Shares of Village Super Market, Inc. VLGEA have declined 12.8% since the company reported its earnings for the quarter ended July 26, 2025. This performance starkly contrasts with the S&P 500 index, which fell by only 2.9% over the same period. The broader monthly picture paints a grimmer scenario for Village’s investors, with the stock declining 20% compared to a 1.2% growth for the S&P 500.
Village Super Market reported fiscal fourth-quarter earnings per share (EPS) for Class A common stock of $1.05 compared to $1.04 in the prior year’s fourth quarter. This represents a marginal year-over-year increase of less than 1%.
Quarterly sales rose 3.7% to $599.7 million from $578.2 million, driven by a 1.6% uptick in same-store sales and contributions from the newly opened Watchung, New Jersey replacement store. However, profitability took a hit as gross profit margins narrowed to 28.17% from 29.34% due to price investments, cost inflation, and reduced rebates from Wakefern, Village’s principal supplier.
Net income of $15.5 million, edging up 1% from $15.4 million in the same quarter last year. However, adjusted net income, which excludes special items like pension settlement gains and impairment charges, declined by 8% to $15.6 million from $16.9 million a year ago.
Village Super Market, Inc. Price, Consensus and EPS Surprise
Village Super Market, Inc. price-consensus-eps-surprise-chart | Village Super Market, Inc. Quote
Other Key Business Metrics
Despite margin compression, there were bright spots in operating efficiency. Operating and administrative expenses as a percentage of sales improved significantly, falling to 23.11% from 24.20% a year earlier. Adjusted operating and administrative expenses also decreased to 23.34% of sales, driven by reductions in employee costs, advertising spend, digital transaction fees, and security expenses.
Digital same-store sales grew 11%, reflecting consumer preference for online grocery options. Meanwhile, the company’s total depreciation and amortization expenses rose slightly due to capital investments, and a $1.5 million impairment charge was recognized related to a Gourmet Garage store and assets held for sale, down from $2.1 million in impairments last year.
Interest expenses declined year over year, benefiting from lower average debt balances, while interest income also fell due to reduced returns on variable-rate notes and deposits with Wakefern. The effective tax rate ticked up to 31.4% from 29.4%.
Management Commentary and Strategic Focus
There remains a continued focus on digital transformation and operational efficiency. The 11% rise in digital same-store sales, alongside cost control initiatives, indicates a strategic shift toward adapting to evolving consumer behaviors. The company also appears to be prioritizing store renovations and replacements as a growth driver, as evidenced by recent investments in Watchung and Old Bridge, NJ.
However, the cannibalization effect from new store openings and increased competitive pressure tempered same-store sales growth and profitability. Management also acknowledged the influence of product mix shifts and promotional activity in weighing down margins.
Factors Influencing Headline Numbers
Multiple factors contributed to the year-over-year decline in adjusted net income. Lower departmental gross margins — resulting from pricing strategies and inflationary pressures — reduced overall profitability. In addition, Wakefern-related rebates and dividends were lower in the quarter, directly impacting gross profit.
On the expense side, Village made meaningful strides in reducing operating overhead, mitigating some of the pressure on margins. Nonetheless, the combination of higher impairment charges, decreased interest income, and an elevated tax rate diluted the net impact of topline growth.
Fiscal 2025 Update
For fiscal 2025, net income rose 12% year-over-year to $56.4 million, while adjusted net income increased 8% to $56.9 million. Total sales grew 3.8% to $2.3 billion, driven by same-store sales growth of 2.1% and benefits from new and renovated store openings. Full-year EPS for Class A stock climbed to $3.81 from $3.40.
Other Developments
During the quarter, Village opened a 72,000 square-foot ShopRite replacement store in Watchung, New Jersey, which contributed to the sales increase. This store forms part of a broader strategy to modernize and relocate underperforming locations.
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Village Super Market, Inc. (VLGEA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).