The following discussion and analysis of Weis Markets, Inc. (the “Company”) financial position and results of operations should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included in Item 1 of this Quarterly Report on Form 10-Q, the audited consolidated financial statements of the Company and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021filed with the US Securities and Exchange Commissionas well as the disclaimer titled “Forward-Looking Statements” immediately following this analysis.

Company Summary

Weis Markets is a conventional supermarket chain that operates 197 retail stores with approximately 24,000 associates located in Pennsylvania and six surrounding states: Delaware, Maryland, New Jersey, New York, Virginia and West Virginia. Its products include groceries, dairy products, frozen foods, meat, seafood, fresh produce, flowers, pharmacy services, deli products, prepared foods, bakery, beer and wine, fuel and general merchandise items, such as health and beauty care and household products. some products. The store’s product selection includes national, local and private labels.

The Company advertises its products and promotes its brand through digital and print flyers; radio announcements; sending e-mails; and online through its website, social media and mobile apps. The Company promotes using Daily Lower price; Low price guarantee; Low, low price; 3 day sale; senior and military discounts; and Loyalty programs. The Loyalty Program includes reward points that can be redeemed for discounts on items in-store, at Company service stations or at one of its third-party service station partners.

Using its own strategically located distribution center and its own transportation fleet, Weis Markets self distributes approximately 63% of products, with the remainder supplied by direct-to-store delivery providers. In addition, the Company has three manufacturing plants that process milk, ice cream and fresh meat products. The head offices are located at Sunbury, Pennsylvania where the company was founded in 1912.

On March 11, 2020the World Health Organization declared that the novel coronavirus (COVID-19) had become a pandemic, and the March 13the WE
The president has declared a national emergency over the disease. This has resulted in government-mandated shutdowns, as well as multiple pieces of legislation to provide emergency economic relief to individuals, families and businesses affected by the novel coronavirus pandemic. These events were accretive to our sales and gross profit compared to the periods before the impact of the novel coronavirus pandemic. The Company is not in a position to speculate on how the resulting savings or related unknown future expenses will affect it after the end of government measures in the event of the novel coronavirus pandemic.

The company continues to innovate and stay relevant to industry trends and provide convenience to customers by introducing programs such as “Weis 2 Go Online” ordering with curbside pickup and door-to-door delivery . From June 25, 2022, the company offered Weis 2 Go Online curbside pickup at 188 of its locations as well as home delivery with Shipt at 176 locations. Sales for the first twenty-six weeks of 2022 through Weis 2 Go Online decreased by 28% compared to the same period last year. Compared to the first twenty-six weeks of 2020, sales via Weis 2 Go Online increased by 9.7%. In September 2021the company announced a partnership with DoorDash to offer on-demand grocery delivery, which is currently available at 189 locations.


  Table of Contents

                               WEIS MARKETS, INC.



Two-Year Stacked Comparable Store Sales Analysis

Management provides a two-year cumulative comparable store sales analysis, a non-GAAP measure because management believes this measure is useful to investors and analysts. A two-year cumulative comparable store sales analysis presents a comparison of results and trends over a longer period to demonstrate the effect of the novel coronavirus pandemic on the Company’s operating results. The information presented in the tables below is not intended to be used as an alternative to any other performance measure. It is not recommended that this table be considered a substitute for the Company’s results of operations as presented in accordance with GAAP.

Year-over-year and sequential comparisons are the primary calculations used to analyze operating results, however, due to significant fluctuations caused by the novel coronavirus pandemic, management believes it is necessary to provide a two-year stacked comparable store sales analysis. The following tables present the two-year cumulative comparable store sales, including and excluding motor fuel, for the periods ended June 25, 2022and June 26, 2021as well as the periods ended
June 26, 2021and June 27, 2020, respectively. Same-store sales increased 8.4% on a stand-alone basis year over year and 2.6% on a two-year cumulative basis for the thirteen weeks ended June 25, 2022 following the 24.1% increase for the same period in 2020. Same-store sales increased 8.9% on a year-over-year basis and increased 6.5% year-on-year. a cumulative basis of two years in the twenty-six weeks completed June 25, 2022
after the 18.5% increase for the same period in 2020.

                                                          Percentage Changes
                                                            13 Weeks Ended
                                                    2022 vs. 2021     2021 vs. 2020
Comparable store sales (individual year)                 8.4      %       (5.8)     %
Comparable store sales (two-year stacked)                2.6
Comparable store sales, excluding fuel
(individual year)                                        6.0              (7.7)     %
Comparable store sales, excluding fuel
(two-year stacked)                                      (1.7)     %

                                                          Percentage Changes
                                                            26 Weeks Ended
                                                    2022 vs. 2021     2021 vs. 2020
Comparable store sales (individual year)                 8.9      %       (2.4)     %
Comparable store sales (two-year stacked)                6.5
Comparable store sales, excluding fuel
(individual year)                                        6.8              (3.6)     %
Comparable store sales, excluding fuel
(two-year stacked)                                       3.2      %

When calculating the percentage change in comparable store sales, the Company defines a new store as comparable after it has been in operation for five full quarters. Stores relocated and stores expanded are included in same store sales as these units are located in existing markets and are open during construction. Planned store disposals are excluded from the calculation. The Company includes only retail food stores in the calculation.



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