Village Q3 Earnings Fall Y/Y on High Costs, Sales Up Y/Y

Village Super Market, Inc. VLGEA reported its financial results for the third quarter of fiscal 2024. It reported an earnings per share of 60 cents for Class A common stock (down from 75 cents in the prior-year quarter) and 44 cents for Class B common stock (down from 54 cents).

Total sales for the quarter amounted to $546.4 million, a 3.2% increase from $529.3 million in the same period last year.

The overall performance for the fiscal third quarter was marked by modest sales growth, attributed primarily to an increase in same-store sales and digital sales and the opening of a new replacement store. However, the decline in net income and EPS reflects increased operating expenses and other cost pressures.

Village Super Market, Inc. Price, Consensus and EPS Surprise

Village Super Market, Inc. price-consensus-eps-surprise-chart | Village Super Market, Inc. Quote

Key Business Metrics

Same-store sales increased 2.3% year over year, driven by retail price inflation, digital sales growth, higher pharmacy sales and continued growth in recently remodeled stores. Same-store digital sales showed significant growth, increasing 9% year over year, reflecting a successful expansion in online shopping capabilities.

Gross profit, as a percentage of sales, slightly decreased to 28.5% from 28.6% in the prior-year quarter. This decline was due to higher promotional spending and an unfavorable change in product mix, partially offset by higher patronage dividends and rebates, decreased warehouse assessment charges and lower LIFO charges.

Operating and administrative costs escalated 6.9% year over year to $137.7 million. Operating and administrative expenses increased to 25.2% of sales from 24.3% in the prior-year quarter. Adjusted operating and administrative expenses also rose to 25% from 24.6%. This increase was mainly due to higher labor costs, increased external fees related to digital sales, expanded store security, software licensing, and higher facility repair and maintenance costs.

The net income for the fiscal third quarter was $9 million, down from $11 million in the prior-year quarter. Adjusted net income was $9.6 million, reflecting a 6% decrease from $10.2 million in the same period last year.

Other Developments

The grand opening of an 83,000 sq. ft. ShopRite replacement store in Old Bridge, NJ, on Mar 17, 2024, was a significant development. Conversely, the closure of a Gourmet Garage location on Nov 1, 2023, partially offset sales growth.

The previous fiscal year included litigation settlement gains related to the Fairway acquisition, which did not recur in the quarter under review, affecting the comparison of net income year over year.

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