debit cards.
Previous report
Liquidity
Previous report
The Company provided $38.4 million net cash for operations for the three months ended December 27, 2025 compared with $43.6 million used for the three months ended December 28, 2024. The increase was primarily attributable to higher net income and lower working capital needs.
Reworded paragraphs (28)
Previous wording
Ingles, a leading supermarket chain in the Southeast, currently operates 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.
Current wording
Ingles, a leading supermarket chain in the Southeast, operates 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.
Previous wording
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 an impairment loss of $30.4 million related to inventory damaged or destroyed by Hurricane Helene. Additionally, the Company recognized a property and equipment impairment loss of $4.5 million for the year ended September 28, 2024 pertaining to the same storm, for which insurance proceeds of $1.0 million were received during October 2024. These recorded losses did 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. As of the date of this Quarterly Report on Form 10-Q, three stores remain closed and are expected to reopen at various times during 2026 and 2027. In addition, during the quarter ended December 27, 2025, the Company incurred approximately $5.4 million in cleanup and repair costs as a result of Hurricane Helene.
Current wording
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 an impairment loss of $30.4 million related to inventory damaged or destroyed by Hurricane Helene, for which insurance proceeds of $4.7 million were received during fiscal year 2025. Additionally, the Company recognized a property and equipment impairment loss of $4.5 million for the year ended September 28, 2024 pertaining to the same storm, for which insurance proceeds of $1.5 million were received during fiscal year 2025.
Previous wording
The Company is self-insured for workers’ compensation, general liability and group medical and dental benefits. Risks and uncertainties are associated with self-insurance; however, the Company has limited its exposure by maintaining excess liability coverage of $1.0 million per occurrence for workers’ compensation and for general liability, and $500,000 per covered person for medical care benefits for a policy year. Self-insurance liabilities are established based on claims filed and estimates of claims incurred but not reported. The estimates are based on data provided by the respective claims administrators which is then applied to appropriate actuarial methods. These estimates can fluctuate if historical trends are not accurately predictive of the future. The majority of the Company’s properties are self-insured for casualty losses and business interruption; however, the Company maintains liability coverage. At December 27, 2025, the Company’s self-insurance reserves totaled $36.8 million. This amount included $3.1 million of expected self-insurance recoveries from excess cost insurance or other sources that were recorded as a receivable.
Current wording
The Company is self-insured for workers’ compensation, general liability and group medical and dental benefits. Risks and uncertainties are associated with self-insurance; however, the Company has limited its exposure by maintaining excess liability coverage of $1.0 million per occurrence for workers’ compensation and for general liability, and $650,000 per covered person for medical care benefits for a policy year. Self-insurance liabilities are established based on claims filed and estimates of claims incurred but not reported. The estimates are based on data provided by the respective claims administrators which is then applied to appropriate actuarial methods. These estimates can fluctuate if historical trends are not predictive of the future. The majority of the Company’s properties are self-insured for casualty losses and business interruption; however, the Company maintains liability coverage. At March 28, 2026, the Company’s self-insurance reserves totaled $36.0 million. This amount included $3.2 million of expected self-insurance recoveries from excess cost insurance or other sources that are recorded as a receivable.
Previous wording
The Company accounts for the impairment of long-lived assets in accordance with FASB ASC Topic 360. Asset groups are primarily composed of our individual stores and shopping center properties. For assets to be held and used, the Company tests for impairment using undiscounted cash flows and calculates the amount of impairment using discounted cash flows. For assets held for sale, impairment is recognized based on the excess of remaining book value over expected recovery value. The recovery value is the fair value as determined by independent quotes or expected sales prices developed by internal associates, net of costs to sell. Estimates of future cash flows and expected sales prices are judgments based upon the Company’s experience and knowledge of local operations and cash flows that are projected for several years into the future. These estimates can fluctuate significantly due to changes in real estate market conditions, the economic environment, capital spending decisions and inflation. The Company monitors the carrying value of long-lived assets for potential impairment each quarter based on whether any indicators of impairment have occurred. There were no asset impairments during the three-month period ended December 27, 2025.
Current wording
The Company accounts for the impairment of long-lived assets in accordance with FASB ASC Topic 360. Asset groups are primarily composed of our individual stores and shopping center properties. For assets to be held and used, the Company tests for impairment using undiscounted cash flows and calculates the amount of impairment using discounted cash flows. For assets held for sale, impairment is recognized based on the excess of remaining book value over expected recovery value. The recovery value is the fair value as determined by independent quotes or expected sales prices developed by internal associates, net of costs to sell. Estimates of future cash flows and expected sales prices are judgments based upon the Company’s experience and knowledge of local operations and cash flows that are projected for several years into the future. These estimates can fluctuate significantly due to changes in real estate market conditions, the economic environment, capital spending decisions and inflation. The Company monitors the carrying value of long-lived assets for potential impairment each quarter based on whether any indicators of impairment have occurred. There were no asset impairments during the six-month period ended March 28, 2026.
Previous wording
The Company receives funds for a variety of merchandising activities from the many vendors whose products the Company buys for resale in its stores. These incentives and allowances are primarily composed of volume or purchase based incentives, advertising allowances, slotting fees, and promotional discounts. The purpose of these incentives and allowances is generally to help defray the costs incurred by the Company for stocking, advertising, promoting and selling the applicable vendor’s products. These allowances generally relate to short term arrangements with vendors, often relating to a period of one month or less, and are negotiated on a purchase-by-purchase or transaction-by-transaction basis. Whenever practical, vendor discounts and allowances that relate to buying and merchandising activities are recorded as a component of item cost in inventory and recognized in merchandise costs when the item is sold. Due to the use of the retail method of store inventory and the nature of certain allowances, it is sometimes not practicable to apply allowances to the item cost of inventory. In those instances, the allowances are applied as a reduction of merchandise costs using a rational and systematic methodology, which results in the recognition of these incentives when the inventory related to the vendor consideration received is sold. Vendor allowances applied as a reduction of merchandise costs totaled $38.4 million and $35.1 million for the fiscal quarters ended December 27, 2025 and December 28, 2024, respectively. Vendor advertising allowances that represent a reimbursement of specific identifiable incremental costs of advertising the vendor’s specific products are recorded as a reduction to the related expense in the period in which the related expense is incurred. Vendor advertising allowances recorded as a reduction of advertising expense totaled $2.4 million and $1.3 million for the fiscal quarters ended December 27, 2025 and December 28, 2024, respectively.
Current wording
The Company receives funds for a variety of merchandising activities from the many vendors whose products the Company buys for resale in its stores. These incentives and allowances are primarily composed of volume or purchase based incentives, advertising allowances, slotting fees, and promotional discounts. The purpose of these incentives and allowances is generally to help defray the costs incurred by the Company for stocking, advertising, promoting and selling the applicable vendor’s products. These allowances generally relate to short term arrangements with vendors, often relating to a period of one month or less, and are negotiated on a purchase-by-purchase or transaction-by-transaction basis. Whenever practical, vendor discounts and allowances that relate to buying and merchandising activities are recorded as a component of item cost in inventory and recognized in merchandise costs when the item is sold. Due to the use of the retail method of store inventory and the nature of certain allowances, it is sometimes not practicable to apply allowances to the item cost of inventory. In those instances, the allowances are applied as a reduction of merchandise costs using a rational and systematic methodology, which results in the recognition of these incentives when the inventory related to the vendor consideration received is sold. Vendor allowances applied as a reduction of merchandise costs totaled $38.2 million and $36.4 million for the fiscal quarters ended March 28, 2026 and March 29, 2025, respectively. For the six-month periods ended March 28, 2026 and March 29, 2025, vendor allowances applied as a reduction of merchandise costs totaled $76.6 million and $71.5 million, respectively. Vendor advertising allowances that represent a reimbursement of specific identifiable incremental costs of advertising the vendor’s specific products are recorded as a reduction to the related expense in the period in which the related expense is incurred. Vendor advertising allowances recorded as a reduction of advertising expense totaled $2.4 million for both fiscal quarters ended March 28, 2026 and March 29, 2025. For the six-month periods ended March 28, 2026 and March 29, 2025, vendor advertising allowances recorded as a reduction of advertising expense totaled $4.8 million and $3.7 million, respectively.
Previous wording
Ingles operates on a 52 or 53-week fiscal year ending on the last Saturday in September. The Condensed Consolidated Statements of Income for the three-month periods ended December 27, 2025 and December 28, 2024 both include 13 weeks of operations. Comparable store sales are defined as sales by retail stores in operation for five full fiscal quarters. Sales from replacement stores, major remodels and the addition of fuel stations to existing stores are included in the comparable store sales calculation from the date thereof. A replacement store is a newly opened store that replaces an existing nearby store that has closed. A major remodel entails substantial remodeling of an existing store and includes additional retail square footage. For the three-month period ended December 27, 2025, comparable store sales included 194 stores, which excludes the three stores that remained closed due to the impact of Hurricane Helene. For the three-month period ended December 28, 2024, comparable store sales included 195 stores, which excluded the three stores that remained closed due to the impact of Hurricane Helene.
Current wording
Ingles operates on a 52 or 53-week fiscal year ending on the last Saturday in September. The Condensed Consolidated Statements of Income for the three and six-month periods ended March 28, 2026 and March 29, 2025 both include 13 and 26 weeks of operations, respectively. Comparable store sales are defined as sales by retail stores in operation for five full fiscal quarters. Sales from replacement stores, major remodels and the addition of fuel stations to existing stores are included in the comparable store sales calculation from the date thereof. A replacement store is a newly-opened store that replaces an existing nearby store that has closed. A major remodel entails substantial remodeling of an existing store and includes additional retail square footage. For the three- and six-month periods ended March 28, 2026 and March 29, 2025, comparable store sales included 194 stores, which excludes the three stores that remained closed due to the impact of Hurricane Helene.
Previous wording
Changes in retail grocery sales for the quarter ended December 27, 2025 as compared to the quarter ended December 28, 2024 are summarized as follows (in thousands):
Current wording
Changes in retail grocery sales for the quarter ended March 28, 2026 are summarized as follows (in thousands):
Previous wording
Gross Profit. Gross profit for the three-month period ended December 27, 2025 totaled $334.6 million, an increase of $33.4 million, or 11.1%, compared with gross profit of $301.1 million for the three-month period ended December 28, 2024. Gross profit as a percentage of sales was 24.4% for the three months ended December 27, 2025 as compared to 23.4% for the three months ended December 28, 2024. Retail segment gross profit, excluding fuel increased 76 basis points for the quarter ended December 27, 2025 as compared with the quarter ended December 28, 2024.
Current wording
Gross Profit. Gross profit for the three-month period ended March 28, 2026 totaled $325.3 million, an increase of $14.3 million, or 4.6%, compared with gross profit of $311.0 million for the three-month period ended March 29, 2025. Gross profit as a percentage of sales was 24.9% and 23.4% for the three months ended March 28, 2026 and March 29, 2025, respectively.
Previous wording
Operating and Administrative Expenses. Operating and administrative expenses increased by $14.7 million, or 5.2%, to $295.4 million for the three months ended December 27, 2025, as compared to $280.7 million for the three months ended December 28, 2024. Operating expenses were lower than normal for the three months ended December 28, 2024 as a result of Hurricane Helene. As a percentage of sales, operating and administrative expenses were 21.5% and 21.8% for the December 2025 and December 2024 quarters, respectively. Excluding fuel sales and associated fuel operating expenses (primarily payroll), operating expenses were 24.0% of sales for the first fiscal quarter of 2026 compared with 24.3% for the first fiscal quarter of 2025.
Current wording
Operating and Administrative Expenses. Operating and administrative expenses increased by $2.0 million, or 0.7%, to $291.2 million for the three months ended March 28, 2026, from $289.1 million for the three months ended March 29, 2025. As a percentage of sales, operating and administrative expenses were 22.3% and 21.8% for the March 2026 and March 2025 quarters, respectively.
Previous wording
Miscellaneous expense increased due to straight line rent credits from the purchase of a ground lease and insurance proceeds of $1.0 million received in the prior year.
Current wording
Miscellaneous expense increased as compared to prior year expenses that were offset by $0.5 million of insurance proceeds and $0.7 million for straight line rent credits from the purchase of a ground lease.
Previous wording
Other Income. Other income totaled $2.9 million for the three months ended December 27, 2025 compared with $3.3 million for the three months ended December 28, 2024.
Current wording
Other Income. Other income totaled $2.8 million for the three months ended March 28, 2026 and for the three months ended March 29, 2025.
Previous wording
Interest Expense. Interest expense totaled $4.6 million for the three months ended December 27, 2025 compared with $5.0 million for thethree months ended December 28, 2024. Total debt at December 27, 2025 was $511.5 million compared with $529.4 million at December 28, 2024.
Current wording
Interest Expense. Interest expense totaled $4.5 million for the three months ended March 28, 2026 compared with $4.9 million for thethree months ended March 29, 2025. The decrease related primarily to lower interest rates applicable to our variable rate indebtedness. Total debt at March 28, 2026 was $503.8 million compared with $521.6 million at March 29, 2025.
Previous wording
Income Taxes. Income tax expense totaled $9.3 million for the three months ended December 27, 2025, reflecting an effective tax rate of 24.9% of pretax income. Income tax expense totaled $5.3 million for the three months ended December 28, 2024, reflecting an effective tax rate of 24.1% of pretax income.
Current wording
Income Taxes. Income tax expense totaled $8.5 million for the three months ended March 28, 2026, reflecting an effective tax rate of 25.9% of pretax income. Income tax expense totaled $4.5 million for the three months ended March 29, 2025, reflecting an effective tax rate of 22.9% of pretax income.
Previous wording
Net Income. Net income totaled $28.1 million for the three months ended December 27, 2025 compared with $16.6 million for the three months ended December 28, 2024. Basic and diluted earnings per share for Class A Common Stock were $1.51 and $1.48, respectively, for the December 2025 quarter, compared to $0.89 and $0.87, respectively, for the December 2024 quarter. Basic and diluted earnings per share for Class B Common Stock were each $1.38 for the December 2025 quarter compared with $0.81 for the December 2024 quarter.
Current wording
Net Income. Net income totaled $24.3 million for the three months ended March 28, 2026 compared with $15.1 million for the three months ended March 29, 2025. Basic and diluted earnings per share for Class A Common Stock were $1.31 and $1.28, respectively, for the March 2026 quarter, compared to $0.81 and $0.80, respectively, for the March 2025 quarter. Basic and diluted earnings per share for Class B Common Stock were each $1.19 for the March 2026 quarter compared with $0.74 for the March 2025 quarter.
Previous wording
Net income for the first quarter of fiscal 2026 totaled $28.1 million, compared with net income of $16.6 million for the first quarter of fiscal 2025. The increase related primarily to an increase in net sales and an increase in gross profit as a percentage of net sales.
Current wording
Net income for the first half of fiscal 2026 totaled $52.4 million, compared with net income of $31.7 million for the first half of fiscal 2025. The increase related primarily to increased sales offset by increased expenses, as described below.
Previous wording
Net Sales. Net sales increased by $84.9 million, or 6.6%, to $1.37 billion for the three months ended December 27, 2025 compared with $1.29 billion for the three months ended December 28, 2024. The Company estimated that approximately $55 to $65 million of revenue was lost during the first three-week period of fiscal year 2025 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. Excluding fuel sales, total grocery comparable store sales increased 6.2% over the comparative fiscal quarter. Ingles operated 194 stores at December 27, 2025, excluding three stores that remained closed after Hurricane Helene and 195 stores at December 28, 2024, excluding three stores damaged by Hurricane Helene.
Current wording
Net Sales. Net sales increased by $61.5 million, or 2.4%, to $2.68 billion for the six months ended March 28, 2026 compared with $2.62 billion for the six months ended March 29, 2025. For the six months ended March 29, 2025, the Company estimated that approximately $55 to $65 million of revenue was lost during the three-week period immediately following Hurricane Helene due to road and power outages which prevented some stores from opening or maintaining normal store hours, as well as due to electronic payment disruptions as a result of the storm. Excluding fuel sales, total grocery comparable store sales decreased 2.2% for the six months ended March 28, 2026 as compared to the same period in 2025.
Previous wording
Salaries and wages increased in dollars for the three months ended December 27, 2025 compared to the three months ended December 28, 2024 due to the impact of Hurricane Helene in the prior year which included disruption at stores due to storm-related power losses and difficulties for associates to get to work due to the damage caused by Hurricane Helene.
Current wording
Salaries and wages normalized as compared to prior year which saw decreases in salaries and wages due to storm-related disruptions, power losses and difficulties for associates to get to work due to the damages caused by Hurricane Helene.
Previous wording
Capital expenditures totaled $36.4 million for the three months ended December 27, 2025. The Company’s capital expenditures included the continued construction of a new store expected to open in fiscal 2026, the expansion and remodeling of existing stores, the acquisition of sites, new technology, and upgrades of the Company’s transportation fleet and facilities.
Current wording
Capital expenditures totaled $53.0 million for the six months ended March 28, 2026. The Company’s capital expenditures included the continued construction of a new store expected to open in fiscal 2026, restoration work on the three stores that remain temporarily closed stores due to Hurricane Helene, the expansion and remodeling of existing stores, the acquisition of sites, new technology, and upgrades of the Company’s transportation fleet and facilities.
Previous wording
The Company’s capital expenditure plans for fiscal 2026 currently include investments of approximately $120 to $160 million. The Company currently plans to dedicate the majority of its fiscal 2026 capital expenditures to continued improvement of its store base, including the re-opening of the three stores temporarily closed due to the impact of Hurricane Helene, remodeling, and continued investment in one new store expected to open in fiscal 2026, as well as technology improvements, upgrading and replacing existing store, warehouse and transportation equipment and improvements to the Company’s milk processing plant.
Current wording
The Company’s capital expenditure plans for fiscal 2026 currently include investments of approximately $120 to $140 million. The Company currently plans to dedicate the majority of its fiscal 2026 capital expenditures to continued improvement of its store base, including the re-opening of the three stores temporarily closed due to Hurricane Helene, remodeling and continued investment in one store expected to open in fiscal 2026, as well as technology improvements, upgrading and replacing existing store, warehouse and transportation equipment and improvements to the Company’s milk processing plant.
Previous wording
The Company currently expects that its annual capital expenditures will be in the range of approximately $120 to $160 million going forward to maintain a modern store base. Among other things, planned expenditures for any given future fiscal year will be affected by the availability of financing, which can affect both the number of projects pursued at any given time and the cost of those projects. The number of projects may also fluctuate due to the varying costs of the types of projects pursued including new stores and major remodel/expansions. The Company makes decisions on the allocation of capital expenditure dollars based on many factors including the competitive environment, other Company capital initiatives and its financial condition.
Current wording
The Company currently expects that its annual capital expenditures will be in the range of approximately $120 to $140 million going forward to maintain a modern store base. Among other things, planned expenditures for any given future fiscal year will be affected by the availability of financing, which can affect both the number of projects pursued at any given time and the cost of those projects. The number of projects may also fluctuate due to the varying costs of the types of projects pursued including new stores and major remodel/expansions. The Company makes decisions on the allocation of capital expenditure dollars based on many factors including the competitive environment, other Company capital initiatives and its financial condition.
Previous wording
Cash used by investing activities for the three-month periods ended December 27, 2025 and December 28, 2024 totaled $36.3 million and $33.9 million, respectively.
Current wording
Cash used by investing activities for the six-month periods ended March 28, 2026 and March 29, 2025 totaled $52.6 million and $57.9 million, respectively, consisting primarily of capital expenditures.
Previous wording
Cash used by financing activities totaled $6.7 million for both the three-month periods ended December 27, 2025 and December 28, 2024.
Current wording
Cash used by financing activities totaled $17.9 million for both the six-month periods ended March 28, 2026 and March 29, 2025, which primarily consisted of payments on our long-term borrowings and dividends paid on our common stock.
Previous wording
The Company has a $150.0 million line of credit (the “Line”) that, as amended in June 2025, matures in June 2030. The Line provides the Company with various interest rate options based on the prime rate, the Federal Funds Rate, or SOFR. The Line allows the Company to issue up to $10.0 million in letters of credit, of which a single letter of credit in the amount of $500,000 was issued at December 27, 2025. The Company is not required to maintain compensating balances in connection with the Line. At December 27, 2025, the Company had no other borrowings outstanding under the Line.
Current wording
The Company has a $150.0 million line of credit (the “Line”), as amended in June 2025, matures in June 2030 . The Line provides the Company with various interest rate options based on the prime rate, the Federal Funds Rate, or SOFR. The Line allows the Company to issue up to $10.0 million in letters of credit, of which a single letter of credit in the amount of $900,000 was issued at March 28, 2026. The Company is not required to maintain compensating balances in connection with the Line. At March 28, 2026, the Company had no other borrowings outstanding under the Line.
Previous wording
Under a Continuing Covenant and Collateral Agency Agreement (the “Covenant Agreement”) between certain financial institutions and the Company, the financial institutions have agreed to hold the Bonds until December 17, 2029, subject to certain events. Mandatory redemption of the Bonds by the Company in the annual amount of $4.5 million began on January 1, 2014. The outstanding balance of the Bonds was $45.4 million as of December 27, 2025. The Company may redeem the Bonds without penalty or premium at any time prior to December 17, 2029.
Current wording
Under a Continuing Covenant and Collateral Agency Agreement (the “Covenant Agreement”) between certain financial institutions and the Company, the financial institutions have agreed to hold the Bonds until December 17, 2029, subject to certain events. Mandatory redemption of the Bonds by the Company in the annual amount of $4.5 million began on January 1, 2014. The outstanding balance of the Bonds was $40.9 million as of March 28, 2026. The Company may redeem the Bonds without penalty or premium at any time prior to December 17, 2029.
Previous wording
In September 2017, the Company refinanced approximately $60 million secured borrowing obligations with a SOFR-based amortizing floating rate loan secured by real estate maturing in October 2027. As of December 27, 2025, the Company had an interest rate swap agreement for a current notional amount of $11.0 million at a fixed rate of 3.962%. Under this agreement, the Company pays monthly the fixed rate of 3.962% and receives the one-month SOFR plus 1.75%. The interest rate swap effectively hedges floating rate debt in the same amount as the current notional amount of the interest rate swap. Both the floating rate debt and the interest rate swap have monthly principal amortization of $0.5 million and mature October 1, 2027.
Current wording
In September 2017, the Company refinanced approximately $60 million secured borrowing obligations with a SOFR-based amortizing floating rate loan secured by real estate maturing in October 2027. As of March 28, 2026, the Company has an interest rate swap agreement for a notional amount of $9.5 million at a fixed rate of 3.962%. Under this agreement, the Company pays monthly the fixed rate of 3.962% and receives the one-month SOFR plus 1.75%. The interest rate swap effectively hedges floating rate debt in the same amount as the notional amount of the interest rate swap. Both the floating rate debt and the interest rate swap have monthly principal amortization of $0.5 million and mature October 1, 2027.
Previous wording
In December 2019, the Company entered into a $155 million SOFR-based amortizing floating rate loan secured by real estate maturing in January 2030. As of December 27, 2025, the Company had an interest rate swap agreement for a current notional amount of $107.2 million at a fixed rate of 2.998%. Under this agreement, the Company pays monthly the fixed rate of 2.998% and receives the one-month SOFR plus 1.60%. The interest rate swap effectively hedges floating rate debt in the same amount as the current notional amount of the interest swap. Both the floating rate debt and the interest rate swap have monthly principal amortization of $0.65 million and mature in fiscal year 2030.
Current wording
In December 2019, the Company entered into a $155 million SOFR-based amortizing floating rate loan secured by real estate maturing in January 2030. As of March 28, 2026, the Company has an interest rate swap agreement for a notional amount of $105.3 million at a fixed rate of 2.998%. Under this agreement, the Company pays monthly the fixed rate of 2.998% and receives the one-month SOFR plus 1.60%. The interest rate swap effectively hedges floating rate debt in the same amount as the notional amount of the interest swap. Both the floating rate debt and the interest rate swap have monthly principal amortization of $0.65 million and mature in fiscal year 2030.
Previous wording
The fair market value of the interest rate swaps is measured quarterly with adjustments recorded in other comprehensive income.
Current wording
The fair market value of the interest rate swaps are measured quarterly with adjustments recorded in other comprehensive income.
Previous wording
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 which are inherently subject to significant risks and uncertainties, many of which are beyond the Company’s control. Some of these assumptions inevitably will not materialize, and unanticipated events will occur which will affect the Company’s results. Some important factors (but not necessarily all factors) that affect the Company’s revenues, financial position, growth strategies, profitability and operating results, or that otherwise could cause actual results to differ materially from those expressed in or implied by any forward-looking statement, include public health emergencies and pandemics; economic conditions generally in the Company’s operating area; the Company’s ability to successfully implement its expansion and operating strategies and to manage rapid expansion; pricing pressures and other competitive factors; reduction in per gallon retail fuel prices; the maturation of new and expanded stores; the Company’s ability to reduce costs and achieve improvements in operating results; the availability and terms of financing; increases in labor and utility costs; success or failure in the ownership and development of real estate; changes in the laws and government regulations applicable to the Company; disruptions in the efficient distribution of food products; changes in accounting policies, standards, guidelines or principles as may be adopted by regulatory agencies as well as the Financial Accounting Standards Board; and those factors contained under the heading “Risk Factors” in Item 1A of Part I of our most recent Annual Report on Form 10-Kfor the year ended September 27, 2025, filed by the Company under the Exchange Act, on November 26, 2025, as amended on January 22, 2026.
Current wording
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 which are inherently subject to significant risks and uncertainties many of which are beyond the Company’s control. Some of these assumptions inevitably will not materialize, and unanticipated events will occur which will affect the Company’s results. Some important factors (but not necessarily all factors) that affect the Company’s revenues, financial position, growth strategies, profitability and operating results, or that otherwise could cause actual results to differ materially from those expressed in or implied by any forward-looking statement, include public health emergencies and pandemics; economic conditions generally in the Company’s operating area; the Company’s ability to successfully implement its expansion and operating strategies and to manage rapid expansion; pricing pressures and other competitive factors; reduction in per gallon retail fuel prices; the maturation of new and expanded stores; the Company’s ability to reduce costs and achieve improvements in operating results; the availability and terms of financing; increases in labor and utility costs; success or failure in the ownership and development of real estate; changes in the laws and government regulations applicable to the Company; disruptions in the efficient distribution of food products; changes in accounting policies, standards, guidelines or principles as may be adopted by regulatory agencies as well as the Financial Accounting Standards Board; and those factors contained under the heading “Risk Factors” in Item 1A of Part I of our most recent Annual Report on Form 10-K for the year ended September 27, 2025, filed by the Company under the Exchange Act, on November 26, 2025, as amended January 22, 2026.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
These recorded losses did not include future repairs and rebuilds, nor did they account for revenue lost due to store closures or electronic payment disruptions. Four stores sustained damage that required that they be temporarily closed. As of the date of this Quarterly Report on Form 10-Q, three stores remain closed and are expected to reopen at various times during 2026 and 2027.
Current report — wording carried from elsewhere
Changes in retail grocery sales for the quarter ended March 28, 2026 are summarized as follows (in thousands):
Current report — wording carried from elsewhere
A breakdown of the major changes in operating and administrative expenses is as follows:
Current report — wording carried from elsewhere
Income Taxes. Income tax expense totaled $17.8 million for the six months ended March 28, 2026, reflecting an effective tax rate of 25.3% of pretax income. Income tax expense totaled $9.8 million for the six months ended March 29, 2025, reflecting an effective tax rate of 23.6% of pretax income.