Business Context and Reporting Period
Company: Weis Markets, Inc. (WMK)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 27, 2026 (13 weeks) and 26 weeks
Business Overview: A conventional supermarket chain operating 202 stores across Pennsylvania and six surrounding states. The company operates a single retail segment selling groceries, pharmacy products, fuel, and general merchandise.
Key Financial Metrics
| Metric | 13 Weeks Ended June 27, 2026 |
26 Weeks Ended June 27, 2026 |
|---|---|---|
| Total Revenue | $1,275.3 million | $2,531.2 million |
| Net Income | $22.9 million | $50.7 million |
| Earnings Per Share (Diluted) | $0.92 | $2.05 |
| Gross Profit Margin | 25.8% | 26.1% |
| Operating Margin | 2.3% | 2.6% |
| Cash from Operations | N/A | $95.3 million |
| Cash & Equivalents | $103.5 million | $103.5 million |
| Marketable Securities | $104.5 million | $104.5 million |
| Debt Availability | $23.3 million | $23.3 million |
Note: Debt availability reflects the revolving credit facility net of letters of credit. No long-term debt principal is outstanding.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 4.6% year-over-year for both the 13-week and 26-week periods, driven by retail price inflation in grocery, pharmacy, and fuel categories.
- Comparable Store Sales: Increased 2.3% (13 weeks) and 2.2% (26 weeks) year-over-year. Excluding fuel, comparable sales decreased 0.4% (13 weeks) but increased 0.4% (26 weeks).
- Profitability: Net income decreased 9.6% for the 13-week period ($22.9M vs. $25.3M) but increased 13.1% for the 26-week period ($50.7M vs. $44.8M). Operating income declined 3.7% in the quarter but rose 24.6% year-to-date.
- Expense Increases: Operating, general, and administrative (OG&A) expenses rose 8.3% (13 weeks) and 7.4% (26 weeks). Key drivers included higher employee costs, utility expenses, and outside services. A $2.76 million legal settlement gain related to interchange fees recognized in 2025 was not repeated in 2026.
- Cash Flow: Operating cash flow improved significantly to $95.3 million for the 26-week period (up $33.9M YoY). Investing cash outflows increased to $92.0 million (up $60.5M YoY) due to lower sales of marketable securities compared to the prior year.
Outlook, Risks, and Management Commentary
- Capital Allocation: The company declared a quarterly dividend of $0.34 per share. No share repurchases were made in the quarter; 752,468 shares remain available under the 2004 authorization.
- Internal Controls Remediation: Management concluded that a previously identified material weakness regarding inventory valuation (disclosed in the 2025 10-K) has been remediated as of June 27, 2026. Enhanced controls include improved inventory count protocols and segregation of duties.
- Inflationary Pressure: Management anticipates overall product costs to increase given inflationary trends in the food retail industry, though the impact on retail pricing is difficult to measure precisely due to shifting customer patterns.
- Liquidity: The company maintains a strong liquidity position with $103.5 million in cash and $104.5 million in marketable securities, plus $23.3 million available under its revolving credit facility.
Investor Verification Checklist
- Inventory Controls: Verify the effectiveness of the newly implemented inventory controls following the remediation of the material weakness.
- Comparable Sales Trends: Monitor the divergence between total sales growth (driven by inflation) and comparable store sales excluding fuel, which showed slight contraction in the quarter.
- Expense Management: Track the trajectory of OG&A expenses, specifically labor and utility costs, which are rising faster than sales.
- Capital Expenditures: Review the $88.0 million in capital additions for the first 26 weeks to ensure alignment with store expansion and technology upgrade plans.
- Dividend Sustainability: Assess the coverage of the $0.34 quarterly dividend against free cash flow, noting the significant cash outflow for investing activities.