Weis Markets said same-store sales excluding fuel were up 3.3% in the first quarter, boosted by the early Easter holiday this year, but net income slipped 10.3% compared with year-ago results.
The company cited increased cost pressures during the quarter, the reduction in government benefits, and pressure from an increase in lower-margin pharmacy sales. Net income totaled $23.17 million in the 13-week quarter, which ended March 30, vs. $25.81 million in the year-ago quarter. Net sales for the period were up 2.9%, to $1.18 billion.
Jonathan H. Weis, chairman, president, and CEO, said the results were in line with the company’s expectations.
“We continue to navigate marketplace trends of product cost and third-party services inflation, declining government benefits, and the increasing mix of our pharmacy retail business, which has a lower margin than our grocery business,” he said. “In addition, we increased investments in our associates, technologies, and facilities that improve efficiencies and enhance customer experience.”
In its most recent annual report, the company said pharmacy services increased to 11.2% of total sales in 2023, up from 9.4% in 2022.
The retailer, which operates 196 stores in the Northeast and Mid-Atlantic, said it plans to make record investments in 2024, including six new locations, 11 major remodels, 15 minor remodels, and five fuel centers. The company previously said it plans to complete multiple projects from 2022 and 2023 that were delayed due to labor and supply chain disruptions.
Weis Markets said its capital expenditures as a percent of sales totaled 2.2% in 2023, 2.5% in 2022, and 3.6% in 2021.
The company also held its annual shareholders meeting earlier this month, where it confirmed the election of five directors and rejected two shareholder proposals calling for the company to be more transparent, one concerning animal welfare and the other concerning the risks of climate change.
The Humane Society of the United States had filed the proposal urging the company to file a report disclosing more information about its efforts to support the humane treatment of animals in its supply chain. The Accountability Board, meanwhile, filed a proposal calling for a report with information about how the company was managing the risks of climate change, particularly in its supply chain. The Accountability Board cited disclosures about such risks made by Walmart, Kroger, and Albertsons.
Weis Markets opposed both proposals, saying its current disclosure practices were adequate and that the issues did not warrant the creation of separate reports.