Weis 2Q sales up but profits dip on wage hikes

Weis Markets said sales in its fiscal second quarter improved by 1.7% on higher store traffic, but profits were down as a result of increasing employee wages and the shift of the Easter holiday, which also impacted sales.

For the period, which ended June 25, sales totaled $730.4 million, while comparable-store sales improved by 1.8%. Sales were dampened by about 1% as a result the Easter holiday falling in the first quarter of this year, vs. the second quarter last year, the Sunbury, Pa.-based retailer said.

Net earnings of $15.3 million for the period decreased by 8.3% as compared to the same period last year, impacted by the Easter sales shift as well as higher employee wages. Earnings per share totaled 57 cents, down from 62 cents last year.

For the 26-week period, sales increased 2.6% to $1.5 billion while comparable store sales increased 2.7%. Year-to-date operating income increased 21.8% to $55.3 million while net income increased 18.1% to $35.4 million.

"Wage increase and Easter calendar shift aside, we continue to post solid results which we attribute to our long-term price investments, increasingly efficient logistics and improved customer experience," Jonathan H. Weis, Weis Markets chairman, president and CEO, said. "During the period, we saw a strong increase in customer traffic which helped generate significant sales increases in produce, deli/food service and pharmacy."

The Sunbury, Pa., company has announced plans to acquire 38 Food Lion stores in Maryland, Virginia and Delaware and five Mars Super Markets in Baltimore. The conversion of the Mars stores to the Weis brand is expected to begin shortly.

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