WEIS MARKETS, INC. FORM 10-Q
Weis Markets, Inc. reported its quarterly financial results for the period ended March 29, 2025. The company’s net sales increased by 3.5% to $644.1 million, driven by a 2.1% increase in same-store sales and a 1.4% increase in sales from new stores. Gross profit margin decreased by 10 basis points to 24.1%, primarily due to higher costs for meat, produce, and dairy products. Operating income decreased by 12.1% to $24.1 million, primarily due to higher operating expenses and lower gross profit margin. Net income decreased by 14.5% to $15.3 million, or $0.57 per diluted share, compared to $17.8 million, or $0.66 per diluted share, in the same period last year. The company’s cash and cash equivalents decreased by $14.1 million to $43.1 million, and its long-term debt increased by $10.1 million to $143.1 million.
Overview of Weis Markets, Inc.’s Financial Performance
Weis Markets, Inc. is a conventional supermarket chain operating 198 retail stores across Pennsylvania and six surrounding states. The company’s financial report for the 13-week period ended March 29, 2025 highlights the following key points:
Revenue and Profit Trends
- Total net sales increased 1.6% to $1.2 billion compared to the same period in 2024. This was driven by retail price inflation in grocery, pharmacy, and fresh product categories.
- Comparable store sales, adjusted for the Easter holiday shift, increased 2.1% compared to the prior year period.
- Gross profit on sales increased 1.5%, with the gross profit margin remaining flat at 25.0%.
- Operating, general, and administrative expenses increased as a percentage of net sales, rising from 22.7% to 23.1%. This was primarily due to higher employee expenses, utilities costs, and fixed expenses.
- Net income decreased 11.6% to $20.5 million, with earnings per share declining from $0.86 to $0.76.
Strengths and Weaknesses Strengths:
- Diversified product offerings across grocery, pharmacy, fuel, and general merchandise categories.
- Vertically integrated supply chain with self-distribution and manufacturing capabilities.
- Expanding online ordering and delivery services to meet evolving customer preferences.
- Strong brand recognition and loyalty programs to drive repeat business.
Weaknesses:
- Rising operating costs, particularly for labor, utilities, and fixed expenses, putting pressure on profit margins.
- Increased competition from regional and national retailers with greater financial resources.
- Exposure to macroeconomic factors like inflation and changes in consumer spending patterns.
Outlook
- Management remains confident in the company’s ability to generate long-term sales growth, but acknowledges the challenges posed by a highly competitive environment and inflationary pressures.
- The company plans to continue investing in its capital expenditure program, including new store construction, expansions, and technology upgrades, to support future growth.
- Quarterly cash dividends are expected to continue, subject to the discretion of the Board of Directors and the company’s financial condition.
Overall, Weis Markets’ financial performance in the first quarter of 2025 reflects the ongoing challenges facing the grocery industry, with rising costs and competitive pressures offsetting modest revenue growth. The company’s diversified business model, vertical integration, and focus on customer convenience provide a foundation for future success, but management will need to navigate the evolving market landscape effectively to drive sustainable profitability.
