Weis Markets Profit Falls as Expenses Pressure Margins
Second-quarter revenue rose 4.6% to $1.275 billion.
Weis Markets (WMK), the supermarket operator, reported lower second-quarter earnings as operating expenses grew faster than gross profit, compressing margins despite higher revenue.
Revenue growth held at the first quarter’s 4.6% pace, after slowing from 5.0% in the fourth quarter of 2024 and accelerating from 2.8% a year earlier. Revenue increased 1.5% sequentially from $1.256 billion but remained 1.6% below the fourth quarter’s $1.296 billion.
Net income fell 9.6% to $22.86 million, reversing the first quarter’s 42.5% increase and declining 17.9% sequentially. Earnings slipped to $0.92 a share from $0.96 a year earlier and $1.13 in the first quarter, even as weighted-average shares declined to 24.74 million from 26.35 million.
Comparable-store sales rose 2.3%, strengthening from 2.1% in the first quarter, while comparable sales excluding fuel declined 0.4% after rising 1.2%. On a two-year stacked basis, comparable growth accelerated to 4.1% from 3.0%, though the excluding-fuel measure eased to 1.9% from 2.2%.
Gross profit increased 7.1% to $328.40 million, while operating, general and administrative expenses climbed 8.3% to $299.29 million. Operating income fell 3.7% to $29.11 million, leaving the operating margin at about 2.3%, compared with roughly 2.5% a year earlier and 2.8% in the first quarter.
Pharmacy pricing pressure tied to Medicare maximum-fair-price provisions increased to approximately $10.71 million from $7.48 million in the first quarter, bringing the first-half impact to $18.19 million.
For the first half, revenue rose 4.6% to $2.531 billion and net income increased 13.1% to $50.71 million. The second-quarter profit decline sharply weakened the earnings trajectory after the first quarter’s 42.5% increase.