Village Super Market, Inc. Reports Results for the Second Quarter Ended January 27, 2024
- Strong Q2 2024 performance with net income up 18% YoY to $14.5 million.
- Sales increased by 2.1% and same store sales by 2.2% in Q2 2024.
- Same store digital sales surged by 12% in Q2 2024.
- YTD 2024 net income increased by 11% to $26.1 million.
- Gross profit margin improved to 28.40% in Q2 2024.
- Operating expenses rose to 23.71% due to increased labor costs.
- Village Super Market operates 34 supermarkets in the Northeast.
- None.
Insights
The reported increase in net income by 18% for the second quarter and 11% year-to-date for Village Super Market reflects a robust financial performance, indicative of effective management strategies and potential resilience in the face of economic uncertainties. The growth in same store sales of 2.2% and digital sales by 12% suggests that the company is successfully adapting to changing consumer behaviors, with an emphasis on digital transformation in the retail sector.
However, the closure of a Gourmet Garage location and an increase in operating and administrative expenses, primarily due to labor costs and technology investments, indicate pressures on profitability. These factors must be closely monitored as they could potentially erode margins over time. The slight decrease in depreciation and amortization expenses, along with an increase in interest income, shows prudent capital management and an effective use of cash resources.
An analysis of the gross profit margin improvement, from 27.47% to 28.40%, reveals the company's ability to enhance operational efficiency and manage costs effectively. The increase is attributed to higher departmental margins, patronage dividends and lower warehouse assessment charges. This is a positive signal to investors, as it suggests the company's pricing power and cost control measures are yielding results.
However, investors should consider the potential impact of increased labor costs and the implications of an unfavorable product mix on future profitability. Additionally, the uptick in the effective income tax rate from 30.9% to 31.5% could marginally affect net earnings. The balance between managing operating costs and sustaining revenue growth will be crucial for the company's financial health moving forward.
The reported results provide a snapshot of the retail industry's dynamics, particularly in the supermarket segment. The inflationary environment, as indicated by retail price inflation contributing to same store sales growth, suggests that the company has been able to pass on some cost increases to consumers. This is a common strategy during periods of inflation but requires careful balancing to avoid diminishing consumer demand.
The investment in technology and digital sales growth aligns with broader economic trends towards digitalization and could position Village Super Market favorably in the competitive landscape. It is essential to evaluate how these investments contribute to long-term value creation and whether they can sustain the upward trend in digital sales.
SPRINGFIELD, N.J., March 05, 2024 (GLOBE NEWSWIRE) -- Village Super Market, Inc. (NASDAQ:VLGEA) (the "Company" or "Village") today reported its results of operations for the second quarter ended January 27, 2024.
Second Quarter Highlights
- Net income of
$14.5 million , an increase of18% compared to$12.3 million in the second quarter of the prior year - Sales increased
2.1% and same store sales increased2.2% - Same store digital sales increased
12%
Year-To-Date Fiscal 2024 Highlights
- Net income of
$26.1 million , an increase of11% compared to$23.4 million in the prior year-to-date period - Sales increased
2.6% and same store sales increased2.1% - Same store digital sales increased
12%
Second Quarter of Fiscal 2024 Results
Sales were
Gross profit as a percentage of sales increased to
Operating and administrative expense as a percentage of sales increased to
Depreciation and amortization expense in the 13 weeks ended January 27, 2024 decreased slightly compared to the 13 weeks ended January 28, 2023 due primarily to the timing of capital expenditures.
Interest expense increased in the 13 weeks ended January 27, 2024 compared to the 13 weeks ended January 28, 2023 due primarily to higher average outstanding debt balances.
Interest income increased in the 13 weeks ended January 27, 2024 compared to the 13 weeks ended January 28, 2023 due primarily to higher interest rates and larger amounts invested in variable rate notes receivable from Wakefern and demand deposits at Wakefern.
The effective income tax rate was
Year-To-Date Fiscal 2024 Results
Sales were
Gross profit as a percentage of sales increased to
Operating and administrative expense as a percentage of sales increased to
Depreciation and amortization expense decreased slightly in the 26 weeks ended January 27, 2024 compared to the 26 weeks ended January 28, 2023 due primarily to the timing of capital expenditures.
Interest expense increased in the 26 weeks ended January 27, 2024 compared to the 26 weeks ended January 28, 2023 due primarily to higher average outstanding debt balances.
Interest income increased in the 26 weeks ended January 27, 2024 compared to the 26 weeks ended January 28, 2023 due primarily to higher interest rates and larger amounts invested in variable rate notes receivable from Wakefern and demand deposits at Wakefern.
The effective income tax rate was
Village Super Market operates a chain of 34 supermarkets in New Jersey, New York, Maryland and Pennsylvania under the ShopRite and Fairway banners and three Gourmet Garage specialty markets in New York City.
Forward Looking Statements
All statements, other than statements of historical fact, included in this Press Release are or may be considered forward-looking statements within the meaning of federal securities law. The Company cautions the reader that there is no assurance that actual results or business conditions will not differ materially from future results, whether expressed, suggested or implied by such forward-looking statements. The Company undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date hereof. The following are among the principal factors that could cause actual results to differ from the forward-looking statements: general economic conditions; competitive pressures from the Company’s operating environment; the ability of the Company to maintain and improve its sales and margins; the ability to attract and retain qualified associates; the availability of new store locations; the availability of capital; the liquidity of the Company; the success of operating initiatives; consumer spending patterns; the impact of changing energy prices; increased cost of goods sold, including increased costs from the Company’s principal supplier, Wakefern; disruptions or changes in Wakefern's operations; the results of litigation; the results of tax examinations; the results of union contract negotiations; competitive store openings and closings; the rate of return on pension assets; and other factors detailed herein and in the Company’s filings with the SEC.
| VILLAGE SUPER MARKET, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) | |||||||||||||||
| 13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
| January 27, 2024 | January 28, 2023 | January 27, 2024 | January 28, 2023 | ||||||||||||
| Sales | $ | 575,579 | $ | 563,866 | $ | 1,111,933 | $ | 1,083,555 | |||||||
| Cost of sales | 412,137 | 408,987 | 795,542 | 779,391 | |||||||||||
| Gross profit | 163,442 | 154,879 | 316,391 | 304,164 | |||||||||||
| Operating and administrative expense | 136,477 | 130,103 | 266,769 | 255,665 | |||||||||||
| Depreciation and amortization | 8,523 | 8,659 | 17,029 | 17,205 | |||||||||||
| Operating income | 18,442 | 16,117 | 32,593 | 31,294 | |||||||||||
| Interest expense | (1,046 | ) | (966 | ) | (2,110 | ) | (2,052 | ) | |||||||
| Interest income | 3,743 | 2,679 | 7,568 | 4,647 | |||||||||||
| Income before income taxes | 21,139 | 17,830 | 38,051 | 33,889 | |||||||||||
| Income taxes | 6,659 | 5,508 | 11,985 | 10,484 | |||||||||||
| Net income | $ | 14,480 | $ | 12,322 | $ | 26,066 | $ | 23,405 | |||||||
| Net income per share: | |||||||||||||||
| Class A common stock: | |||||||||||||||
| Basic | $ | 1.09 | $ | 0.95 | $ | 1.95 | $ | 1.80 | |||||||
| Diluted | $ | 0.97 | $ | 0.85 | $ | 1.75 | $ | 1.61 | |||||||
| Class B common stock: | |||||||||||||||
| Basic | $ | 0.71 | $ | 0.62 | $ | 1.27 | $ | 1.17 | |||||||
| Diluted | $ | 0.71 | $ | 0.62 | $ | 1.27 | $ | 1.17 | |||||||
| Gross profit as a % of sales | 28.40 | % | 27.47 | % | 28.45 | % | 28.07 | % | |||||||
| Operating and administrative expense as a % of sales | 23.71 | % | 23.07 | % | 23.99 | % | 23.60 | % | |||||||
| Contact: | John Van Orden, CFO |
| (973) 467-2200 | |
| villageinvestorrelations@wakefern.com |
FAQ
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