Weis Markets (WMK) Q3 2024 earnings summary

Executive summary

• Net sales increased 2.2% year-over-year to $1.19 billion for the quarter and 1.8% to $3.55 billion for the nine months, driven by retail price inflation and aided by a $4.58 million gain on fixed asset disposition.

• Comparable store sales rose 2.5% for the quarter and 2.0% for the nine months, with comparable store sales excluding fuel up 3.0% for the quarter and 2.2% year-to-date.

• Net income for the quarter was $25.8 million, up 11.3% year-over-year; nine-month net income was $75.3 million, down 9.7% from the prior year.

• The company operates 198 stores across seven states and continues to expand online and delivery offerings.

Financial highlights

• Gross profit increased 1.9% for the quarter and 0.7% for the nine months; gross margin slightly decreased to 24.5% for the quarter.

• Operating income was $29.6 million for the quarter, nearly flat year-over-year; nine-month operating income declined 17.1% to $89.4 million.

• Basic and diluted EPS for the quarter was $0.96, up from $0.86; nine-month EPS was $2.80, down from $3.10.

• Investment income rose sharply to $7.8 million for the quarter, driven by gains in equity securities.

• Cash flow from operations increased $57.2 million for the nine months, mainly due to a one-time working capital adjustment in 2023.

Outlook and guidance

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

• The company expects to maintain its investment portfolio and fund capital expenditures, acquisitions, and dividends through internal resources and a $30 million credit facility.

• Plans to complete the acquisition of two Sunnyway Foods stores in Q4 2024 to expand in Pennsylvania.

• Management notes progress in a post-inflationary environment, with continued focus on loyalty programs, price investments, and store efficiencies.