Back to top

Image: Bigstock

Village's Q4 Earnings Rise Y/Y, Sales Improve on Digital Growth

Read MoreHide Full Article

For the fiscal fourth quarter ended July 27, 2024, Village Super Market, Inc. (VLGEA - Free Report) reported earnings per share (EPS) of $1.04 for Class A common stock, up from the prior-year quarter's figure of $1.03. For Class B common stock, the EPS was 75 cents, up slightly from 74 cents in the previous year. 

Total sales reached $578.2 million, marking a 4.4% increase from the $553.8 million recorded in the same period last year, driven by a 2.7% rise in same-store sales.

Village's performance in the fiscal fourth quarter reflected steady growth, with a focus on digital sales and pharmacy segments. The 4.4% increase in sales was supported by strong digital sales growth, which climbed 12%, and a robust performance in recently remodeled stores. Same-store sales growth of 2.7% was primarily due to retail price inflation. 

The impact of the lower LIFO charges and warehouse assessment fees further bolstered profitability. However, increasing labor costs, particularly related to union health and welfare plans and minimum wage hikes, weighed on margins.

Business Metrics

Gross Profit

Gross profit, as a percentage of sales, came in at 29.3% in the fiscal fourth quarter, up from 29.1% in the same period last year. The improvement was mainly attributed to a reduction in warehouse assessment charges from Wakefern (0.26%) and lower LIFO charges (0.25%). Departmental gross margin percentages also improved 0.1%. However, this was slightly offset by an unfavorable change in product mix and higher promotional spending, which collectively shaved 0.3% off gross profit growth.

Operating and Administrative Expenses

Operating and administrative expenses accounted for 24.2% of sales, a rise from 23.9% in the prior-year quarter. The increase was primarily driven by labor costs and fringe benefits, contributing 0.3% to the rise, alongside 0.1% from external fees related to digital sales growth and 0.1% from higher utility costs. Lower legal and consulting fees and reduced supply spending helped to mitigate these increases slightly, but rising wages and union health benefits posed a long-term challenge.

Depreciation and Amortization

Depreciation and amortization costs remained at $8.3 million, marginally down from $8.4 million in the prior-year quarter. This reflects the timing of capital expenditures, with no significant new spending in the quarter.

Interest Expenses and Income

Interest expense decreased modestly to $1.01 million from $1.08 million, reflecting lower average outstanding debt balances. Interest income was largely flat, remaining at $3.6 million.

Net Income

Village's net income for the fiscal fourth quarter was $15.4 million, an increase from $15.3 million in the prior-year quarter. Adjusted net income increased by 10% to $16.9 million, up from $15.3 million. 

Fiscal 2024 Update

Village’s sales totaled $2.24 billion, a 3.2% increase from the $2.17 billion reported in fiscal 2023. For fiscal 2024, it reported EPS of $3.40 for Class A common stock, up from the prior year's figure of $3.38. For Class B common stock, the EPS was $2.46, slightly higher than the $2.45 reported in fiscal 2023.

Gross profit as a percentage of sales improved to 28.7% in fiscal 2024 compared with 28.5% in the previous year. Operating and administrative expenses rose to 24.3% of sales from 23.9% in fiscal 2023. Depreciation and amortization costs were slightly lower.

The company’s net income for the fiscal year reached $50.5 million, a marginal increase from the $49.7 million earned in fiscal 2023, while adjusted net income grew 7% to $52.6 million compared with $48.9 million in the prior year.

Other Developments

During the quarter, Village closed its automated micro-fulfillment center, which resulted in a non-cash impairment charge of $2.1 million. The closure reflects a strategic decision to scale back its automation efforts, perhaps in favor of other more immediate growth opportunities like digital sales and store expansions. The company also saw the positive impact of the newly opened Old Bridge replacement store but faced some drag on results from the closure of a Gourmet Garage location in November 2023.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Village Super Market, Inc. (VLGEA) - free report >>

Published in