Weis Markets (WMK) Q2 2024 earnings summary

Executive summary

• Weis Markets operates 196 stores in Pennsylvania and six surrounding states, offering a broad range of grocery and related products, with 53% of products self-distributed and the remainder supplied by vendors and wholesalers.

• The company continues to expand customer conveniences, including online ordering and home delivery at all locations.

• Second quarter 2024 net sales rose 0.2% year-over-year to $1.18 billion, with comparable store sales up 0.5% and 4.0% on a two-year stacked basis.

• Net income for Q2 2024 was $26.3 million, down 23.4% year-over-year; EPS was $0.98, down from $1.27 in Q2 2023.

• Results were impacted by the Easter holiday shift and a challenging market environment with cautious consumer behavior.

Financial highlights

• Net sales for Q2 2024 were $1.18 billion, up 0.2% year-over-year; net sales for the first 26 weeks were $2.36 billion, up 1.6%.

• Net income for the first 26 weeks was $49.4 million, down 17.7% year-over-year; EPS dropped to $1.84.

• Gross profit margin for Q2 2024 was 24.9%, down from 25.4% in Q2 2023; operating margin was 2.7%, down from 3.9%.

• Second quarter income from operations decreased 28.8% to $32.49 million year-over-year.

• Comparable store sales increased 0.5% year-over-year for Q2 2024 and 1.8% for the first 26 weeks; adjusted for Easter shift, Q2 comparable store sales increased 1.7%.

Outlook and guidance

• Management anticipates overall product costs to increase due to recent inflationary trends in the food retail industry.

• Management expects continued challenges from cautious consumer behavior and competitive pressures.

• The company expects to continue regular quarterly cash dividends, with the amount subject to board discretion based on results and financial condition.

• Two-year stacked comparable store sales provided as a non-GAAP metric to offer additional context.