Village Super Market, Inc. Reports Results for the Second Quarter Ended January 26, 2019
March 05 2019 - 8:00AM
Village Super Market, Inc. (NASDAQ:VLGEA) today reported its
results of operations for the second quarter ended January 26,
2019.
Net income was $7,571,000 in the 13 weeks ended
January 26, 2019 compared to $9,511,000 in the 13 weeks ended
January 27, 2018. The 13 weeks ended January 27,
2018 includes a $2,726,000 non-cash reduction in deferred tax
expense as a result of the enactment of the Tax Cuts and Jobs Act
(the "Tax Act"). Excluding this item from the 13 weeks ended
January 27, 2018 net income increased 12% in the 13 weeks
ended January 26, 2019 compared to the prior year primarily
due to higher gross profit margins.
Sales were $428,128,000 in the 13 weeks ended
January 26, 2019, an increase of 2.4% compared to the 13 weeks
ended January 27, 2018. Sales increased 2.4% due
to the opening of the Bronx, New York City store on June 28, 2018
partially offset by a same store sales decrease of 0.1%. Same
store sales decreased due primarily to the impact of three
competitor store openings partially offset by the early release of
Supplemental Nutrition Assistance Program (SNAP) benefits in
January 2019. The Company expects same store sales in fiscal
2019 to range from flat to a 1.0% increase. New stores
and replacement stores are included in same store sales in the
quarter after the store has been in operation for four full
quarters. Store renovations and expansions are included
in same store sales immediately.
Gross profit as a percentage of sales increased
to 27.50% in the 13 weeks ended January 26, 2019 compared to
27.13% in the 13 weeks ended January 27, 2018 primarily due to
increased patronage dividends and other rebates from Wakefern,
increased departmental gross margin percentages and a favorable
change in product mix.
Operating and administrative expense as a
percentage of sales increased to 23.37% in the 13 weeks ended
January 26, 2019 compared to 23.25% in the 13 weeks ended
January 27, 2018 primarily due to increased payroll and fringe
benefit costs. Payroll increased due primarily to investments
in operational proficiency and other strategic initiatives.
Net income was $13,839,000 in the 26 weeks ended
January 26, 2019 compared to $12,528,000 in the 26 weeks ended
January 27, 2018. The 26 weeks ended January 26,
2019 includes a $290,000 (net of tax) gain for Superstorm Sandy
insurance proceeds received. The 26 weeks ended January 27,
2018 includes a $2,726,000 non-cash reduction in deferred tax
expense as a result of the Tax Act. Excluding these items from both
periods, net income increased 38% in the 26 weeks ended
January 26, 2019 compared to the prior year primarily due to
increased same store sales, higher gross profit margins and the
favorable impact of the Tax Act.
Village Super Market operates a chain of 30
supermarkets under the ShopRite name in New Jersey, Maryland,
northeastern Pennsylvania and 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:
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 26, 2019 |
|
January 27, 2018 (1) |
|
January 26, 2019 |
|
January 27, 2018 (1) |
|
|
|
|
|
|
|
|
Sales |
$ |
428,128 |
|
|
$ |
418,269 |
|
|
$ |
829,678 |
|
|
$ |
805,609 |
|
|
|
|
|
|
|
|
|
Cost of sales |
310,392 |
|
|
304,802 |
|
|
599,830 |
|
|
587,350 |
|
|
|
|
|
|
|
|
|
Gross profit |
117,736 |
|
|
113,467 |
|
|
229,848 |
|
|
218,259 |
|
|
|
|
|
|
|
|
|
Operating and
administrative expense |
100,036 |
|
|
97,248 |
|
|
196,330 |
|
|
190,452 |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
7,017 |
|
|
6,386 |
|
|
13,915 |
|
|
12,621 |
|
|
|
|
|
|
|
|
|
Operating income |
10,683 |
|
|
9,833 |
|
|
19,603 |
|
|
15,186 |
|
|
|
|
|
|
|
|
|
Interest expense |
(1,112 |
) |
|
(1,102 |
) |
|
(2,227 |
) |
|
(2,207 |
) |
|
|
|
|
|
|
|
|
Interest income |
1,305 |
|
|
864 |
|
|
2,483 |
|
|
1,764 |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
10,876 |
|
|
9,595 |
|
|
19,859 |
|
|
14,743 |
|
|
|
|
|
|
|
|
|
Income taxes |
3,305 |
|
|
84 |
|
|
6,020 |
|
|
2,215 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
7,571 |
|
|
$ |
9,511 |
|
|
$ |
13,839 |
|
|
$ |
12,528 |
|
|
|
|
|
|
|
|
|
Net income
per share: |
|
|
|
|
|
|
Class A common
stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.59 |
|
|
$ |
0.74 |
|
|
$ |
1.08 |
|
|
$ |
0.97 |
|
Diluted |
$ |
0.53 |
|
|
$ |
0.66 |
|
|
$ |
0.96 |
|
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
Class B common
stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.38 |
|
|
$ |
0.48 |
|
|
$ |
0.70 |
|
|
$ |
0.63 |
|
Diluted |
$ |
0.38 |
|
|
$ |
0.48 |
|
|
$ |
0.70 |
|
|
$ |
0.63 |
|
|
|
|
|
|
|
|
|
Gross profit as a % of
sales |
27.50 |
% |
|
27.13 |
% |
|
27.70 |
% |
|
27.09 |
% |
Operating and
administrative expense as a % of sales |
23.37 |
% |
|
23.25 |
% |
|
23.66 |
% |
|
23.63 |
% |
(1) The Company adopted ASU No. 2014-09,
“Revenue from Contracts with Customers (Topic 606),” using the full
retrospective approach in fiscal 2019. As a result of the adoption
of the standard, $1,181 and $2,094 of certain other income streams,
including commissions for gift card and lottery sales and service
fees for ShopRite From Home, that were previously presented as a
reduction in Operating expenses were reclassified to sales for the
13 and 26 week periods ended January 27, 2018,
respectively. Additionally, $294 and $341 of pharmacy fees
previously recorded as Cost of sales were reclassified as a
reduction of sales for the 13 and 26 week periods ended
January 27, 2018, respectively.
Contact: |
John Van Orden, CFO |
|
(973) 467-2200 |
|
john.vanorden@wakefern.com |
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