Village Super Market, Inc. Reports Results for the Third Quarter Ended April 27, 2019
04 June 2019 - 10:00PM
Village Super Market, Inc. (NASDAQ:VLGEA) today reported its
results of operations for the third quarter ended April 27,
2019.
Net income was $4,970,000 in the 13 weeks ended
April 27, 2019 compared to $6,542,000 in the 13 weeks ended
April 28, 2018. The 13 weeks ended April 28, 2018
includes a $574,000 non-cash reduction in deferred tax expense as a
result of the impact of the Tax Cuts and Jobs Act (the "Tax Act")
on return to provision adjustments. Excluding this item from the 13
weeks ended April 28, 2018 net income decreased 17% in the 13
weeks ended April 27, 2019 compared to the prior year
primarily due to a decrease in same store sales of 2.4% and higher
operating expenses.
Sales were $395,458,000 in the 13 weeks ended
April 27, 2019, flat compared to the 13 weeks ended
April 28, 2018. Sales increased due to the opening of
the Bronx, New York City store on June 28, 2018 offset by a same
store sales decrease of 2.4%. Same store sales decreased due
primarily to the impact of three competitor store openings, the
early release of Supplemental Nutrition Assistance Program ("SNAP")
benefits in January 2019 and a decreased number of winter weather
events. The Company expects same store sales in fiscal 2019
to range from a 1.0% decrease to flat. New stores and
replacement stores are included in same store sales in the quarter
after the store has been in operation for four full
quarters. Store renovations and expansions are included
in same store sales immediately.
Gross profit as a percentage of sales increased
to 27.97% in the 13 weeks ended April 27, 2019 compared to
27.77% in the 13 weeks ended April 28, 2018 primarily due to
increased patronage dividends and other rebates from Wakefern,
increased departmental gross margin percentages and a favorable
change in product mix partially offset by higher promotional
spending.
Operating and administrative expense as a
percentage of sales increased to 24.62% in the 13 weeks ended
April 27, 2019 compared to 23.96% in the 13 weeks ended
April 28, 2018. The 13 weeks ended April 28, 2018
included credits received related to multi-employer health and
welfare benefits (.21%) and pre-opening costs related to the Bronx,
NY store (.07%). Excluding these items, operating and
administrative expense as a percentage of sales increased .52% in
the 13 weeks ended April 27, 2019 compared to the 13 weeks
ended April 28, 2018 due primarily to increased payroll and
fringe benefit costs partially offset by decreased legal and
consulting fees.
Net income was $18,810,000 in the 39 weeks ended
April 27, 2019 compared to $19,070,000 in the 39 weeks ended
April 28, 2018. The 39 weeks ended April 27, 2019
includes a $290,000 (net of tax) gain for Superstorm Sandy
insurance proceeds received. The 39 weeks ended April 28, 2018
includes a $3,300,000 non-cash reduction in deferred tax expense as
a result of the Tax Act. Excluding these items from both periods,
net income increased 17% in the 39 weeks ended April 27, 2019
compared to the prior year primarily due to higher gross profit
margins and the favorable impact of the Tax Act.
Village Super Market operates a chain of 30
supermarkets under the ShopRite name in New Jersey, Maryland,
northeastern Pennsylvania and New York City.
Forward Looking Statements
All statements, other than statements of
historical fact, included in this Press Release are or may be
considered forward-looking statements within the meaning of federal
securities law. The Company cautions the reader that there is no
assurance that actual results or business conditions will not
differ materially from future results, whether expressed, suggested
or implied by such forward-looking statements. The Company
undertakes no obligation to update forward-looking statements to
reflect developments or information obtained after the date hereof.
The following are among the principal factors that could cause
actual results to differ from the forward-looking statements:
economic conditions; competitive pressures from the Company’s
operating environment; the ability of the Company to maintain and
improve its sales and margins; the ability to attract and retain
qualified associates; the availability of new store locations; the
availability of capital; the liquidity of the Company; the success
of operating initiatives; consumer spending patterns; the impact of
changing energy prices; increased cost of goods sold, including
increased costs from the Company’s principal supplier, Wakefern;
disruptions or changes in Wakefern's operations; the results of
litigation; the results of tax examinations; the results of union
contract negotiations; competitive store openings and closings; the
rate of return on pension assets; and other factors detailed herein
and in the Company’s filings with the SEC.
VILLAGE SUPER MARKET, INC.CONSOLIDATED STATEMENTS
OF OPERATIONS(In thousands, except per share amounts)
(Unaudited)
|
13 Weeks Ended |
|
39 Weeks Ended |
|
April 27,2019 |
|
April 28,2018 (1) |
|
April 27,2019 |
|
April 28,2018 (1) |
|
|
|
|
|
|
|
|
Sales |
$ |
395,458 |
|
|
$ |
395,437 |
|
|
$ |
1,225,137 |
|
|
$ |
1,201,045 |
|
|
|
|
|
|
|
|
|
Cost of sales |
284,847 |
|
|
285,608 |
|
|
884,678 |
|
|
872,959 |
|
|
|
|
|
|
|
|
|
Gross profit |
110,611 |
|
|
109,829 |
|
|
340,459 |
|
|
328,086 |
|
|
|
|
|
|
|
|
|
Operating and administrative
expense |
97,351 |
|
|
94,732 |
|
|
293,680 |
|
|
285,182 |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
6,566 |
|
|
6,083 |
|
|
20,481 |
|
|
18,704 |
|
|
|
|
|
|
|
|
|
Operating income |
6,694 |
|
|
9,014 |
|
|
26,298 |
|
|
24,200 |
|
|
|
|
|
|
|
|
|
Interest expense |
(1,106 |
) |
|
(1,133 |
) |
|
(3,334 |
) |
|
(3,340 |
) |
|
|
|
|
|
|
|
|
Interest income |
1,402 |
|
|
1,012 |
|
|
3,886 |
|
|
2,776 |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
6,990 |
|
|
8,893 |
|
|
26,850 |
|
|
23,636 |
|
|
|
|
|
|
|
|
|
Income taxes |
2,020 |
|
|
2,351 |
|
|
8,040 |
|
|
4,566 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
4,970 |
|
|
$ |
6,542 |
|
|
$ |
18,810 |
|
|
$ |
19,070 |
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
Class A common stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.39 |
|
|
$ |
0.51 |
|
|
$ |
1.46 |
|
|
$ |
1.48 |
|
Diluted |
$ |
0.35 |
|
|
$ |
0.45 |
|
|
$ |
1.31 |
|
|
$ |
1.32 |
|
|
|
|
|
|
|
|
|
Class B common stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.25 |
|
|
$ |
0.33 |
|
|
$ |
0.95 |
|
|
$ |
0.96 |
|
Diluted |
$ |
0.25 |
|
|
$ |
0.33 |
|
|
$ |
0.95 |
|
|
$ |
0.96 |
|
|
|
|
|
|
|
|
|
Gross profit as a % of
sales |
27.97 |
% |
|
27.77 |
% |
|
27.79 |
% |
|
27.32 |
% |
Operating and administrative
expense as a % of sales |
24.62 |
% |
|
23.96 |
% |
|
23.97 |
% |
|
23.73 |
% |
(1) The Company adopted ASU No. 2014-09,
“Revenue from Contracts with Customers (Topic 606),” using the full
retrospective approach in fiscal 2019. As a result of the adoption
of the standard, $952 and $3,044 of certain other income streams,
including commissions for gift card and lottery sales and service
fees for ShopRite From Home, that were previously presented as a
reduction in Operating expenses were reclassified to sales for the
13 and 39 week periods ended April 28, 2018, respectively.
Additionally, $123 and $463 of pharmacy fees previously recorded as
Cost of sales were reclassified as a reduction of sales for the 13
and 39 week periods ended April 28, 2018, respectively.
Contact: |
John Van Orden, CFO |
|
(973) 467-2200 |
|
john.vanorden@wakefern.com |
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