Village Super Market, Inc. Reports Results for the Third Quarter Ended April 27, 2024
Village Super Market (NASDAQ:VLGEA) reported its third quarter results for the period ending April 27, 2024. Sales increased by 3.2% to $546.4 million, with same store sales rising 2.3%. Digital sales saw a 9% growth. Net income was $9.0 million, while adjusted net income decreased by 6% to $9.6 million compared to the same period last year. The company opened a new 83,000 sq. ft. ShopRite store in Old Bridge, NJ, and closed a Gourmet Garage location in November 2023. Gross profit margin slightly decreased to 28.54%. Operating and administrative expenses rose to 25.19% due to higher labor costs and other expenses. For the fiscal year-to-date, sales increased by 2.8% to $1,658.3 million, with same store sales up by 2.2%. Net income for the year-to-date was $35.0 million, and adjusted net income was $35.7 million, a 6% increase from last year.
- Sales increased by 3.2% to $546.4 million in Q3 2024.
- Same store sales grew by 2.3%.
- Digital sales saw a 9% increase in Q3.
- Net income for the fiscal year-to-date was $35.0 million.
- Adjusted net income for the fiscal year-to-date increased by 6% to $35.7 million.
- Interest expense decreased due to lower average outstanding debt balances.
- Interest income increased due to higher interest rates and larger investments.
- Adjusted net income for Q3 decreased by 6% to $9.6 million.
- Gross profit margin decreased to 28.54% in Q3 due to higher promotional spending and unfavorable product mix.
- Operating and administrative expenses rose to 25.19% due to increased labor costs, digital sales fees, and other expenses.
- Closure of a Gourmet Garage location in November 2023 negatively impacted sales.
Insights
Village Super Market's third-quarter results show a mixed financial performance. The 3.2% sales increase and 2.3% same store sales increase are positive indicators of growth, supported by the grand opening of a new ShopRite store. However, the 6% decrease in adjusted net income to
The slight decrease in gross profit margin to 28.54% from 28.57% indicates increased promotional spending and an unfavorable product mix. Operating expenses rose largely because of increased labor costs, fringe benefits and other costs associated with digital sales and technology investments. Investors should weigh these factors, keeping in mind that higher costs could be offset by long-term growth from tech investments and digital sales expansion.
The interest expense decrease and interest income increase reflect a better management of the capital structure. The effective income tax rate decrease also aids net income slightly. For long-term investors, these results suggest the company is on the right track despite short-term profitability challenges.
For retail investors, Village Super Market’s focus on digital sales growth and new store openings are significant. Same store digital sales increasing by
The remodeling and expansion of existing stores is a noteworthy strategy to enhance customer experience and potentially drive higher sales. However, the closure of a Gourmet Garage location and its impact on sales reminds investors of the constant balancing act between expansion and consolidation in retail.
Long-term prospects look promising given these strategic moves, but investors should monitor if the digital sales growth can sustain and if the new stores will significantly contribute to overall revenue.
SPRINGFIELD, N.J., June 04, 2024 (GLOBE NEWSWIRE) -- Village Super Market, Inc. (NASDAQ:VLGEA) (the "Company" or "Village") today reported its results of operations for the third quarter ended April 27, 2024.
Third Quarter Highlights
- Sales increased
3.2% and same store sales increased2.3% - Same store digital sales increased
9% - Net income of
$9.0 million - Adjusted net income of
$9.6 million , a decrease of6% compared to adjusted net income of$10.2 million in the third quarter of the prior year - Grand opening of an 83,000 sq. ft. ShopRite replacement store in Old Bridge, NJ
Year-To-Date Fiscal 2024 Highlights
- Sales increased
2.8% and same store sales increased2.2% - Same store digital sales increased
12% - Net income of
$35.0 million - Adjusted net income of
$35.7 million , an increase of6% compared to adjusted net income of$33.6 million in the prior year-to-date period
Third Quarter of Fiscal 2024 Results
Sales were
Gross profit as a percentage of sales decreased to
Operating and administrative expense as a percentage of sales increased to
Depreciation and amortization expense in the 13 weeks ended April 27, 2024 decreased slightly compared to the 13 weeks ended April 29, 2023 due primarily to the timing of capital expenditures.
Interest expense decreased in the 13 weeks ended April 27, 2024 compared to the 13 weeks ended April 29, 2023 due primarily to lower average outstanding debt balances.
Interest income increased in the 13 weeks ended April 27, 2024 compared to the 13 weeks ended April 29, 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 39 weeks ended April 27, 2024 compared to the 39 weeks ended April 29, 2023 due primarily to the timing of capital expenditures.
Interest expense decreased in the 39 weeks ended April 27, 2024 compared to the 39 weeks ended April 29, 2023 due primarily to lower average outstanding debt balances.
Interest income increased in the 39 weeks ended April 27, 2024 compared to the 39 weeks ended April 29, 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 | 39 Weeks Ended | |||||||||||||||
| April 27, 2024 | April 29, 2023 | April 27, 2024 | April 29, 2023 | |||||||||||||
| Sales | $ | 546,396 | $ | 529,294 | $ | 1,658,329 | $ | 1,612,848 | ||||||||
| Cost of sales | 390,464 | 378,071 | 1,186,007 | 1,157,461 | ||||||||||||
| Gross profit | 155,932 | 151,223 | 472,322 | 455,387 | ||||||||||||
| Operating and administrative expense | 137,650 | 128,787 | 404,419 | 384,452 | ||||||||||||
| Depreciation and amortization | 8,078 | 8,392 | 25,108 | 25,597 | ||||||||||||
| Operating income | 10,204 | 14,044 | 42,795 | 45,338 | ||||||||||||
| Interest expense | (1,015 | ) | (1,085 | ) | (3,125 | ) | (3,137 | ) | ||||||||
| Interest income | 3,634 | 3,151 | 11,202 | 7,798 | ||||||||||||
| Income before income taxes | 12,823 | 16,110 | 50,872 | 49,999 | ||||||||||||
| Income taxes | 3,857 | 5,093 | 15,842 | 15,577 | ||||||||||||
| Net income | $ | 8,966 | $ | 11,017 | $ | 35,030 | $ | 34,422 | ||||||||
| Net income per share: | ||||||||||||||||
| Class A common stock: | ||||||||||||||||
| Basic | $ | 0.67 | $ | 0.84 | $ | 2.63 | $ | 2.64 | ||||||||
| Diluted | $ | 0.60 | $ | 0.75 | $ | 2.36 | $ | 2.36 | ||||||||
| Class B common stock: | ||||||||||||||||
| Basic | $ | 0.44 | $ | 0.54 | $ | 1.71 | $ | 1.71 | ||||||||
| Diluted | $ | 0.44 | $ | 0.54 | $ | 1.71 | $ | 1.71 | ||||||||
| Gross profit as a % of sales | 28.54 | % | 28.57 | % | 28.48 | % | 28.23 | % | ||||||||
| Operating and administrative expense as a % of sales | 25.19 | % | 24.33 | % | 24.39 | % | 23.84 | % | ||||||||
| VILLAGE SUPER MARKET, INC. RECONCILIATION OF NON-GAAP MEASURE (In thousands) (Unaudited) | |
The following tables reconciles Net income to Adjusted net income and Operating and administrative expenses to Adjusted operating and administrative expenses:
| 13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
| April 27, 2024 | April 29, 2023 | April 27, 2024 | April 29, 2023 | |||||||||||||
| Net Income | $ | 8,966 | $ | 11,017 | $ | 35,030 | $ | 34,422 | ||||||||
| Adjustments to Operating Expenses: | ||||||||||||||||
| Store pre-opening costs (1) | $ | 907 | $ | — | $ | 907 | $ | — | ||||||||
| Litigation settlement gain (2) | — | (1,200 | ) | — | (1,200 | ) | ||||||||||
| Adjustments to Income Taxes: | ||||||||||||||||
| Tax impact of adjustments to operating expenses | (281 | ) | 372 | (281 | ) | 372 | ||||||||||
| Adjusted net income | $ | 9,592 | $ | 10,189 | $ | 35,656 | $ | 33,594 | ||||||||
| Operating and administrative expenses | $ | 137,650 | $ | 128,787 | $ | 404,419 | $ | 384,452 | ||||||||
| Adjustments to operating and administrative expenses | (907 | ) | 1,200 | (907 | ) | 1,200 | ||||||||||
| Adjusted operating and administrative expenses | $ | 136,743 | $ | 129,987 | $ | 403,512 | $ | 385,652 | ||||||||
| Adjusted operating and administrative expenses as a % of sales | 25.03 | % | 24.56 | % | 24.33 | % | 23.91 | % | ||||||||
(1) Fiscal 2024 pre-opening costs are associated with opening of the Old Bridge, NJ ShopRite replacement store opened on March 17, 2024.
(2) Fiscal 2023 litigation settlement gains are related to claims associated with the Fairway acquisition and liabilities associated thereto.
| Contact: | John Van Orden, CFO |
| (973) 467-2200 | |
| villageinvestorrelations@wakefern.com. |
FAQ
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