Shares of Village Super Market, Inc. VLGEA have declined 1.4% since the company reported its earnings for the quarter ended Oct. 26, 2024. This compares to the S&P 500 index’s 0.4% growth over the same time frame. Over the past month, the stock has declined 5.6% against the S&P 500’s 1.9% growth, reflecting underperformance relative to the broader market.
Key Financial Highlights
For the first quarter of fiscal 2025, Village Super Market reported earnings per share of 86 cents for Class A common stock, up from 78 cents in the previous year.
Sales of $557.7 million reflected a 4% increase compared to $536.4 million in the prior-year period. The increase was driven by a 2.4% rise in same-store sales and contributions from the newly opened Old Bridge, NJ store, partially offset by the closure of a Gourmet Garage location in November 2023. Same-store digital sales advanced 8%, bolstered by higher pharmacy sales and growth in remodeled locations.
Village Super Market, Inc. Price, Consensus and EPS Surprise
Village Super Market, Inc. price-consensus-eps-surprise-chart | Village Super Market, Inc. Quote
Operational Insights
Gross Margin and Expenses
Gross profit, as a percentage of sales, improved to 29% from 28.5%, benefiting from increased patronage dividends and reduced warehouse assessment charges. However, these gains were partially offset by an unfavorable product mix and higher promotional spending.
Operating and administrative expenses increased as a percentage of sales, rising to 24.7% from 24.3% in the prior-year quarter. Key contributors included rising employee costs from minimum wage increases and higher digital sales-related fees. On the positive side, the company managed cost efficiencies in fixed occupancy and supply spending.
Interest Expenses
Interest expense declined, reflecting lower average outstanding debt, while interest income also decreased due to reduced investments in demand deposits.
Net Income
Net income for the quarter rose to $12.8 million, an 11% increase from $11.6 million a year ago.
Management Commentary
Management highlighted the positive impact of store remodels and digital sales growth on same-store performance. The opening of the Old Bridge location was noted as a significant driver of top-line expansion, partially offset by the closure of a Gourmet Garage store. Management also cited rising labor and utility costs as ongoing challenges but emphasized operational efficiencies as mitigating factors.
Factors Influencing Performance
Sales growth was supported by strategic investments in digital and pharmacy offerings. However, inflationary pressures on wages and utilities weighed on profitability. Promotional spending and unfavorable changes in product mix also tempered margin gains. These dynamics underscore the delicate balance between driving revenues and managing cost inflation.
Other Developments
During the quarter, Village Super Market finalized the closure of one Gourmet Garage location in New York City, a move that affected sales but aligns with its strategic store optimization efforts.
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