Weis Markets closes out fiscal year on upside

Weis Markets Inc. said store-level initiatives helped the company finish its 2018 fiscal year with a sales gain, including a jump in online sales.

At the bottom line, the Sunbury, Pa.-based regional grocer cycled through a prior-year income tax benefit from federal tax reform, which resulted in net earnings declines for the fourth quarter and full year.

For the quarter ended Dec. 29, Weis Markets posted net sales of nearly $893 million, a 1% increase from $883.7 million a year earlier. Same-store sales inched up 0.9%.

The retailer attributed the net and comparable-store sales gains to targeted holiday promotions through its loyalty card program, along with improved store-level efficiencies, inventory management and price optimization.

Fourth-quarter net income totaled just over $13.2 million, or 49 cents per share, compared with $26.9 million, or $2.37 per share, a year ago. Weis Markets noted that in 2017 it saw a $49.3 million decrease in deferred income tax due to the enactment of the federal Tax Cuts and Jobs Act, which boosted fourth-quarter and full-year earnings. The 2018 had no such benefit, which accounted for the negative year-over-year comparison, the company said.

"We made significant forward progress in 2018 by driving sales, investing in our store base and information technology and by improving store-level efficiencies. The result was a 9.4% increase in annual operating income and increased comparable-store sales in 2018," Weis Markets Chairman and CEO Jonathan Weis said in a statement.

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“During the year, we also expanded online ordering with in-store pickup and home delivery to 173 stores, which resulted in more than 100,000 orders and a 33.2% increase in online sales,” he added.

The Weis 2 Go click-and-collect service is available at 89 stores, where customers pick up online grocery orders at a designated drive-through area. Weis Markets partners with Shipt for home delivery and now offers the service through 173 stores.

Weis Markets said fiscal 2018 net sales came in at a record $3.51 billion, up 1.2% from $3.47 billion in 2017. Comp-store sales rose 0.7% year over year. Operating income climbed to $83.6 million from $76.4 million.

Full-year net earnings fell to $62.7 million, or $2.33 per share, reflecting the impact of the income tax benefit in fiscal 2017, when net income totaled $98.4 million, or $3.66 per share.

During 2018, Weis Markets opened two new stores, closed five stores and completed expansions/remodels of three locations, finishing the year with 202 supermarkets in Pennsylvania, Maryland, Delaware, New Jersey, New York, West Virginia and Virginia. Currently, the retailer operates 200 stores after having closed two locations this past January.

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