Weis Markets (WMK) investor relations material

Executive summary

• Net sales increased 4.6% year-over-year to $1.28 billion for the quarter and $2.53 billion for the half-year, driven by retail price inflation in grocery, pharmacy, fresh products, and fuel.

• Comparable store sales rose 2.3% for the quarter and 2.2% for the half-year, with two-year stacked growth of 4.1% and 3.6%, respectively.

• Net income was $22.86 million for the quarter, down 9.6% year-over-year; year-to-date net income rose 13.1% to $50.71 million.

• Gross profit margin improved to 25.8% for the quarter and 26.1% for the half-year, reflecting a 0.5% and 1.0% increase, respectively.

Financial highlights

• Operating income for the quarter was $29.1 million, down from $30.2 million last year; half-year operating income rose 24.6% to $64.8 million.

• Operating, general, and administrative expenses increased 8.3% for the quarter and 7.4% for the half-year, mainly due to higher employee costs, outside services, and utilities.

• Cash flow from operations rose by $33.9 million to $95.3 million for the half-year, driven by higher net income and lower liabilities.

• Investment income declined 8.8% for the quarter and 45.5% for the half-year, reflecting lower returns on marketable securities.

• Earnings per share for the quarter were $0.92, down from $0.96; year-to-date EPS was $2.05, up from $1.69.

Outlook and guidance

• Management anticipates continued product cost increases due to inflationary trends in the food retail industry.

• The company expects to fund capital expenditures, acquisitions, and dividends through cash, investments, and its revolving credit facility.

• Customers remain focused on affordability and value, influencing shopping behavior.

• Increased investment in promotions and loyalty marketing to support sales growth.