Shares of AMCON Distributing Company DIT have declined 4.6% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 index’s 0.9% growth over the same time frame. Over the past month, the stock has declined 11.5% against the S&P 500’s 0.4% growth.
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For the fiscal first quarter ended Dec. 31, 2024, AMCON reported earnings per share (EPS) of 57 cents compared to $1.78 a year earlier.
The company reported net sales of $711.3 million, a 10.3% increase from $645 million in the prior-year period. Gross profit improved 8.3% to $46.9 million from $43.3 million.
However, net income available to common shareholders declined 67.5% to $0.4 million. This significant decrease in net income was influenced by higher interest expenses and increased operating costs.
AMCON Distributing Company Price, Consensus and EPS Surprise
AMCON Distributing Company price-consensus-eps-surprise-chart | AMCON Distributing Company Quote
Operating Metrics and Performance Drivers
Revenue Growth Supported by Higher Sales Volume
AMCON achieved double-digit revenue growth, driven primarily by increased sales volume across its product categories, including beverages, tobacco, and foodservice offerings. Excise taxes included in sales increased to $143.4 million compared to $138.1 million in the year-ago quarter.
Margins Under Pressure
Despite a higher gross profit, the gross margin contracted slightly to 6.6% from 6.7% in the prior-year period. Rising operating expenses, which surged 9.5% year over year to $43.2 million, further pressured profitability. Interest expenses also rose 23.1% to $2.9 million, reflecting increased borrowings and higher interest rates.
Balance Sheet Position
As of Dec. 31, 2024, AMCON reported shareholders’ equity of $112.4 million, a modest increase from $111.7 million at the end of September 2024. However, cash decreased to $0.5 million from $0.7 million sequentially. Inventory levels rose significantly to $174.5 million from $144.3 million, indicating higher working capital requirements.
Strategic Commentary
Management reaffirmed its focus on supporting its retail partners with advanced logistics and innovative foodservice solutions. CEO Christopher H. Atayan emphasized the company’s commitment to its customer-centric philosophy, particularly during challenging weather conditions, to ensure the timely delivery of goods.
Andrew C. Plummer, president and COO, highlighted the strategic importance of Henry’s Foods, a subsidiary specializing in proprietary foodservice programs. The company has enhanced its advertising and electronic display offerings to provide customers with a competitive edge in the Quick Service Restaurant market.
Acquisition Update
Arrowrock Supply Acquisition
During the quarter, AMCON completed the acquisition of the assets of Arrowrock Supply, a Boise, Idaho-based distributor. The addition is expected to strengthen the company’s footprint in the Intermountain Region. Additionally, AMCON is investing in a new 250,000-square-foot distribution facility in Colorado City, CO, to support growth initiatives in the area.
Other Developments
The company continues to prioritize liquidity and balance sheet management. Notably, AMCON’s borrowing under its revolving credit facilities increased to $165.9 million, up from $121.3 million at the end of September 2024. This rise underscores the company’s reliance on credit to finance its operations and capital projects.
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