Business Context and Reporting Period
Company: Weis Markets, Inc. (WMK)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 27, 2025 (52 weeks)
Business Overview: Weis Markets operates 202 conventional retail food stores in Pennsylvania and six surrounding states. The company sells groceries, fresh foods, pharmacy services, fuel, and general merchandise. It operates as a single reportable segment.
Key Financial Metrics (Fiscal 2025)
| Metric | 2025 (Restated) | 2024 (Restated) | 2023 (Restated) |
|---|---|---|---|
| Net Sales | $4,939.4 million | $4,773.9 million | $4,697.0 million |
| Total Revenue | $4,957.7 million | $4,791.7 million | $4,714.6 million |
| Gross Profit | $1,239.9 million | $1,198.8 million | $1,175.5 million |
| Gross Margin | 25.1% | 25.1% | 25.0% |
| Operating Income | $113.7 million | $126.4 million | $133.1 million |
| Operating Margin | 2.3% | 2.6% | 2.8% |
| Net Income | $93.7 million | $106.0 million | $100.9 million |
| Diluted EPS | $3.65 | $3.94 | $3.75 |
| Operating Cash Flow | $207.2 million | $187.5 million | $201.6 million |
| Cash & Equivalents (Year End) | $117.1 million | $190.3 million | $184.2 million |
| Marketable Securities | $97.1 million | $192.0 million | $152.5 million |
| Debt | None (Revolving Credit Facility: $0 outstanding) | None | None |
Note: All financial data for 2024 and 2023 presented above reflects restated figures due to inventory errors described below.
Material Changes and Restatement
Significant Restatement: The Company has restated its consolidated financial statements for the years ended December 28, 2024, and December 30, 2023, as well as interim periods through September 27, 2025.
- Cause: Errors related to the overstatement of inventory and understatement of cost of goods sold at a single meat product manufacturing plant.
- Origin: Misconduct by a single former non-executive employee.
- Impact: The restatement reduced previously reported net income for 2024 by $3.9 million and for 2023 by $3.0 million. Retained earnings as of December 31, 2022, were restated downward by $5.5 million (net of tax).
- Internal Controls: Management identified a material weakness in internal control over financial reporting as of December 27, 2025, related to inventory controls. The independent auditor issued an adverse opinion on internal controls.
Operational Changes:
- Store Count: Ended 2025 with 202 stores (net increase of 4 from 2024). Opened 4 new stores and acquired 1 store (Saylor's Market) in 2025.
- Comparable Sales: Comparable store sales increased 2.0% in 2025 (excluding fuel: 2.1%).
- Share Repurchase: Purchased 2,153,846 shares from the Weis family trusts for $140.0 million in June 2025.
Guidance, Outlook, and Risks
Management Commentary:
- Strategy: Focus on sales-driven culture, human capital development, and consumer relevance. Continued investment in new stores, remodels, and technology.
- Dividends: Paid $1.36 per share in 2025. The Board expects to continue paying regular quarterly dividends, subject to financial conditions.
- Liquidity: Maintains a $100 million revolving credit facility (matures 2027) with $19.9 million available as of year-end. No long-term debt outstanding.
Risks and Contingencies:
- Restatement Risks: Potential for litigation, investigations, unanticipated legal/accounting fees, and loss of investor confidence.
- Internal Control Weakness: Risk of future misstatements if remediation of inventory controls is not successful.
- Competition: Intense price competition from national, regional, and online retailers.
- Supply Chain: Sensitivity to oil prices, labor costs, and potential disruptions from extreme weather or pandemics.
- Legal: Ongoing litigation with former COO Kurt Schertle regarding benefit plan amounts (Company disputes the claim).
Investor Verification Checklist
- Restatement Details: Review Note 12 for the specific dollar adjustments to inventory, cost of sales, and net income for all impacted periods.
- Internal Control Remediation: Verify the specific steps management is taking to address the material weakness in inventory controls (Item 9a).
- Related Party Transaction: Review the $140 million share purchase from the Weis family trusts (Note 13) and the fairness opinion provided.
- Inventory Valuation: Assess the Company's reliance on LIFO for center store/pharmacy inventory and the associated LIFO reserve adjustments.
- Liquidity Position: Confirm the status of the revolving credit facility and the composition of the marketable securities portfolio ($97.1 million).