Shares of AMCON Distributing Company DIT have gained 4.9% since the company reported its earnings for the quarter ended June 30, 2025. This compares to the S&P 500 index’s 1.2% growth over the same time frame. Over the past month, the stock has gained 4% compared with the S&P 500’s 3.9% growth.
AMCON reported earnings per share of $2.13 for the third fiscal quarter of 2025, reflecting a decrease from $2.46 in the prior-year quarter.
Quarterly sales rose 3% year over year to $739.6 million from $717.9 million, supported by modest revenue gains across the company’s two operating segments.
However, higher operating costs and inflationary pressures contributed to a 13.5% drop in operating income, which came in at $4.9 million compared to $5.6 million in the prior-year period.
Net income available to common shareholders declined to $1.3 million from $1.5 million a year earlier.
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Segment Performance and Operating Metrics
The wholesale distribution segment — the company’s primary revenue driver — posted revenues of $728.3 million and operating income of $7.3 million for the quarter. The retail health food segment contributed $11.3 million in revenues and $0.1 million in operating income. Gross profit for the quarter rose to $49.6 million from $48 million, while selling, general, and administrative expenses increased by 6.5% to $42.5 million, driven by inflation-linked costs in labor, insurance, and equipment. Depreciation and amortization also declined slightly, providing modest cost relief.
Interest expenses came in at $2.7 million, down slightly from $2.9 million last year. The company’s income before taxes was $2.1 million, down from $2.4 million in the prior-year quarter.
Management Commentary
Chairman and CEO Christopher H. Atayan emphasized AMCON’s focus on integrating recent acquisitions and optimizing new facilities to strengthen its position as the third-largest convenience distributor by territory in the U.S. He highlighted the company’s customer-centric philosophy, which includes enhanced advertising and merchandising tools aimed at giving clients a competitive edge.
President and COO Andrew C. Plummer acknowledged the ongoing challenges in the convenience retailing sector, citing sluggish consumer spending and persistent inflation. However, he reaffirmed foodservice as a strategic growth area. AMCON’s proprietary foodservice programs and turn-key solutions are designed to support its retail partners in competing directly with quick-service restaurants.
Factors Impacting Earnings
AMCON’s results continue to reflect broader macroeconomic pressures, notably inflation’s lingering effect on product costs, wages, benefits, and other operating expenses. The cumulative impact has contributed to elevated cost structures industry-wide, partially offsetting revenue growth. While the company increased sales, especially in its wholesale segment, margins were compressed due to higher input costs and operating expenditures.
Despite these headwinds, AMCON maintained its dividend payout of $0.18 per share for the quarter, unchanged from the prior year. Year-to-date dividends total $0.82 per share, consistent with the prior-year period.
Financial Position and Liquidity
As of June 30, 2025, AMCON reported shareholders’ equity of $113.2 million, up from $111.7 million as of September 30, 2024. Cash and equivalents stood at $0.8 million, and total assets reached $393.9 million. The company continues to focus on liquidity management, with CFO Charles J. Schmaderer noting ongoing efforts to evaluate potential operational synergies from recent acquisitions.
Cash flows from operations were negative $12.5 million for the nine-month period ended June 30, 2025, compared to positive $26.9 million in the prior-year period. The decline was largely due to changes in working capital, particularly in accounts receivable and inventories. Capital expenditures totaled $8.2 million, while acquisitions consumed an additional $6.1 million in cash.
Other Developments
During the quarter, AMCON completed its acquisition of Arrowrock Supply, a move aligned with its strategy of expanding its footprint and capabilities in the convenience distribution space. The acquisition cost approximately $6.1 million in cash.
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This article originally published on Zacks Investment Research (zacks.com).