Weis Markets sees Q2 earnings fall despite sales gains

Mid-Atlantic supermarket chain Weis Markets built on strong prior-year sales growth in its fiscal 2023 second quarter yet posted another period of decreased earnings.

For the quarter ended July 1, net sales advanced 3.8% to $1.18 billion from nearly $1.14 billion a year earlier, Sunbury, Pennsylvania-based Weis Markets reported Monday after the market close. The uptick continued the momentum from a 3.7% increase in the first quarter and came atop an 8.4% gain in the 2022 second quarter, when the retailer rebounded following a tough comparison against sharp growth during the pandemic.

Similarly, Weis Markets added to robust same-store gains from a year ago. Comparable-store sales for Q2 climbed 3.5% (4.8% excluding fuel) year over year, compared with 3.1% (3.6% excluding fuel) in Q1 and 8.4% (6% excluding fuel) in Q2 2022. On a two-year stack, the grocer’s comp-store sales rose 11.9% (10.8% excluding fuel).

“In the second quarter, we generated solid results due to the hard work and commitment of our associates at every level of our company,” Chairman and CEO Jonathan Weis said in a statement. “We continue to make strategic investments for long-term profitable growth, which benefits our associates, customers, communities, and shareholders.

In the 26-week first half, net sales totaled $2.32 billion, up 3.8% from $2.24 billion a year earlier. Comp-store sales grew 3.3% year over year (4.2% excluding fuel) and were up 12.2% (11% excluding fuel) on a two-year basis, versus an 8.9% gain (6.8% excluding fuel) in the 2022 first half.

“We are keenly aware that our customers are looking for value and savings as they navigate the challenges of inflation, higher interest rates and reduced government benefits,” Weis noted.

To provide inflation relief to consumers, Weis Markets in June extended its “Low, Low Price” savings program to the breakfast foods category. The move brought lower everyday prices on over 700 of the chain’s most popular breakfast items.

At the bottom line, Weis Markets tallied 2023 second-quarter net income of $34.3 million, or $1.35 per share, down 5.5% from $36.3 million, or $1.35 per share, in the 2022 quarter. The company recorded first-half 2023 net earnings of $60.1 million, or $2.23 per share, a decline of 11.2% from $67.7 million, or $2.52 per share, in the 2022 half.

In reporting a 17.8% net income decrease for the first quarter, Weis had commented that higher product, supply chain and operating costs “had a significant impact on our income results compared to last year.”

Overall, Weis Markets operates 197 supermarkets in Pennsylvania, Maryland, Delaware, New Jersey, New York, West Virginia and Virginia, the same number of locations as a year ago.

The grocer in late April unveiled an upgraded, $160 million capital spending plan that calls for 20 store remodels, one store expansion and one new store that will open in 2024. On May 11, the company debuted a remodel of its Duryea, Pennsylvania, store with a refreshed interior design; a beer and wine cafe with adult slushie machines; a new deli with a meal center; upgraded produce, bakery and seafood sections; and expanded variety across the store.

Weis Markets also plans to build a 64,000-square-foot supermarket as part of Bayberry Town Center, a 280,000-square-foot shopping center in the 1,500-acre Village of Bayberry master-planned community, which is due to break ground this fall in Middletown, Delaware. Expected to open in 2025, the store is slated to include a pharmacy, a Weis 2 Go online grocery pickup station and a fuel center.