Village Super Market, Inc. Reports Results for the Fourth Quarter Ended July 28, 2018
October 08 2018 - 8:00AM
Village Super Market, Inc. (NSD-VLGEA) today reported its results
of operations for the fourth quarter ended July 28, 2018.
Net income was $6,011,000 in the fourth quarter
of fiscal 2018 compared to $6,805,000 in the fourth quarter of
fiscal 2017. The fourth quarter of
fiscal 2018 includes a $822,000 (net of tax)
non-recurring credit accrued related to multi-employer pension
benefits, $671,000 (net of tax) in non-recurring assessments from
Wakefern and $551,000 (net of tax) in pre-opening costs related to
the Bronx, New York City store. Excluding these items, net
income decreased 6% in the fourth quarter of
fiscal 2018 compared to the prior year primarily due to
higher operating and administrative expenses partially offset by
the favorable impact of a reduction in the fiscal 2018 effective
tax rate to 33.7% as a result of the Tax Cuts and Jobs
Act (the "Tax Act").
Sales were $413,551,000 in the fourth quarter of
fiscal 2018 compared to $410,683,000 in the fourth quarter of
fiscal 2017. Sales increased due to the opening of the Bronx,
New York City store on June 28, 2018 partially offset by a decrease
in same store sales of 0.3%. Same store sales decreased due
primarily to two competitor store openings. 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 increased
to 27.56% in the fourth quarter of fiscal 2018 compared to 27.39%
in the fourth quarter of fiscal 2017 due primarily to increased
departmental gross margin percentages (.11%) and more favorable
product mix (.03%).
Operating and administrative expense as a
percentage of sales increased to 23.80% in the fourth quarter of
fiscal 2018 compared to 22.99% in the fourth quarter of fiscal
2017. Operating and administrative expense as a percentage of
sales increased due primarily to payroll investments in
service departments and training (.09%), internal payroll (.06%)
and non-recurring external consulting fees (.18%) related to the
launch of operational proficiency initiatives, pre-opening costs
for the Bronx, New York store (.20%), non-recurring assessments
from Wakefern (.23%) and increased worker compensation claim costs
(.23%). These increases were partially offset by a
non-recurring credit accrued related to multi-employer pension
benefits (.30%).
Net income was $25,080,000 in fiscal 2018
compared to $22,921,000 in fiscal 2017.
Fiscal 2018 includes a $3,300,000 reduction in deferred
tax expense as a result of the Tax Act, an $822,000 (net of tax)
non-recurring credit accrued related to multi-employer pension
benefits, $877,000 (net of tax) in non-recurring assessments from
Wakefern and $695,000 (net of tax) in pre-opening costs related to
the Bronx, New York City store. Excluding these items, net
income decreased 2% in fiscal 2018 compared to the prior
year primarily due to higher operating and administrative expenses
partially offset by the favorable impact of a reduction in the
fiscal 2018 effective tax rate to 33.7% as a result of
the Tax Act.
Sales were $1,612,015,000 in fiscal 2018
compared to $1,604,574,000 in fiscal 2017. Sales increased
due to the opening of the Bronx, New York City store on June 28,
2018 and a same store sales increase of 0.2%. Same store sales
increased due primarily to continued growth in recently remodeled
and expanded stores, inflation and increased promotional
spending. These increases were offset primarily by two
competitor store openings.
Gross profit as a percentage of sales of 27.23%
in fiscal 2018 increased .01% compared to fiscal 2017.
Increased departmental gross margin percentages (.07%) and more
favorable product mix (.09%) were offset by decreased patronage
dividends (.04%) and higher promotional spending (.10%).
Operating and administrative expense as a
percentage of sales increased to 23.61% in fiscal 2018 compared to
23.15% in fiscal 2017. Operating and administrative expense
as a percentage of sales increased due primarily to
payroll investments in service departments and training
(.19%), internal payroll (.04%) and non-recurring external
consulting fees (.09%) related to the launch of operational
proficiency initiatives, pre-opening costs for the Bronx, New York
store (.06%), non-recurring assessments from Wakefern (.08%) and
increased occupancy costs including snow removal
(.05%). These increases were partially offset by a
non-recurring credit accrued related to multi-employer pension
benefits (.08%).
Village Super Market operates a chain of 30
supermarkets under the ShopRite name in New Jersey, Maryland,
northeastern Pennsylvania and 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:
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; 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 |
|
13 Weeks Ended |
|
52 Weeks Ended |
|
52 Weeks Ended |
|
July 28, 2018 |
|
July 29, 2017 |
|
July 28, 2018 |
|
July 29, 2017 |
|
|
|
|
|
|
|
|
Sales |
$ |
413,551 |
|
|
$ |
410,683 |
|
|
$ |
1,612,015 |
|
|
$ |
1,604,574 |
|
|
|
|
|
|
|
|
|
Cost of sales |
299,590 |
|
|
298,194 |
|
|
1,173,013 |
|
|
1,167,863 |
|
|
|
|
|
|
|
|
|
Gross profit |
113,961 |
|
|
112,489 |
|
|
439,002 |
|
|
436,711 |
|
|
|
|
|
|
|
|
|
Operating and administrative expense |
98,412 |
|
|
94,435 |
|
|
380,550 |
|
|
371,495 |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
6,295 |
|
|
6,124 |
|
|
24,999 |
|
|
24,482 |
|
|
|
|
|
|
|
|
|
Operating income |
9,254 |
|
|
11,930 |
|
|
33,453 |
|
|
40,734 |
|
|
|
|
|
|
|
|
|
Interest expense |
(1,119 |
) |
|
(1,109 |
) |
|
(4,460 |
) |
|
(4,452 |
) |
|
|
|
|
|
|
|
|
Interest income |
1,069 |
|
|
778 |
|
|
3,845 |
|
|
2,841 |
|
|
|
|
|
|
|
|
|
Income before income taxes |
9,204 |
|
|
11,599 |
|
|
32,838 |
|
|
39,123 |
|
|
|
|
|
|
|
|
|
Income taxes |
3,193 |
|
|
4,794 |
|
|
7,758 |
|
|
16,202 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
6,011 |
|
|
$ |
6,805 |
|
|
$ |
25,080 |
|
|
$ |
22,921 |
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
Class A common stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.47 |
|
|
$ |
0.53 |
|
|
$ |
1.95 |
|
|
$ |
1.80 |
|
Diluted |
$ |
0.42 |
|
|
$ |
0.47 |
|
|
$ |
1.74 |
|
|
$ |
1.60 |
|
|
|
|
|
|
|
|
|
Class B common stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.30 |
|
|
$ |
0.34 |
|
|
$ |
1.27 |
|
|
$ |
1.16 |
|
Diluted |
$ |
0.30 |
|
|
$ |
0.34 |
|
|
$ |
1.27 |
|
|
$ |
1.16 |
|
|
|
|
|
|
|
|
|
Gross profit as a % of sales |
27.56 |
% |
|
27.39 |
% |
|
27.23 |
% |
|
27.22 |
% |
Operating and administrative expense as a % of sales |
23.80 |
% |
|
22.99 |
% |
|
23.61 |
% |
|
23.15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
John Van Orden, CFO |
|
(973) 467-2200 |
|
john.vanorden@wakefern.com |
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