WEIS MARKETS INC

Previous 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.

Current wording

Weis Markets is a conventional supermarket chain that currently operates 199 retail stores with approximately 22 thousand employees located in Pennsylvania and six surrounding states: Delaware, Maryland, New Jersey, New York, Virginia and West Virginia. In June 2025, the Company opened a new store in Ijamsville, Maryland expanding its presence in Frederick County. 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 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.

Current 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, 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 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.

Current wording

The Company has provided additional product offerings and customer conveniences such as “Weis 2 Go Online,” currently offered at 192 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 199 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, 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.

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 second quarter of 2025, 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 June 28, 2025, and June 29, 2024, as well as periods ended June 29, 2024, and July 1, 2023, respectively. Comparable store sales increased 1.8 percent on an individual year-over-year basis and increased 2.3 percent on a two-year stacked basis for the thirteen weeks ended June 28, 2025. Comparable store sales increased 1.4 percent on an individual year-over-year basis and increased 3.2 percent on a two-year stacked basis for the twenty-six weeks ended June 28, 2025.

Previous 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.

Current wording

According to the latest U.S. Bureau of Labor Statistics’ report, the Seasonally Adjusted Food-at-Home Consumer Price Index increased 0.1% for each thirteen week periods ended June 28, 2025 and June 29, 2024. The Seasonally Adjusted Food-at-Home Consumer Price Index increased 1.1% and 0.9% for the twenty-six week periods ended June 28, 2025 and June 29, 2024, respectively. According to the U.S. Department of Energy, the average price of gasoline in the Central Atlantic States decreased 11.7% or $0.44 per gallon in the thirteen weeks ended June 28, 2025, compared to the same period in 2024. The average price of gasoline in the Central Atlantic States decreased 7.9% or $0.28 per gallon in the first twenty-six weeks of 2025 when 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 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.

Current wording

Total net sales increased 2.8% to $1.2 billion for the thirteen weeks ended June 28, 2025, from $1.2 billion for the thirteen weeks ended June 29, 2024. In the twenty-six weeks ended June 28, 2025, total net sales increased 2.2% to $2.4 billion from $2.4 billion in 2024. The Company’s second quarter sales were favorably impacted from the Easter holiday period which occurred in the second quarter this year but fell in the first quarter last year. 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 June 28, 2025, compared to the same period in 2024 increased 0.6%. Comparable store sales for the same period increased 1.8% including fuel and 2.3% excluding fuel. Comparable store sales for the twenty-six weeks ended June 28, 2025, compared to the same period in 2024 increased 1.4% including fuel and 1.7% excluding fuel.

Previous 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.

Current wording

Gross profit on sales increased 3.1% and 2.3% for the thirteen and twenty-six weeks ended June 28, 2025, respectively, compared to the same period in 2024. Gross profit margin increased 0.1% for the thirteen weeks and remained the same for the twenty-six weeks ended June 28, 2025 when compared to the same period in 2024.

Previous 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.

Current wording

Non-cash LIFO inventory valuation adjustments represent expense of $99 thousand in the first twenty-six weeks of 2025 compared to expense of $2.2 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 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.

Current wording

Employee expenses such as wages, employer paid taxes, health care benefits and retirement plans, comprise approximately 58.8% of the total “Operating, general and administrative expenses.” As a percent of sales, direct store labor increased 0.1% in the thirteen and twenty-six week periods ended June 28, 2025 when compared to the same periods in 2024.

Previous 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.

Current wording

Depreciation and amortization expense charged to “Operating, general and administrative expenses” was $27.7 million, or 2.3% of net sales during the thirteen weeks ended June 28, 2025 compared to $25.2 million, or 2.1% of net sales during the thirteen weeks ended June 29, 2024. During the first twenty-six weeks of 2025 and 2024, depreciation and amortization expense charged to “Operating, general and administrative expenses” was $54.4 million, or 2.3% of net sales and $50.0 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.

Previous 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.

Current wording

Overall, the operating, general and administrative expenses as a percent of sales presented for the thirteen and twenty-six weeks ended June 28, 2025 increased in comparison with the 2024 percent of sales. Outside services and repairs along with employee expenses, mainly wages and insurance benefits, have increased in dollars as well as a percent of sales for the thirteen and twenty-six weeks ended June 28, 2025. Fixed expenses increased due to increased spending towards the Company’s capital expenditure programs, which includes the construction of new superstores, the expansion and remodeling of existing units, the acquisition of sites for future expansion, new technology purchases and the continued upgrade of the Company’s distribution facilities and transportation fleet. Outside services increase is partially due to $1.1 million in legal and financial services for the related party share purchase transaction referenced in Note 11. Other expenses include $2.7 million in payments received to settle and monetize our legal claims related to being overcharged as a merchant for prior year credit card interchange fees.

Previous 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.

Current wording

The effective income tax rate was 25.2% and 26.9% for the twenty-six weeks ended June 28, 2025 and June 29, 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. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. This legislation includes provisions that permanently extend the expiring elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation on qualifying property placed in service after January 19, 2025, and full expensing of domestic research and development expenditures. Accounting Standards Codification ASC 740, “Income Taxes” requires the Company to recognize any impacts of enacted legislation in the period enacted. As the OBBBA was enacted after the Company’s June 28, 2025 quarter end, the legislation will be evaluated to determine impact to the Company, and all changes required will be reflected on the Company’s Form 10-Q for the quarter ended September 27, 2025.

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 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.

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 June 28, 2025, the availability under the Credit Agreement was $17.4 million, net of $12.6 million letters of credit. The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company.

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 $169.9 million as of March 29, 2025. Management anticipates maintaining the investment portfolio but has the ability to liquidate if needed.

Current wording

The Company’s investment portfolio historically 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. In connection with the related party share purchase transaction in June 2025, the Company temporarily liquidated its commercial paper holdings. As of June 28, 2025, the investment portfolio totaled $126.9 million. Management anticipates maintaining the investment portfolio but has the ability to liquidate if needed.

Previous wording

The Company anticipates funding the long-term capital expenditure program, the acquisition of retail stores, the construction of additional distribution facilities, repurchases of common stock, and cash dividends on common stock through its cash and cash equivalents, marketable securities, cash flows from operating activities, and the Credit Agreement. The Company has no other commitment of capital resources as of March 29, 2025, other than the lease commitments on its store facilities and transportation equipment under operating leases that expire at various dates through 2038.

Current wording

The Company anticipates funding the long-term capital expenditure program, the acquisition of retail stores, the construction of additional distribution facilities, repurchase of common stock, and cash dividends on common stock through its cash and cash equivalents, marketable securities, cash flows from operating activities, and the Credit Agreement. The Company has no other commitment of capital resources as of June 28, 2025, other than the lease commitments on its store facilities and transportation equipment under operating leases that expire at various dates through 2038.

Previous 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.

Current wording

At its regular meeting held in July, the Board of Directors declared a quarterly dividend of $0.34 per share, payable on August 11, 2025, to shareholders of record on July 28, 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 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.

Current wording

Cash flows from operating activities decreased $13.1 million in the first twenty-six weeks of 2025 compared to the first twenty-six weeks of 2024. The decrease in cash flow from operating activities is primarily due to increased inventory purchases when compared to the same period in 2024.

Previous 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.

Current wording

In the first twenty-six weeks of 2025, when compared to the same period in 2024, the purchase of property and equipment, net of proceeds from sales, increased $25.5 million**.** Additionally, as a percent of sales, capital expenditures were 3.8% in the first twenty-six weeks of 2025 compared to 2.8% in the first twenty-six weeks of 2024. The increase as a percent of sales in 2025 compared to 2024 is primarily due to two new stores, one which opened in Ijamsville, MD in June 2025 and another expected to open in the third quarter of 2025. Intangible assets increased in the first twenty-six weeks of 2025 compared to 2024 with the purchase of $1.3 million in prescription files from Rite-Aid related to its announced bankruptcy and subsequent store closures. The purchases of marketable securities, net of proceeds from sales and maturities, decreased $73.7 million in the first twenty-six weeks of 2025 when compared to the same period 2024. Proceeds from the sales of marketable securities were used to partially fund the share purchase transaction referenced in Note 11.

Previous wording

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

Current wording

Net cash used in financing activities in the first twenty-six weeks of 2025 was $158.3 million compared to $18.3 million in 2024. The Company purchased 2,153,846 shares of common stock from the family of the late Patricia G. Ross Weis at $65.00 per share on June 6, 2025 for an aggregate purchase price of $140 million dollars. The Company paid dividends of $18.3 million in each of the first twenty-six weeks of 2025 and 2024.