Village Super Market, Inc. (NASDAQ:VLGEA) (the "Company" or
"Village") today reported its results of operations for the third
quarter ended April 24, 2021.
Net income was $2,574,000 in the 13 weeks ended
April 24, 2021 compared to $11,152,000 in the 13 weeks ended
April 25, 2020. The 13 weeks ended April 24, 2021
includes a gain on the sale of a pharmacy prescription list related
to the Silver Spring store, net of store closing costs, of $278,000
(net of tax) and the 13 weeks ended April 25, 2020 includes a
gain on the sale of pharmacy prescription lists related to three
store pharmacies closed in March 2020 of $854,000 (net of tax) and
pension settlement charges of $83,000 (net of tax). Excluding these
items, net income decreased 78% in the 13 weeks ended
April 24, 2021 compared to the prior year. Net income
decreased compared to the prior year period due primarily to the
sharp rise in sales volumes at the beginning of the COVID-19
pandemic in March 2020 that resulted in higher gross profit margins
and sales leverage on operating expenses during the 13 weeks ended
April 25, 2020. Additionally, the 13 weeks ended
April 24, 2021 were negatively impacted by lower sales volumes
in Manhattan and higher costs as we transition and integrate
commissary operations into our business.
Sales were $481,093,000 in the 13 weeks ended
April 24, 2021, an increase of 5.0% compared to the 13 weeks
ended April 25, 2020. Sales increased in the 13 weeks
ended April 24, 2021 due to the Fairway acquisition on May 14,
2020 partially offset by a same store sales decrease of 5.5%. Same
store sales decreased in the 13 weeks ended April 24, 2021 due
primarily to the unprecedented sales levels at the beginning of the
COVID-19 outbreak in our trade area in March 2020. On a two-year
stacked basis, same store sales increased 7.7% in the 13 weeks
ended April 24, 2021 compared to the 13 weeks ended April 27,
2019.
The Company expects same store sales in fiscal
2021 to range from an increase of 1.0% to 2.0% compared to fiscal
2020. 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 decreased
to 27.73% in the 13 weeks ended April 24, 2021 compared to
28.34% in the 13 weeks ended April 25, 2020. Higher margins
associated with Fairway increased gross profit (.70%) 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 1.31% due primarily to decreased
departmental gross margin percentages (1.00%), increased warehouse
assessment charges from Wakefern (.59%) and higher promotional
spending (.21%) partially offset by favorable changes in product
mix (.46%), and increased patronage dividends and rebates received
from Wakefern (.03%). These trends are due primarily to the
disproportionately high sales levels at the beginning of the
pandemic during the 13 weeks ended April 25, 2020 which
favorably impacted departmental gross profit margins through
reduced shrink costs, reduced promotional spending due to decreased
sale item penetration, increased sales leverage on fixed warehouse
assessment charges from Wakefern and resulted in a lesser mix of
higher margin perishable items. Additionally, departmental gross
profits decreased due partly to continued price investments as part
of ShopRite's Right Price Promise pricing strategy.
Operating and administrative expense as a
percentage of sales increased to 25.18% in the 13 weeks ended
April 24, 2021 compared to 23.34% in the 13 weeks ended
April 25, 2020. The 13 weeks ended April 24, 2021
includes a gain on the sale of a pharmacy prescription list related
to the Silver Spring store, net of store closing costs, (.08%) and
the 13 weeks ended April 25, 2020 includes a gain on the sale
of pharmacy prescription lists related to three store pharmacies
closed in March 2020 (.27%) and a pension settlement charge of
(.03%). Excluding these items, operating and administrative expense
as a percentage of sales increased 1.68% in the 13 weeks ended
April 24, 2021 compared to the 13 weeks ended April 25,
2020 due primarily to increased occupancy costs as a result of the
Fairway acquisition (0.99%), increased external fees and
transportation costs associated with digital sales (.54%),
increased payroll (.83%) and increased facility costs, including
utilities, repairs and maintenance (.36%), partially offset by
decreased costs related to COVID-19, including enhanced wages and
benefits, security and outside sanitation services (1.13%). Payroll
and facilities costs increased primarily due to reduced sales
leverage, increasing wage rates and the addition of Fairway.
Net income was $10,490,000 in the 39 weeks ended
April 24, 2021 compared to $15,724,000 in the 39 weeks ended
April 25, 2020. The 39 weeks ended April 24, 2021
includes a gain on the sale of a pharmacy prescription list related
to the Silver Spring store, net of store closing costs, of $278,000
(net of tax). The 39 weeks ended April 25, 2020 includes a
gain on the sale of pharmacy prescription lists related to three
store pharmacies closed in March 2020 of $854,000 (net of tax), a
non-cash pension charge related to the termination of a
company-sponsored pension plan and other pension settlement charges
of $954,000 (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 decreased
40% in the 39 weeks ended April 24, 2021 compared to the prior
year. Net income decreased due primarily to 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 |
|
39 Weeks Ended |
|
April 24,2021 |
|
April 25,2020 |
|
April 24,2021 |
|
April 25,2020 |
|
|
|
|
|
|
|
|
Sales |
$ |
481,093 |
|
|
|
$ |
458,292 |
|
|
|
$ |
1,494,047 |
|
|
|
$ |
1,303,116 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
347,671 |
|
|
|
328,391 |
|
|
|
1,080,817 |
|
|
|
941,722 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
133,422 |
|
|
|
129,901 |
|
|
|
413,230 |
|
|
|
361,394 |
|
|
|
|
|
|
|
|
|
|
Operating and administrative
expense |
121,156 |
|
|
|
106,987 |
|
|
|
371,968 |
|
|
|
317,861 |
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
8,418 |
|
|
|
7,678 |
|
|
|
25,925 |
|
|
|
22,914 |
|
|
|
|
|
|
|
|
|
|
Operating income |
3,848 |
|
|
|
15,236 |
|
|
|
15,337 |
|
|
|
20,619 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
(994 |
) |
|
|
(563 |
) |
|
|
(2,963 |
) |
|
|
(1,698 |
) |
|
|
|
|
|
|
|
|
|
Interest income |
904 |
|
|
|
910 |
|
|
|
2,670 |
|
|
|
3,199 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
3,758 |
|
|
|
15,583 |
|
|
|
15,044 |
|
|
|
22,120 |
|
|
|
|
|
|
|
|
|
|
Income taxes |
1,184 |
|
|
|
4,431 |
|
|
|
4,554 |
|
|
|
6,396 |
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
2,574 |
|
|
|
$ |
11,152 |
|
|
|
$ |
10,490 |
|
|
|
$ |
15,724 |
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
Class A common stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.20 |
|
|
|
$ |
0.86 |
|
|
|
$ |
0.80 |
|
|
|
$ |
1.22 |
|
|
Diluted |
$ |
0.18 |
|
|
|
$ |
0.77 |
|
|
|
$ |
0.72 |
|
|
|
$ |
1.09 |
|
|
|
|
|
|
|
|
|
|
Class B common stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.13 |
|
|
|
$ |
0.56 |
|
|
|
$ |
0.52 |
|
|
|
$ |
0.79 |
|
|
Diluted |
$ |
0.13 |
|
|
|
$ |
0.56 |
|
|
|
$ |
0.52 |
|
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
Gross profit as a % of
sales |
27.73 |
|
% |
|
28.34 |
|
% |
|
27.66 |
|
% |
|
27.73 |
|
% |
Operating and administrative
expense as a % of sales |
25.18 |
|
% |
|
23.34 |
|
% |
|
24.90 |
|
% |
|
24.39 |
|
% |
Contact: |
John Van Orden, CFO |
|
(973) 467-2200 |
|
villageinvestorrelations@wakefern.com |
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