Village Super Market, Inc. Reports Results for the Second Quarter Ended January 23, 2021
05 March 2021 - 12:00AM
Village Super Market, Inc. (NASDAQ:VLGEA) (the "Company" or
"Village") today reported its results of operations for the second
quarter ended January 23, 2021.
Net income was $4,555,000 in the 13 weeks ended
January 23, 2021 compared to $2,005,000 in the 13 weeks ended
January 25, 2020. The 13 weeks ended January 25, 2020
includes a non-cash pension charge related to the termination of a
company-sponsored pension plan and other pension settlement charges
of $871,000 (net of tax), pre-opening costs related to the
Stroudsburg, Pennsylvania replacement store of $304,000 (net of
tax) and store closure costs and charges to write off the variable
lease obligations related to the old Stroudsburg store of $365,000
(net of tax). Excluding these items, net income increased 28% in
the 13 weeks ended January 23, 2021 compared to the prior
year. Net income increased due to increased same store sales
partially offset by lower sales volumes in Manhattan and higher
costs as we transition and integrate commissary operations into our
business.
Sales were $522,818,000 in the 13 weeks ended
January 23, 2021, an increase of 19.5% compared to the 13
weeks ended January 25, 2020. Sales increased due to the
Fairway acquisition on May 14, 2020, the opening of the Stroudsburg
replacement store on November 1, 2019 and a same store sales
increase of 6.5%. Same store sales increased due primarily to
increased customer demand across most stores due to the impact of
the COVID-19 pandemic. We continue to experience higher average
basket sizes and decreased transaction counts as customers
consolidate shopping trips. Digital sales growth accelerated
through both ShopRite from Home and partnerships with online
grocery picking and delivery services, increasing 176% in the 13
weeks ended January 23, 2021 compared to the 13 weeks ended
January 25, 2020. Demand remains high in most stores, however
sales at Fairway and Gourmet Garage locations in Manhattan have
been significantly negatively impacted due primarily to residential
population migration out of the city and less commuter and tourist
traffic during the COVID-19 pandemic. 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 27.13% in the 13 weeks ended January 23, 2021 compared to
26.96% in the 13 weeks ended January 25, 2020 due primarily to
higher margins associated with Fairway despite higher costs as we
transition and integrate commissary operations into our business.
Excluding the impact of Fairway, gross profit as a percentage of
sales decreased .15% due primarily to decreased departmental gross
margin percentages (.15%), an unfavorable change in product mix
(.05%) and increased warehouse assessment charges from Wakefern
(.36%) partially offset by increased patronage dividends and
rebates received from Wakefern (.15%) and lower promotional
spending (.26%).
Departmental gross profits, excluding the impact
of Fairway, decreased in the 13 weeks ended January 23, 2021
compared to the 13 weeks ended January 25, 2020 due primarily
to continued price investments resulting from ShopRite's Right
Price Promise pricing strategy introduced in October 2019. Both
product mix and departmental gross margin percentages were also
impacted by limitations in service departments and product
availability as a result of the COVID-19 pandemic.
Operating and administrative expense as a
percentage of sales decreased to 24.19% in the 13 weeks ended
January 23, 2021 compared to 24.63% in the 13 weeks ended
January 25, 2020. The 13 weeks ended January 25, 2020
includes a non-cash pension charge related to the termination of a
company-sponsored pension plan and other pension settlement charges
(.28%), pre-opening costs of the Stroudsburg, Pennsylvania
replacement store (.10%), store closure costs and charges to write
off the variable lease obligations of the old Stroudsburg store
(.12%). Excluding these items, operating and administrative expense
as a percentage of sales increased .06% in the 13 weeks ended
January 23, 2021 compared to the 13 weeks ended
January 25, 2020 due primarily to increased occupancy costs as
a result of the Fairway acquisition (.63%), increased external
costs associated with digital sales (.45%) and incremental costs
related to COVID-19, including enhanced wages and benefits and
expanded safety and sanitation protocols, (.07%) partially offset
by decreased payroll (.61%), other fringe benefits (.25%),
maintenance costs (.12%) and legal and consulting fees (.07%).
Payroll, other fringe benefits and maintenance costs decreased
primarily due to leverage from higher sales and reductions in
service department offerings partially offset by the addition of
Fairway and growth of ShopRite from Home.
Net income was $7,916,000 in the 26 weeks ended
January 23, 2021 compared to $4,572,000 in the 26 weeks ended
January 25, 2020. The 26 weeks ended January 25, 2020
includes a non-cash pension charge related to the termination of a
company-sponsored pension plan and other pension settlement charges
of $871,000 (net of tax), pre-opening costs related to the
Stroudsburg, Pennsylvania replacement store of $891,000 (net of
tax) and store closure costs and charges to write off the lease
asset and related obligations for the old Stroudsburg store of
$557,000 (net of tax). Excluding these items, net income increased
15% in the 26 weeks ended January 23, 2021 compared to the
prior year. Net income increased due to increased same store sales
partially offset by lower sales volumes in Manhattan and higher
costs as we transition and integrate commissary operations into our
business.
Village Super Market operates a chain of 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.
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: risks
and uncertainties related to the COVID-19 pandemic, including among
others, the duration and severity of the pandemic, shifts in
customers buying patterns, disruptions to supply chains, inability
of the workforce to work due to illness, quarantine or government
mandates, including travel restrictions and stay at home orders,
the effectiveness and duration of COVID-19 stimulus packages;
general 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; risks, uncertainties and challenges associated with the
Fairway acquisition, including under-performance relative to our
expectations, additional capital requirements, unforeseen expenses
or delays, imprecise assumptions or our inability to achieve
projected cost savings or other synergies, competitive factors in
the marketplace and difficulties integrating the business,
including merging company cultures, cultivating brand strategy,
expansion of food production and conforming the acquired company's
technology, standards, processes, procedures and controls; 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 |
|
26 Weeks Ended |
|
|
January 23,2021 |
|
January 25,2020 |
|
January 23,2021 |
|
January 25,2020 |
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
522,818 |
|
|
$ |
437,422 |
|
|
$ |
1,012,954 |
|
|
$ |
844,824 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
380,973 |
|
|
319,475 |
|
|
733,146 |
|
|
613,331 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
141,845 |
|
|
117,947 |
|
|
279,808 |
|
|
231,493 |
|
|
|
|
|
|
|
|
|
|
Operating and administrative
expense |
|
126,449 |
|
|
107,734 |
|
|
250,812 |
|
|
210,874 |
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
8,793 |
|
|
7,798 |
|
|
17,507 |
|
|
15,237 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
6,603 |
|
|
2,415 |
|
|
11,489 |
|
|
5,382 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(982 |
) |
|
(568 |
) |
|
(1,969 |
) |
|
(1,135 |
) |
|
|
|
|
|
|
|
|
|
Interest income |
|
874 |
|
|
1,030 |
|
|
1,766 |
|
|
2,289 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
6,495 |
|
|
2,877 |
|
|
11,286 |
|
|
6,536 |
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
1,940 |
|
|
872 |
|
|
3,370 |
|
|
1,964 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
4,555 |
|
|
$ |
2,005 |
|
|
$ |
7,916 |
|
|
$ |
4,572 |
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
Class A common stock: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.35 |
|
|
$ |
0.16 |
|
|
$ |
0.61 |
|
|
$ |
0.35 |
|
Diluted |
|
$ |
0.31 |
|
|
$ |
0.14 |
|
|
$ |
0.54 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
Class B common stock: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.23 |
|
|
$ |
0.10 |
|
|
$ |
0.39 |
|
|
$ |
0.23 |
|
Diluted |
|
$ |
0.23 |
|
|
$ |
0.10 |
|
|
$ |
0.39 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
Gross profit as a % of
sales |
|
27.13 |
% |
|
26.96 |
% |
|
27.62 |
% |
|
27.40 |
% |
Operating and administrative
expense as a % of sales |
|
24.19 |
% |
|
24.63 |
% |
|
24.76 |
% |
|
24.96 |
% |
Contact: |
John Van Orden, CFO |
|
(973) 467-2200 |
|
villageinvestorrelations@wakefern.com |
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