Operating Margin - Ingles Markets Inc (NASDAQ:IMKTA)

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Price: 70.44 USD -0.91%

Market Cap: 1.3B USD

2.2%

Current

Average

3.1%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

2.2%

Operating Profit

115.2m

Revenue

5.3B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US		Ingles Markets Inc NASDAQ:IMKTA	1.3B USD	2%
ZA	S	Shoprite Holdings Ltd JSE:SHP	144.6B Zac	6%
CA		Loblaw Companies Ltd TSX:L	73.6B CAD	7%
CA		Alimentation Couche-Tard Inc TSX:ATD	67.3B CAD	5%
US		Kroger Co NYSE:KR	40.6B USD	3%
UK		Tesco PLC LSE:TSCO	29.7B GBP	4%
NL		Koninklijke Ahold Delhaize NV AEX:AD	31.2B EUR	3%
JP		Seven & i Holdings Co Ltd TSE:3382	5.3T JPY	4%
IN		Avenue Supermarts Ltd NSE:DMART	2.5T INR	6%
CA		George Weston Ltd TSX:WN	36.9B CAD	8%
ZA	P	Pick N Pay Stores Ltd JSE:PIK	25.4B Zac	2%

Ingles Markets Inc
Glance View

Economic Moat

None

Market Cap

1.3B USD

Industry

Retail

Ingles Markets Inc., a venerable player in the regional grocery landscape, roots its operations deeply in the southern United States, blending traditional supermarket offerings with a community-focused spirit. Established in 1963 by Robert Ingles, it carved a niche by serving the small towns and rural areas of North Carolina and expanding gradually across the Southeast. Its business model hinges on operating its own supermarkets and shopping centers, capitalizing on real estate investments that enhance its asset base and provide stable rental income. This dual approach not only fortifies its retail operations but also diversifies its revenue streams. By strategically placing its stores to capture a loyal, localized clientele, Ingles secures a steady flow of foot traffic, cementing its standing within the communities it serves. Fundamentally, Ingles Markets generates revenue through the direct sale of grocery products, including fresh produce, meat, dairy, and bakery items, alongside general merchandise. Its stores are designed to cater to a variety of customers’ needs, often providing additional services such as pharmacies, fuel stations, and delis. This comprehensive service offering entices shoppers to choose Ingles as a one-stop-shop destination, thus boosting its per-customer sales. Competitive pricing, driven by efficient supply chain management and strategic supplier relationships, further enhances its profitability. Ingles also operates a robust private label program, which bolsters margins by offering exclusive high-quality products at lower prices. Coupled with savvy marketing and community engagement efforts, Ingles Markets continues to sustain a solid financial performance, balancing traditional grocery excellence with modern market demands.

View IMKTA Analysis

IMKTA Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Ingles Markets Inc
NASDAQ:IMKTA