Weis Markets reports comp-store sales and earnings increase
- Weis Markets reported a 2.7% increase in comp-store sales along with a 21% rise in net income to $18.5 million, according to a company release. Earnings per share rose to $0.69 from $0.57 in last year’s second quarter.
- Total sales during the most recent period increased to $876.6 million compared to $730.4 million a year ago, a 20% increase.
- "During this period our sales and net income benefited from the strong performance of our pharmacy and deli-food service departments, sustained and varied promotions throughout our seven state market area and increased store level efficiencies and expense controls," Jonathan Weis, Weis Markets’ chairman and CEO, said in a statement.
Weis’s sales and earnings jump is attributable to its acquisition of 38 Food Lion stores and five Mars Super Markets locations in July 2016. Those transactions boosted the Pennsylvania-based retailer’s store footprint by more than 20% and doubled its count in Maryland, a state Weis has cited as key to its future growth.
Still, the increase comes as an improvement over last quarter, when Weis saw earnings tumble 41.2%. At the time, CEO Jonathan Weis blamed the results on deflation, shifting Easter and New Year’s holidays and a mild winter that erased many stock-up trips. Weis’s same-store sales increase marks the thirteenth consecutive quarter increase in the all-important metric.
Weis will hope for a continued strong performance from its acquired stores as it updates its existing locations. This year, the company is remodeling 14 stores as part of $90 million in planned investments that also includes building one new store and two fuel centers, implementing chain-wide efficiency measures and an expansion of its Pennsylvania distribution center. The expenditures are significantly lower than the $140 million Weis spent during what was a banner year in 2016, but are more in line with historical spending for the company.
In the earnings statement, the company pointed to cost-cutting measures and strong sales in pharmacy and deli prepared foods as keys to company growth. This shows its deftness at achieving efficiency and capitalizing on high-growth categories. But Weis is still in a precarious state as a conventional retailer operating at a time when many customers are seeking out specialty stores, discounters and other alternative formats. As CEO Weis recently told PennLive.com, “We are sort of a middle-of-the-road supermarket."
To address this, Weis earlier this year opened a 65,000 square foot upscale concept store in Enola, Pennsylvania that features expanded organic and fresh offerings and services such as a juice bar, yogurt bar and an ice cream parlor. Similar to other experimental stores, like Hy-Vee’s Fourth + Court, the format is a new look for the company that should function as a test lab for specialty offerings and services. With industry competition increasing, Weis has to make its new store count. With the right research and data approach, it could become a change agent for the company.
- PR Newswire Weis Markets Reports 2nd Quarter Results
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