Village Super Market posted third-quarter sales gains of 3.2% over year-ago levels, but said net income was down 18.6%, to about $9 million.
The company said that operating and administrative expenses as a percent of sales increased nearly a full percentage point, to 25.19% of sales, in part due to higher labor and fringe benefit costs. The labor and benefit costs were primarily due to minimum wage and demand-driven pay rate increases and higher union health and welfare plan costs, Village said.
In addition, gross profit as a percentage of sales decreased to 28.54% vs. a year ago, due primarily to higher promotional spending and an unfavorable change in product mix, partially offset by higher patronage dividends and rebates received from co-op operator Wakefern Food Corp., decreased warehouse assessment charges from Wakefern, and decreased last-in/first-out inventory (LIFO) charges.
Adjusted net income was down 6%, to about $9.6 million, reflecting $907,000 in store pre-opening costs in the recent quarter and one-time litigation gains totaling $1.2 million in the year-ago period.
Sales for the quarter totaled $546.4 million, driven in part by a 2.3% gain in same-store sales. Same store sales increased due primarily to retail price inflation, digital sales growth, higher pharmacy sales, and continued growth in recently remodeled stores, the company said. Same-store digital sales were up 9% in the quarter.
The opening of a replacement store in Old Bridge, N.J., in March also helped lift sales in the quarter, partially offset by the closure of a Gourmet Garage location last November.
Village, which is a member of the Wakefern Food Corp. wholesale and retail cooperative, operates 34 supermarkets in New Jersey, New York, Maryland, and Pennsylvania under the ShopRite and Fairway banners and three Gourmet Garage specialty markets in New York City.
Through the first three quarters, Village posted sales gains of 2.8%, to $1.66 billion, driven by same-store sales gains of 2.2%. Same-store digital sales for the 39-week period were up 12% vs. the year-ago span.
Net income through three quarters was up 1.8%, to $35 million, and adjusted net income rose 6%, to $35.7 million.
