WEIS MARKETS INC

Previous wording

Weis Markets is a conventional supermarket chain that currently operates 198 retail stores with over 22 thousand associates located in Pennsylvania and six surrounding states: Delaware, Maryland, New Jersey, New York, Virginia and West Virginia. Approximately 94% of Weis Markets associates are paid an hourly wage. Its products sold include groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services at certain locations, deli products, prepared foods, bakery products, beer and wine, fuel, and general merchandise items, such as health and beauty care and household products. The store product selection includes national, local and private brands and the Company promotes competitive pricing by using Everyday Lower Price; Low Price Guarantee; Low, Low Price; 3 Day Sale; senior and military discounts; and Loyalty programs. The Loyalty program includes reward points that may be redeemed for discounts on items in store, at one of the Company’s fuel stations or one of its third-party fuel station partners.

Current wording

Weis Markets is a conventional supermarket chain that currently operates 198 retail stores with approximately 22 thousand employees located in Pennsylvania and six surrounding states: Delaware, Maryland, New Jersey, New York, Virginia and West Virginia. Approximately 94% of Weis Markets employees are paid an hourly wage. Its products sold include groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services at certain locations, deli products, prepared foods, bakery products, beer and wine, fuel, and general merchandise items, such as health and beauty care and household products. The store product selection includes national, local and private brands and the Company promotes competitive pricing by using Everyday Lower Price; Low Price Guarantee; Low, Low Price; Weekly Hot Buys; senior and military discounts; and Loyalty programs. The Loyalty program includes reward points that may be redeemed for discounts on items in store, at one of the Company’s fuel stations or one of its third-party fuel station partners.

Previous wording

Utilizing its own strategically located distribution center and transportation fleet, Weis Markets self distributes approximately 52% of products with the remaining being supplied by direct store delivery vendors and regional wholesalers. In addition, the Company has three manufacturing facilities which process milk, ice cream and fresh meat products. The corporate offices are located in Sunbury, PA where the Company was founded in 1912.

Current wording

Utilizing its own strategically located distribution center and transportation fleet, Weis Markets self distributes approximately 51% of products with the remaining being supplied by direct store delivery vendors and regional wholesalers. In addition, the Company has three manufacturing facilities which process milk, water, ice, ice cream and fresh meat products. The corporate offices are located in Sunbury, PA where the Company was founded in 1912.

Previous wording

The Company has provided additional product offerings and customer conveniences such as “Weis 2 Go Online,” currently offered at 190 store locations. “Weis 2 Go Online” allows the customer to order on-line and have their order delivered or picked up at an expedient store drive-thru. The Company also currently offers home delivery to customers in all 198 of its locations via multiple grocery delivery partners.

Current wording

The Company has provided additional product offerings and customer conveniences such as “Weis 2 Go Online,” currently offered at 191 store locations. “Weis 2 Go Online” allows the customer to order on-line and have their order delivered or picked up at an expedient store drive-thru. The Company also currently offers home delivery to customers at all 198 of its locations via multiple grocery delivery partners.

Previous wording

Year-over-year and sequential comparisons are the primary calculations used to analyze operating results, however, due to fluctuations caused by declining government benefits, pharmacy sales growth, and inflationary trends in the food retail industry, management believes it is necessary to provide a Two-Year Stacked Comparable Store Sales analysis. The following tables provide the two-year stacked comparable store sales, including and excluding fuel, for the periods ended September 28, 2024, and September 30, 2023, as well as periods ended September 30, 2023, and September 24, 2022, respectively. Comparable store sales increased 2.5 percent on an individual year-over-year basis and increased 3.3 percent on a two-year stacked basis for the thirteen weeks ended September 28, 2024. Comparable store sales increased 2.0 percent on an individual year-over-year basis and increased 4.5 percent on a two-year stacked basis in the thirty-nine weeks ended September 28, 2024.

Current wording

Year-over-year and sequential comparisons are the primary calculations used to analyze operating results, however, due to fluctuations caused by declining government benefits, pharmacy sales growth, the impact of the Easter holiday in the first quarter of 2024, and inflationary trends in the food retail industry, management believes it is necessary to provide a Two-Year Stacked Comparable Store Sales analysis. The following tables provide the two-year stacked comparable store sales, including and excluding fuel, for the periods ended March 29, 2025, and March 30, 2024, as well as periods ended March 30, 2024, and April 1, 2023, respectively. Comparable store sales increased 0.9 percent on an individual year-over-year basis and increased 4.0 percent on a two-year stacked basis for the thirteen weeks ended March 29, 2025.

Previous wording

According to the latest U.S. Bureau of Labor Statistics’ report, the Seasonally Adjusted Food-at-Home Consumer Price Index increased 0.7% and 0.5% for the thirteen week periods ended September 28, 2024 and September 30, 2023, respectively. The Seasonally Adjusted Food-at-Home Consumer Price Index increased 1.6% and 1.0% for thirty-nine week periods ended September 28, 2024 and September 30, 2023, respectively. According to the U.S. Department of Energy, the average price of gasoline in the Central Atlantic States decreased 8.4% or $0.31 per gallon in the thirteen weeks ended September 28, 2024, compared to the same period in 2023. The average price of gasoline in the Central Atlantic States decreased 10.1% or $0.38 per gallon in the first thirty-nine weeks of 2024 when compared to the same period in 2023. Although the U.S. Bureau of Labor Statistics’ and the U.S. Department of Energy indices may be reflective of broader trends, they will not necessarily be indicative of the Company’s actual results.

Current wording

According to the latest U.S. Bureau of Labor Statistics’ report, the Seasonally Adjusted Food-at-Home Consumer Price Index increased 1.0% and 1.6% for the thirteen week periods ended March 29, 2025 and March 30, 2024, respectively. According to the U.S. Department of Energy, the average price of gasoline in the Central Atlantic States decreased 3.7% or $0.13 per gallon in the thirteen weeks ended March 29, 2025, compared to the same period in 2024. Although the U.S. Bureau of Labor Statistics’ and the U.S. Department of Energy indices may be reflective of broader trends, they will not necessarily be indicative of the Company’s actual results.

Previous wording

Total net sales increased 2.2% to $1.2 billion for the thirteen weeks ended September 28, 2024, from $1.2 billion for the thirteen weeks ended September 30, 2023. In the thirty-nine weeks ended September 28, 2024, total net sales increased 1.8% to $3.5 billion from $3.5 billion. The increase in total net sales includes retail price inflation in grocery, pharmacy and fresh product categories. Comparable store sales for the thirteen weeks ended September 28, 2024, compared to the same period in 2023 increased 2.5% including fuel and 3.0% excluding fuel. Comparable store sales for the thirty-nine weeks ended September 28, 2024, compared to the same period in 2023 increased 2.0% including fuel and 2.2% excluding fuel.

Current wording

Total net sales increased 1.6% to $1.2 billion for the thirteen weeks ended March 29, 2025, from $1.2 billion for the thirteen weeks ended March 30, 2024. The Company’s sales were impacted from the Easter holiday period which occurred in the first quarter in 2024 but falls in the second quarter in 2025. The increase in total net sales includes retail price inflation in grocery, pharmacy and fresh product categories. Comparable store sales adjusted for the Easter holiday shift for the thirteen weeks ended March 29, 2025, compared to the same period in 2024 increased 2.1%. Comparable store sales for the same period increased 0.9% including fuel and 1.0% excluding fuel.

Previous wording

Gross profit on sales increased 1.9% and 0.7% for the thirteen and thirty-nine weeks ended September 28, 2024, compared to the same periods in 2023. Gross profit margin decreased 0.1% and 0.3% for the thirteen and thirty-nine weeks ended September 28, 2024, respectively, compared to the same periods in 2023.

Current wording

Gross profit on sales increased 1.5% for the thirteen weeks ended March 29, 2025, compared to the same period in 2024. Gross profit margin remained the same for the thirteen weeks ended March 29, 2025 when compared to the same period in 2024.

Previous wording

Non-cash LIFO inventory valuation adjustments represent expense of $2.5 million in the first thirty-nine weeks of 2024 compared to expense of $4.3 million in the same period in 2023. Although the Company experienced cost inflation and deflation in various commodities for the periods presented, the Company anticipates overall product costs to slightly increase given the recent inflationary trends in the food retail industry.

Current wording

Non-cash LIFO inventory valuation adjustments represent income of $77 thousand in the first thirteen weeks of 2025 compared to expense of $1.4 million in the same period in 2024. Although the Company experienced cost inflation and deflation in various commodities for the periods presented, the Company anticipates overall product costs to increase given the recent inflationary trends in the food retail industry.

Previous wording

Employee expenses such as wages, employer paid taxes, health care benefits and retirement plans, comprise approximately 60.4% of the total “Operating, general and administrative expenses.” As a percent of sales, direct store labor increased 0.2% in each of the thirteen and thirty-nine week periods ended September 28, 2024 when compared to the same periods in 2023, respectively.

Current wording

Employee expenses such as wages, employer paid taxes, health care benefits and retirement plans, comprise approximately 58.4% of the total “Operating, general and administrative expenses.” As a percent of sales, direct store labor increased 0.1% in the thirteen week period ended March 29, 2025 when compared to the same period in 2024.

Previous wording

Depreciation and amortization expense charged to “Operating, general and administrative expenses” was $25.8 million, or 2.2% of net sales during the thirteen weeks ended September 28, 2024 compared to $24.7 million, or 2.1% of net sales during the thirteen weeks ended September 30, 2023. During the first thirty-nine weeks of 2024 and 2023, depreciation and amortization expense charged to “Operating, general and administrative expenses” was $75.7 million, or 2.1% of net sales and $73.6 million, or 2.1% of net sales, respectively. See the Liquidity and Capital Resources section for further information regarding the Company’s capital expenditure program.

Current wording

Depreciation and amortization expense charged to “Operating, general and administrative expenses” was $26.7 million, or 2.2% of net sales during the thirteen weeks ended March 29, 2025 compared to $24.8 million, or 2.1% of net sales during the thirteen weeks ended March 30, 2024. See the Liquidity and Capital Resources section for further information regarding the Company’s capital expenditure program.

Previous wording

Overall, the operating, general and administrative expenses as a percent of sales presented for the thirteen and thirty-nine weeks ended September 28, 2024 benefited in comparison with the 2023 percent of sales due to the gain on disposition of fixed assets, while employee expenses and third party services, mainly professional, financial service fees and IT expenses, increased in dollars as a percent of sales for the thirteen and thirty-nine weeks ended September 28, 2024.

Current wording

Overall, the operating, general and administrative expenses as a percent of sales presented for the thirteen weeks ended March 29, 2025 increased in comparison with the 2024 percent of sales. Depreciation and amortization expenses along with employee expenses, mainly wages and insurance benefits, have increased in dollars as well as a percent of sales for the thirteen weeks ended March 29, 2025.

Previous wording

The effective income tax rate was 27.2% and 27.1% for the thirty-nine weeks ended September 28, 2024 and September 30, 2023, respectively. The effective income tax rate differed from the federal statutory rate, primarily due to the effect of state taxes, net of permanent differences.

Current wording

The effective income tax rate was 26.3% and 26.5% for the thirteen weeks ended March 29, 2025 and March 30, 2024, respectively. The effective income tax rate differed from the federal statutory rate, primarily due to the effect of state taxes, net of permanent differences.

Previous wording

The primary source of cash is cash flows generated from operations. In addition, the Company has access to a revolving credit agreement entered into on September 1, 2016, and last amended on September 29, 2023, with Wells Fargo Bank, N.A. (the “Credit Agreement”). The Credit Agreement matures on October 1, 2027, and provides for an unsecured revolving credit facility with an aggregate principal amount not to exceed $30.0 million with an additional discretionary amount available of $70.0 million. As of September 28, 2024, the availability under the Credit Agreement was $13.2 million, net of $16.8 million letters of credit. The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company. The Company has not had an obligation on the Credit Agreement since the second quarter of 2018.

Current wording

The primary source of cash is cash flows generated from operations. In addition, the Company has access to a revolving credit agreement entered into on September 1, 2016, and last amended on September 29, 2023, with Wells Fargo Bank, N.A. (the “Credit Agreement”). The Credit Agreement matures on October 1, 2027, and provides for an unsecured revolving credit facility with an aggregate principal amount not to exceed $30.0 million with an additional discretionary amount available of $70.0 million. As of March 29, 2025, the availability under the Credit Agreement was $14.5 million, net of $15.5 million letters of credit. The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company. The Company has not had an obligation on the Credit Agreement since the second quarter of 2018.

Previous wording

The Company’s investment portfolio consists of high-grade bonds and commercial paper with maturity dates between one and 30 years and four high yield, large capitalized public company equity securities. The portfolio totaled $231.4 million as of September 28, 2024. Management anticipates maintaining the investment portfolio but has the ability to liquidate if needed.

Current wording

The Company’s investment portfolio consists of high-grade bonds and commercial paper with maturity dates between one and 30 years and four high yield, large capitalized public company equity securities. The portfolio totaled $169.9 million as of March 29, 2025. Management anticipates maintaining the investment portfolio but has the ability to liquidate if needed.

Previous wording

At its regular meeting held in October, the Board of Directors declared a quarterly dividend of $0.34 per share, payable on November 26, 2024, to shareholders of record on November 12, 2024. The Company expects to continue paying regular cash dividends on a quarterly basis. However, the Board of Directors reconsiders the declaration of dividends quarterly. The Company pays these dividends at the discretion of the Board of Directors and the continuation of these payments and the amount of the dividends depends upon the results of operations, the financial condition of the Company and other factors which the Board of Directors deems relevant.

Current wording

At its regular meeting held in May, the Board of Directors declared a quarterly dividend of $0.34 per share, payable on May 27, 2025, to shareholders of record on May 12, 2025. The Company expects to continue paying regular cash dividends on a quarterly basis. However, the Board of Directors reconsiders the declaration of dividends quarterly. The Company pays these dividends at the discretion of the Board of Directors and the continuation of these payments and the amount of the dividends depends upon the results of operations, the financial condition of the Company and other factors which the Board of Directors deems relevant.

Previous wording

Cash flows from operating activities increased $57.2 million in the first thirty-nine weeks of 2024 compared to the first thirty-nine weeks of 2023. The increase in cash flow from operating activities is primarily due to the one-time business practice used in late September 2023 to settle most outstanding working capital obligations in advance of the conversion to a new enterprise resource planning system in early October 2023 in order to mitigate any possible payment delays.

Current wording

Cash flows from operating activities decreased $29.4 million in the first thirteen weeks of 2025 compared to the first thirteen weeks of 2024. The decrease in cash flow from operating activities is primarily due to less net income and settling working capital obligations in the thirteen weeks of 2025 when compared to the same period in 2024.

Previous wording

In the first thirty-nine weeks of 2024, when compared to the same period in 2023, the purchase of property and equipment, net of proceeds from sales, increased $26.3 million and the purchases of marketable securities, net of proceeds from sales and maturities, decreased $29.6 million. Additionally, as a percent of sales, capital expenditures were 3.0% in the first thirty-nine weeks of 2024 and 2.2% in the first thirty-nine weeks of 2023. The increase as a percent of sales in 2024 compared to 2023 is due to the purchase of two previously leased store locations. For the remainder of 2024, management anticipates maintaining the investment portfolio but has the ability to liquidate if needed.

Current wording

In the first thirteen weeks of 2025, when compared to the same period in 2024, the purchase of property and equipment, net of proceeds from sales, increased $469 thousand and the purchases of marketable securities, net of proceeds from sales and maturities, decreased $58.3 million. Additionally, as a percent of sales, capital expenditures were 3.0% in the first thirteen weeks of 2025 and 2.5% in the first thirteen weeks of 2024. The increase as a percent of sales in 2025 compared to 2024 is due to the acquisition of a store.

Previous wording

The Company paid dividends of $27.4 million in the first thirty-nine weeks of 2024 and 2023.

Current wording

The Company paid dividends of $9.1 million in each of the first thirteen weeks of 2025 and 2024.

Previous wording

In addition to historical information, this Form 10-Q report may contain forward-looking statements, which are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. For example, risks and uncertainties can arise with changes in: general economic conditions, including their impact on capital expenditures; business conditions in the retail industry; the regulatory environment; rapidly changing technology, including cybersecurity and data privacy risks, and competitive factors, including increased competition with regional and national retailers; and price pressures. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect Management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files periodically with the Securities and Exchange Commission.

Current wording

In addition to historical information, this Form 10-Q report may contain forward-looking statements, which are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. For example, risks and uncertainties can arise with changes in: general economic conditions, including their impact on capital expenditures; tariffs and trade policies; business conditions and trends in the retail industry; the regulatory environment; rapidly changing technology, including cybersecurity and data privacy risks, and competitive factors, including increased competition with regional and national retailers; and price pressures. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect Management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files periodically with the Securities and Exchange Commission.