CHS Inc. Reports Decline in Net Income and Gross Profit for Q3 Fiscal 2025

CHS Inc. reported a decline in financial performance for the third quarter of fiscal 2025, with revenues totaling $9.77 billion, a slight increase from $9.61 billion in the same period last year. However, net income fell significantly to $231.7 million, down from $297.3 million in the prior year, reflecting a decrease in gross profit margins. The company's gross profit for the quarter was $329.8 million, compared to $467.8 million a year earlier, indicating a gross margin of 3.4%, down from 4.9%. For the nine months ending May 31, 2025, total revenues were $26.86 billion, down from $30.09 billion, with net income also decreasing to $401.3 million from $991.0 million.

The decline in profitability was attributed to several factors, including increased costs associated with renewable identification numbers (RINs) and lower margins in the Energy segment due to planned maintenance at the McPherson refinery. The company also faced challenges in its Ag segment, where decreased margins for grain and oilseed processing were noted. Operating earnings for the quarter were $71.0 million, a significant drop from $151.4 million in the previous year, while interest expenses rose to $44.1 million from $23.4 million, reflecting a higher short-term notes payable balance.

Strategically, CHS Inc. completed the acquisition of West Central Ag Services (WCAS) for approximately $322.1 million, which is expected to enhance its grain and agronomy services in Minnesota and North Dakota. This acquisition is anticipated to contribute positively to the company's operations moving forward. Additionally, the company reported a strong performance from its equity investments, particularly in Ventura Foods and CF Nitrogen, which provided solid contributions to income.

Operationally, CHS Inc. reported an increase in receivables and inventories, with total current assets rising to $8.93 billion from $8.71 billion year-over-year. However, current liabilities also increased significantly, leading to a decrease in working capital to $2.57 billion from $3.31 billion. The company’s cash and cash equivalents decreased to $323.9 million from $794.9 million, reflecting the impact of cash used in operations and investments. Looking ahead, CHS Inc. anticipates continued challenges in the energy and agricultural commodity markets, with expectations of reduced margins persisting through the remainder of fiscal 2025.