Weis’ Q2 Comps, Net Income Up
Weis Markets Inc.’s 2016 second-quarter sales grew 1.7 percent to $730.4 million, while its comparable-store sales rose 1.8 percent from the year-ago period. The Sunbury, Pa.-based grocer noted that sales increased despite the negative impact of the Easter holiday: In 2016, Easter was on March 27, which occurred during the first quarter, versus 2015, when it was on April 5, which fell in the second quarter. The 2016 sales impact between quarters was about $7.1 million, resulting in a 1.0 percent dip in second-quarter comps.
For the 13-week period ended June 25, the company’s net income fell 8.3 percent to $15.3 million, while earnings per share came to 57 cents per share, compared with 62 cents per share for the same period in 2015. According to Weis, net income for the quarter was adversely affected by the rise in base wages in the third quarter of 2015 and the Easter calendar shift noted above.
“Wage increase and Easter calendar shift aside, we continue to post solid results, which we attribute to our long-term price investments, increasingly efficient logistics and improved customer experience,” said Weis Chairman, President and CEO Jonathan H. Weis. “During the period, we saw a strong increase in customer traffic, which helped generate significant sales increases in produce, deli/food service and pharmacy.”
As a percentage of sales, 2016 second-quarter store labor costs edged up 0.3 percent and 0.2 percent year-to-date, versus the year-ago periods, which the company attributed to the base wage increase. Weis added that the increase in its base hourly rate to $9 per hour and related wage compression increased costs by an estimated $2.8 million in the second quarter and $5.5 million year to date, with higher employee-related expenses partly offset by savings from a store labor efficiency initiative.
For the 26-week period ending June 25, the grocer’s sales were up 2.6 percent to $1.5 billion and comps grew 2.7 percent from the same period in 2015. Year-to-date operating income rose 21.8 percent to $55.3 million, while net income increased 18.1 percent to $35.4 million. Earnings per share rose 17.9 percent to $1.32 per share.
As PG previously reported, Weis Markets plans to purchase 38 Food Lion stores in Maryland, Virginia and Delaware, and five Mars Super Markets in Baltimore, with conversions of these stores to the Weis banner set to begin in the third quarter of 2016.
Weis operates 162 stores in Pennsylvania, Maryland, New Jersey, New York and West Virginia.