AMCON Distributing Swings to $2.2M Q2 Loss as Costs Rise Faster Than Sales

AMCON Distributing Co., a wholesale and retail distributor of consumer goods, reported a net loss of $2.2 million for the three months ending March 31, 2026, compared with a $1.6 million loss in the same quarter a year earlier. The company operates in wholesale tobacco and confectionery distribution and retail health food stores. Read more earnings reports.

Sales rose 15.5% to $715.7 million from $619.5 million in the prior-year quarter, driven largely by cigarette revenue which climbed to $459.8 million from $374.3 million. Tobacco product sales increased to $131.2 million from $121.8 million.

Cost of sales jumped 16.6% to $672.2 million from $576.5 million, outstripping the revenue gain. Gross profit edged up just 1.1% to $43.5 million, with the gross margin compressing to 6.1% from 6.9% a year earlier.

Operating expenses totaled $43.9 million for the quarter, up 3.1% from $42.6 million. The company swung to an operating loss of $384,720 from operating income of $461,905 in the prior-year period.

For the six months ending March 31, 2026, AMCON posted a net loss of $1.4 million compared with a $1.2 million loss a year earlier. Half-year sales increased 8.6% to $1.45 billion from $1.33 billion, while cost of sales rose 9.1% to $1.35 billion.

Interest expense for the quarter declined slightly to $2.2 million from $2.3 million. The company recorded a tax benefit of $427,000 compared with $431,000 in the prior-year quarter.

AMCON's wholesale segment generated $703.9 million in sales for the quarter, up from $607.6 million, and posted operating income of $2.2 million compared with $2.8 million a year earlier. The retail segment, comprising health food stores, produced $11.8 million in revenue and operating income of $94,123.

The company's loss per share was $2.34 on both a basic and diluted basis for the quarter, compared with a loss of $1.72 per share a year earlier. AMCON paid dividends of $0.12 per share during the quarter.

Cash and cash equivalents stood at $643,064 at March 31, 2026, down from $744,613 at the end of September 2025. Total assets were $394.5 million compared with $391.1 million six months earlier.

The company generated $2.0 million in cash from operating activities during the six-month period, a reversal from cash used of $5.4 million in the prior-year period. Capital expenditures totaled $9.3 million for the half year, up from $6.5 million.

AMCON's credit facilities balance increased to $137.1 million from $126.8 million at September 30, 2025. Long-term debt, less current maturities, declined to $8.2 million from $11.0 million over the same period.