Higher costs bite into Q1 bottom line at Weis Markets

Weis Markets took an earnings hit from elevated costs in the fiscal 2023 first quarter despite generating solid sales gains atop robust prior-year results.

For the quarter ended April 1, net sales totaled more than $1.14 billion, up 3.7% from over $1.10 billion a year earlier, Sunbury, Pennsylvania-based Weis Markets said on Tuesday. The uptick built on a 9.7% increase in the fiscal 2022 first quarter by the Mid-Atlantic grocer.

Comparable-store sales for the first quarter advanced 3.1% year over year (3.6% excluding fuel), adding to a 9.4% annual gain (7.6% excluding fuel) in the 2022 quarter for two-year growth of 12.5% (11.2% excluding fuel).

The first-quarter top-line performance followed a robust fiscal 2022 fourth quarter, when Weis Markets tallied year-over-year increases of 18% in net sales (including an extra week) and 9.5% in comp-store sales.

“Our first-quarter sales and income results are in line with our expectations in an inflationary environment,” Chairman, President and CEO Jonathan Weis said in a statement.

Weis added that the supermarket chain has remained focused on lending a hand to food shoppers grappling with still-high grocery prices.

“Record inflation continues to be a major challenge for our customers,” he stated. “In response, we expanded our ‘Low, Low Price’ program, which offers strong, everyday savings and values on more than 9,000 products.”

On the earnings side, Weis Markets posted 2023 first-quarter net income of $25.81 million, or 96 cents per share, down 17.8% from $31.39 million, or $1.17 cents per share, in the 2022 quarter.

The company had closed out fiscal 2022 with a fourth-quarter net earnings gain of 27.7%, with the bottom line up 15% for the full year.

“Higher product, supply chain and operating costs had a significant impact on our income results compared to last year,” Weis commented on first-quarter results. “We are grateful to our associates who helped us navigate these challenges and serve our customers.”

Overall, Weis Markets operates 197 stores—the same as a year ago—in Pennsylvania, Maryland, Delaware, New Jersey, New York, West Virginia and Virginia.

In late April, Weis told shareholders at Weis Markets’ annual meeting that the company is raising capital expenditures to more than $160 million for fiscal 2023. Plans call for 20 store remodels, one store expansion, construction of one new store (to open in 2024) and the addition of six fuel centers, among other projects.