Breaking Down AMCON Distributing Company (DIT) Financial Health: Key Insights for Investors

You're looking at AMCON Distributing Company (DIT) and seeing a $\mathbf{\$2,816.7}$ million revenue number for fiscal year 2025, but honestly, that top-line growth is defintely masking some serious bottom-line pressure you need to understand right now. Here's the quick math: while sales rose modestly, the company's net income available to common shareholders plummeted to just $\mathbf{\$0.6}$ million, driving a nearly $\mathbf{87\%}$ drop in diluted Earnings Per Share (EPS) to $\mathbf{\$0.92}$ from the prior year. That's a massive compression, and it tells us the engine-the Wholesale segment with its $\mathbf{\$2,772.2}$ million in sales-is running against significant headwinds, specifically the $\mathbf{\$10.4}$ million interest expense and rising operating costs. We need to dig into how they manage their $\mathbf{\$230.3}$ million credit facility and if their recent acquisitions can reverse this earnings trend before the debt service eats up all the profit.

Revenue Analysis

You need to know where the money is coming from, especially for a distributor like AMCON Distributing Company (DIT), because their margins are razor-thin and volume is everything. The direct takeaway is that DIT's top-line revenue grew modestly in fiscal year 2025, reaching a total of $2,816.7 million, but this growth was heavily reliant on price increases, not volume, which is a key risk.

For the fiscal year ended September 30, 2025, AMCON Distributing Company (DIT) posted an increase in total sales of $105.7 million year-over-year. Here's the quick math: that translates to a growth rate of about 3.9% from the prior fiscal year. This growth is defintely a positive sign of market presence, but it's crucial to understand the drivers behind it.

The primary revenue source, by a significant margin, is the Wholesale distribution segment. This is where DIT acts as a key link between manufacturers and convenience retailers across a vast territory, now the third-largest in the United States by coverage. The Retail health food segment, which operates stores under the Healthy Edge banner, contributes a much smaller, though stable, piece of the pie.

Here is the breakdown of the $2,816.7 million in total sales for fiscal 2025:

The Wholesale segment is the engine, but the product mix within it tells a more complex story. For fiscal 2025, the sales of cigarettes represented approximately 61% of DIT's consolidated revenue. This is a massive concentration risk, even though the remaining 39% comes from a diversified list of other consumer products like candy, beverages, groceries, and foodservice items. The problem is, cigarettes, while driving revenue, only generated about 17% of the company's consolidated gross profit.

The year-over-year growth of 3.9% was largely driven by two factors: price increases from cigarette manufacturers and strategic acquisitions, such as Arrowrock Supply. This is a significant change because it means the growth is less about organic volume increases and more about passing on higher costs. This is a common pattern in the distribution sector, but it highlights the ongoing challenge of declining cigarette carton volumes, which partially offset these gains. You can dive deeper into who is betting on DIT's strategy by Exploring AMCON Distributing Company (DIT) Investor Profile: Who's Buying and Why?

To be fair, the management is actively pursuing expansion, integrating acquisitions, and investing in foodservice programs to diversify away from cigarettes over the long term. Still, for the near-term, the company's revenue remains deeply tied to a declining product category and the pricing power of its suppliers, which compresses margins when operating costs rise.

Next Step: Strategy Team: Map out DIT's top 5 non-cigarette product categories and their specific gross margin contribution for a clearer view of the diversification progress by next Tuesday.

Profitability Metrics

You need to know if AMCON Distributing Company (DIT) is just moving volume or actually making money, and the 2025 fiscal year data shows a clear divergence: revenue is up, but profitability is severely compressed. The bottom line is that while gross margin held steady, rising operational and interest costs nearly wiped out net income. This is a classic distribution industry squeeze.

For the fiscal year ending September 30, 2025, AMCON Distributing Company reported total sales of over $2.8 billion, specifically $2,816.7 million. But, when you look closer at the margins-the real measure of efficiency-the picture gets tight. Here's the quick math on their core profitability ratios for 2025:

• Gross Profit Margin: 6.7%
• Operating Profit Margin: Approximately 0.45% ($12.6 million Operating Income / $2,816.7 million Sales)
• Net Profit Margin: Approximately 0.02% ($0.6 million Net Income / $2,816.7 million Sales)

A 0.02% net profit margin means that for every $100 in sales, the company keeps just two cents. That's defintely a razor-thin margin, leaving almost no cushion for unexpected costs or market shifts.

Operational Efficiency and Cost Management

AMCON Distributing Company's operational efficiency is the key risk right now. Their gross profit margin has been remarkably consistent, holding at 6.7% in fiscal 2025. This suggests their procurement and pricing power (cost of goods sold) is stable, a positive sign in a high-volume, low-margin business like wholesale distribution.

But, the problem shows up right after the gross profit line. Operating income dropped 30% to $12.6 million in 2025, down from $18.0 million in fiscal 2024. Why? Selling, General, and Administrative (SG&A) expenses grew nearly 7% to $165.8 million. This increase is tied to integrating acquisitions, rising insurance costs, and higher employee compensation. You can see the full impact of this cost creep in the trend table below.

Profitability Trend and Industry Comparison

The trend over the last three years is a clear warning sign for investors focused on earnings. While revenue is growing, the profit is evaporating due to rising operating and interest expenses. The steep decline in net income from 2023 to 2025 is striking.

To be fair, the wholesale distribution industry often operates on low margins, but AMCON Distributing Company's margins are significantly lower than the sector average. The average gross profit margin for wholesale distributors is around 15%. AMCON Distributing Company's 6.7% gross margin is less than half of that industry benchmark, which is largely due to the high concentration of low-margin cigarette distribution (approximately 61% of 2025 revenue).

Here is how the net income has trended, showing the impact of cost pressures:

Note: Calculated using reported Net Income and Sales figures for each year. What this estimate hides is the impact of the $10.4 million in interest expense in 2025, which further limits bottom-line leverage and is a significant drag on net income. If you are curious about the market's reaction to this, you should be Exploring AMCON Distributing Company (DIT) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You need a clear picture of how AMCON Distributing Company (DIT) funds its operations, and the short answer is: they lean heavily on debt, which is common in the wholesale distribution business, but their leverage is on the high end for the sector. As of the end of the fiscal year on September 30, 2025, AMCON Distributing Company reported total shareholders' equity of approximately $113.1 million, against total debt of roughly $143.3 million.

Here's the quick math: the company's Debt-to-Equity (D/E) ratio sits at about 1.27 (or 126.7%). This means for every dollar of shareholder capital, the company uses $1.27 in debt to finance its assets. Honestly, that's a high number. The typical D/E ratio for wholesale distributors usually falls between 0.8 and 1.1, though some sub-sectors, like petroleum or farm products, can run higher.

The company's debt structure shows a reliance on flexible, near-term financing. The largest portion of their debt is tied up in credit facilities, a common financing tool for distributors who need to manage large, fluctuating inventory levels. As of March 31, 2025, the breakdown looked like this, which shows where the capital is coming from:

• Credit Facilities: $142.3 million
• Long-Term Debt (less current maturities): $13.8 million
• Current Maturities of Long-Term Debt (short-term portion): $5.3 million

This structure suggests a strategy to finance working capital-the money needed for day-to-day operations like buying inventory-using revolving credit lines, which are listed under 'Credit facilities.' This kind of debt financing is a tool to maximize liquidity, which the CFO has stated is a key focus, especially as they integrate recent acquisitions. The balance is a tightrope walk: debt is cheap capital that can boost returns on equity, but too much debt, like the current level, can make the business vulnerable to rising interest rates or a dip in operating cash flow.

The company's approach clearly favors debt to fund their growth and expansion, including the integration of new facilities and acquisitions. You can see their overall business direction in their Mission Statement, Vision, & Core Values of AMCON Distributing Company (DIT). Still, the high D/E ratio means their interest payments are not well covered by their earnings before interest and taxes (EBIT), which was only 1.2x recently. That's a tight margin for comfort.

Next Step: Finance should model the impact of a 100-basis-point interest rate hike on the interest coverage ratio, given the high reliance on credit facilities, by the end of next week.

Liquidity and Solvency

You need a clear picture of whether AMCON Distributing Company (DIT) can cover its near-term obligations, and the 2025 numbers show a mixed, but concerning, trend. The company's liquidity ratios have tightened, and its working capital is now negative, which demands attention. Breaking Down AMCON Distributing Company (DIT) Financial Health: Key Insights for Investors will give you the full context.

Assessing AMCON Distributing Company (DIT)'s Liquidity

The core measure of immediate financial health is liquidity, and for AMCON Distributing Company (DIT), the trend is downward. The Current Ratio-which measures current assets against current liabilities-hit a recent low of 2.1x for the fiscal year ending September 2025, down from a peak of 3.2x in 2023. While a 2.1x ratio is generally acceptable, the significant drop signals a shift in the balance sheet structure. The Quick Ratio (or acid-test ratio), which excludes inventory, is a tighter measure and stood at 1.06 for the trailing twelve months (TTM) ending September 2025. That 1.06 is right at the necessary 1.0 mark, meaning non-inventory assets barely cover short-term debt.

This decline in ratios maps directly to the working capital trend. Working capital (current assets minus current liabilities) is the cash cushion for day-to-day operations. AMCON Distributing Company's Net Current Asset Value, a proxy for working capital, has dramatically decreased and is now negative at $-37.00 million for the TTM ending September 2025. This negative figure is a red flag, indicating that current liabilities exceed current assets, a position wholesale distributors often manage due to high inventory turnover, but one that still heightens short-term refinancing risk.

Here's the quick math on the key liquidity metrics:

Cash Flow Statement Overview and Liquidity Concerns

Looking at the Cash Flow Statement for the fiscal year ending September 2025, the company's ability to generate cash from its core business, or Cash Flow from Operating Activities (CFO), was $15.2 million. This is a healthy generation of cash from operations, which is the defintely most important source of liquidity. However, this is a significant drop from the prior year's CFO of $67.87 million.

Cash Flow trends for the fiscal year ending September 2025:

• Operating Cash Flow (CFO): $15.2 million (Positive, but a sharp decline year-over-year).
• Investing Cash Flow (CFI): $-13.3 million (Outflow, primarily for capital expenditures or acquisitions).
• Financing Cash Flow (CFF): $-0.03 million (Minimal net activity, suggesting stable debt/equity management).

The main liquidity strength is the positive CFO, which means the business is cash-generative. Still, the primary liquidity concern is the combination of the negative working capital and the sharp drop in operating cash flow, which suggests a significant use of cash in working capital or a compression of operating margins. If the CFO trend continues to weaken, the $-37.00 million working capital deficit will become a much more serious issue, forcing the company to rely more heavily on its credit lines to fund day-to-day operations, which is always a riskier path.

Valuation Analysis

You're looking at AMCON Distributing Company (DIT) and wondering if it's a smart buy right now. The quick answer is that traditional valuation metrics paint a mixed, but mostly expensive, picture. The stock appears significantly overvalued based on its earnings, but deeply undervalued when you look at its book value, creating a classic distribution-sector puzzle you need to solve before committing capital.

The core of the valuation issue stems from the company's recent earnings drop. For the fiscal year ended September 30, 2025, AMCON Distributing Company reported earnings per share (EPS) of just $0.92, an 87% decline from the prior year. This steep decline inflates the Price-to-Earnings (P/E) ratio (the price you pay for every dollar of earnings) to an elevated 54.34 based on trailing twelve months (TTM) earnings. That's a high multiple for a mature distribution business.

Here's the quick math on the key valuation multiples as of November 2025:

• Price-to-Earnings (P/E): 54.34
• Price-to-Book (P/B): 0.64
• Enterprise Value-to-EBITDA (EV/EBITDA): 12.12

To be fair, the Price-to-Book (P/B) ratio, which compares the stock price to the net asset value per share, is a low 0.64. This suggests the market values the company at less than its liquidation value, a common signal of undervaluation or a deep market skepticism about asset quality. Still, the EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization) sits at 12.12, which is on the higher end for a wholesale distributor, indicating the business's cash flow generation relative to its total value is not particularly cheap.

Stock Price Volatility and Trend

The stock has been on a rollercoaster over the last 12 months, which is not what you expect from a steady food and consumer goods distributor. The 52-week high was $163.75, hit back in December 2024, and the 52-week low was $94.92 in June 2025. The most recent closing price, as of mid-November 2025, is around $117.45. This 28% drop from the high shows the market has heavily discounted the stock following the earnings report, so you're buying well off the peak, but the price is still 23.7% above the low. The volatility is defintely a risk factor you need to manage.

Dividend Health Check

The company remains committed to its dividend, but the yield is low. AMCON Distributing Company pays an annual dividend of $1.00 per share, which gives a current dividend yield of about 0.87%. This is significantly lower than the Consumer Defensive sector average of 2.9%. The dividend payout ratio (the portion of earnings paid out as dividends) is a sustainable 45.7%, based on a trailing EPS of $2.19. What this estimate hides is that the dividend is not threatened by the recent earnings dip, which is a good sign for income-focused investors.

For a deeper dive into who is buying and why, you should check out Exploring AMCON Distributing Company (DIT) Investor Profile: Who's Buying and Why?

Analyst Consensus and Outlook

A formal analyst consensus (Buy, Hold, or Sell) for AMCON Distributing Company is not widely published, which is common for smaller-cap stocks. However, the market sentiment is mixed. Some technical analysis suggests a 'Bullish outlook in the mid-term' based on moving average trends as of November 2025. Conversely, other models warn it could be a 'bad, high-risk 1-year investment option' with a potential price drop. The lack of a clear-cut consensus means you need to rely more heavily on your own due diligence, especially concerning the steep 2025 earnings decline and the high P/E ratio.

Risk Factors

You're looking at AMCON Distributing Company (DIT) after a tough fiscal 2025, and the headline is clear: revenue grew, but profitability cratered. The primary risk is simple-cost inflation is eating their operating income, and the core business is in secular decline. The company's net income available to common shareholders plummeted to just $0.6 million for the fiscal year ended September 30, 2025, down from over $4 million the prior year.

This isn't just a blip; it's a structural challenge. The wholesale distribution business, while massive in scale with 2025 revenues of $2,772.2 million, is highly exposed to two major, near-term pressures: rising operational costs and a shrinking core product category.

The Declining Core and Financial Squeeze

The biggest external risk is the heavy reliance on cigarette distribution. In fiscal 2025, cigarette sales still made up approximately 61% of AMCON Distributing Company's consolidated revenues. That's a declining sales category, period. Increased regulation, higher excise taxes, and public health concerns will keep chipping away at that volume, forcing the company to run faster just to stay in place.

The internal financial risk is the cost structure. Despite total sales hitting $2,816.7 million, operating income fell 30% to $12.6 million in fiscal 2025. Here's the quick math: inflation on labor, insurance, and equipment has pushed total operating expenses higher, and the company's interest expense is also a significant drag at $10.4 million. That's a high debt service load for a company with only $0.6 million in net income.

• Regulatory Headwinds: Ongoing changes in tobacco and vaping product laws create revenue uncertainty.
• Consumer Lag: Lagging consumer behavior and discretionary spending directly impact convenience store sales.
• Industry Consolidation: The trend of consolidation in the convenience store and wholesale distribution sectors increases competition and pricing pressure.
• Supplier Risk: A strategic risk is that product manufacturers might start selling directly to retailers, bypassing wholesale distributors like DIT.

You defintely need to watch the margin on that 61% revenue slice. For more context on who is investing in the company despite these risks, you should read Exploring AMCON Distributing Company (DIT) Investor Profile: Who's Buying and Why?

Mitigation Strategies and Execution Risk

Management is aware of these pressures and is taking clear actions, but execution is the key risk here. Their strategy is to diversify away from cigarettes and gain scale through acquisitions and technology investments. They are now the third-largest convenience distributor in the U.S. by territory covered.

The company is actively pursuing strategic acquisitions, like the recent Arrowrock Supply deal, to expand its footprint and operational capabilities. They are also investing in proprietary technology and foodservice programs to help their retail partners compete better. Still, the 2025 results show these investments haven't fully translated into profitability yet, with the fiscal year's Earnings Per Share (EPS) dropping to just $0.92.

Management's focus is on liquidity, which is smart. They ended the period with a combined credit facility limit of $230.3 million, with $103.5 million available. Plus, they repurchased 9,853 shares for about $1.1 million and maintained a $1.00 per share dividend, signaling confidence to shareholders despite the earnings contraction.

The risk is that the costs of integrating these acquisitions and rolling out new technology will continue to suppress earnings before the anticipated synergies kick in. It's a race against time and inflation.

Growth Opportunities

You're looking at AMCON Distributing Company (DIT) and seeing a mixed picture: top-line growth but significant margin pressure in the 2025 fiscal year. The core takeaway here is that management is defintely prioritizing long-term market share and strategic positioning over immediate earnings stability, which is a classic trade-off in a consolidating industry.

The company's future growth isn't about massive organic market expansion; it's fueled by three clear, actionable drivers: strategic acquisitions, foodservice innovation, and technology integration. Scale is the name of the game in distribution.

Here's the quick math on their current scale, which is the foundation for their growth strategy. For the fiscal year ended September 30, 2025, the wholesale segment dominated the financials, but the retail segment shows a small, focused diversification.

The company is actively executing a strategy to solidify its position as the third-largest convenience distributor in the U.S. by territory covered. This is the competitive advantage they are building on. Their moves are concrete, not abstract: they are integrating recent acquisitions like Arrowrock Supply and developing a 250,000-square-foot distribution facility in Colorado to serve the high-growth Intermountain Region.

The most compelling growth driver is the shift toward high-margin product innovations, specifically in foodservice. They know their retail partners need help competing with Quick Service Restaurants (QSRs), so they are rolling out proprietary, turn-key foodservice programs and merchandising solutions. This focus on value-added services, rather than just moving boxes, is what will drive margin recovery once the current inflationary pressures on labor and product costs ease up.

• Seek strategic acquisitions to increase footprint.
• Deploy proprietary foodservice programs (Henry's Foods).
• Integrate new tech for advertising and display programs.
• Build new infrastructure in key regions like Colorado.

What this estimate hides is the uncertainty around future earnings projections. Given the 2025 diluted EPS of just $0.92, down significantly from the prior year due to cost pressures, analysts aren't publishing clear, consensus-based growth targets yet. Still, the management team believes their long-term strategy of superior customer service and technology solutions positions them well for the years ahead. You can read more about their philosophical approach here: Mission Statement, Vision, & Core Values of AMCON Distributing Company (DIT).