Business Context and Reporting Period
Company: WEIS MARKETS, INC. (WMK)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Quarter ended September 27, 2025 (13 weeks) and Year-to-Date (39 weeks).
Operations: A conventional supermarket chain operating 201 stores across Pennsylvania and six surrounding states. The company recently opened new locations in Charlotte Hall and Leonardtown, Maryland, and acquired a former Saylor's Market store in Newville, PA.
Key Financial Metrics
| Metric (in thousands, except per share) | 13 Weeks Ended Sept 27, 2025 |
13 Weeks Ended Sept 28, 2024 |
39 Weeks Ended Sept 27, 2025 |
39 Weeks Ended Sept 28, 2024 |
|---|---|---|---|---|
| Total Revenue | $1,242,307 | $1,190,107 | $3,661,879 | $3,558,777 |
| Net Income | $18,233 | $25,840 | $65,237 | $75,263 |
| Earnings Per Share (Diluted) | $0.74 | $0.96 | $2.51 | $2.80 |
| Operating Income | $22,375 | $29,558 | $77,347 | $89,409 |
| Operating Margin | 1.8% | 2.5% | 2.1% | 2.5% |
| Cash from Operations (39 weeks) | $120,612 | $100,324 | ||
| Cash & Equivalents (End of Period) | $54,650 | |||
| Marketable Securities | $122,944 | |||
| Debt Availability | $17.4 million (Net of letters of credit) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 4.4% quarter-over-quarter (QoQ) and 2.9% year-to-date (YTD). Comparable store sales rose 2.5% QoQ and 1.7% YTD.
- Profitability Decline: Net income decreased 29.4% QoQ and 13.3% YTD. Operating income dropped 24.3% QoQ due to higher operating expenses.
- Expense Increases: Operating, general, and administrative (OG&A) expenses rose 7.9% QoQ. Drivers included higher employee wages, health care costs, depreciation from new/acquired stores, and $1.2 million in transaction costs related to a share purchase.
- Investment Income: Investment income decreased significantly (58.3% QoQ) due to lower unrealized gains on equity securities and reduced interest rates on fixed income holdings.
- Share Count Reduction: The company repurchased 2,153,846 shares from the Weis family trusts in June 2025 for $140 million, reducing outstanding shares by approximately 8%.
Guidance, Outlook, and Risks
- Capital Expenditures: Management anticipates continued investment in new superstores, remodeling, and distribution upgrades. Capital expenditures were 4.2% of sales YTD, up from 3.0% in the prior year.
- Tax Legislation: The "One Big Beautiful Bill Act" (OBBBA) signed in July 2025 allows for 100% bonus depreciation and full expensing of R&D. This is expected to decrease 2025 cash taxes with no material impact on the effective tax rate.
- Liquidity Strategy: The company divested $31.6 million in marketable securities subsequent to the quarter-end to bolster cash liquidity for working capital.
- Risks:
- Tariffs: Exposure to global economic events and potential new tariffs on imported goods, which could increase material costs and disrupt supply chains.
- Competition: Intense competition from regional and national retailers with greater financial resources.
- Inflation: Anticipated increases in product costs despite recent deflation in some commodities.
Investor Verification Checklist
- Share Repurchase Impact: Verify the long-term effect of the $140 million related-party share buyback on earnings per share and cash reserves.
- Expense Run-Rate: Assess whether the 7.9% QoQ increase in OG&A expenses is a one-time anomaly (due to transaction costs and asset gains/losses) or a structural increase in labor and fixed costs.
- Investment Portfolio Volatility: Monitor the unrealized gains/losses on the $122.9 million marketable securities portfolio, which significantly impacts non-operating income.
- Comparable Store Sales: Confirm the sustainability of the 2.5% QoQ comparable store sales growth in a competitive retail environment.
- Debt Covenants: Review the $100 million credit facility terms to ensure compliance given the recent reduction in cash and marketable securities.