Village Super Market Sales Up, Net Income Dips Amid Wakefern Legal Battle

TL;DR

**VLGEA's sales are up, but net income is down, and their legal fight with Wakefern is a major red flag for future growth.**

AI Summary

VILLAGE SUPER MARKET INC (VLGEA) reported a slight decline in net income for the 13 weeks ended October 25, 2025, reaching $12.002 million, down from $12.803 million in the prior year, a decrease of 6.26%. Sales, however, saw a positive increase of 4.46%, rising to $582.593 million from $557.697 million. Gross profit also improved to $164.951 million from $161.878 million. Operating income decreased to $15.101 million from $15.976 million, primarily due to higher operating and administrative expenses, which rose to $141.445 million from $137.519 million. The company's cash and cash equivalents increased to $117.689 million from $110.699 million at July 26, 2025. A significant development is the ongoing legal dispute with Wakefern Food Corp. regarding Wakefern's acquisition of Morton Williams Supermarkets, which VLGEA believes violates Wakefern's governing documents. This dispute also involves trademark agreements and has delayed new store approvals, though it has not yet significantly impacted operations or financial performance. The company maintains compliance with all credit facility covenants, with $65.979 million available under its revolving line of credit.

Why It Matters

This 10-Q reveals VLGEA's resilience in sales growth despite a dip in net income, which could signal margin pressures or increased operational costs. The ongoing legal dispute with Wakefern, its principal supplier, introduces significant competitive and operational uncertainty. For investors, this conflict could impact future growth and profitability, especially concerning new store development. Employees and customers might see effects on store expansion and product availability if the dispute escalates. The broader market will watch how this intra-cooperative conflict plays out, potentially setting precedents for other member-owned wholesale models.

Risk Assessment

Risk Level: high — The company faces high risk due to the ongoing legal dispute with Wakefern Food Corp., its principal supplier, concerning the acquisition of Morton Williams Supermarkets. This dispute has already 'delayed and may further delay the approval of new stores' and Wakefern has 'indicated that it could take additional actions against the Company if the matter in controversy is not resolved,' posing a significant threat to VLGEA's operational expansion and supply chain stability.

Analyst Insight

Investors should closely monitor developments in the Wakefern legal dispute, as its outcome could significantly impact VLGEA's long-term growth prospects and operational stability. Consider the potential for increased legal costs and disruptions to new store development. Await further clarity on the dispute's resolution before making significant investment decisions.

Financial Highlights

debt To Equity

0.60

revenue

$582,593,000

operating Margin

2.59%

total Assets

$1,004,280,000

total Debt

$299,757,000

net Income

$12,002,000

eps

$0.81

gross Margin

28.31%

cash Position

$117,689,000

revenue Growth

+4.46%

Revenue Breakdown

Key Numbers

• $582.593M — Total Sales (Increased by 4.46% from $557.697M year-over-year.)
• $12.002M — Net Income (Decreased by 6.26% from $12.803M year-over-year.)
• $15.101M — Operating Income (Decreased from $15.976M year-over-year.)
• $141.445M — Operating and Administrative Expense (Increased from $137.519M year-over-year.)
• $117.689M — Cash and Cash Equivalents (Increased from $110.699M at July 26, 2025.)
• $65.979M — Available Credit (Remaining under the unsecured revolving line of credit as of October 25, 2025.)
• 58.8% — Center Store Sales Percentage (Represents the largest sales category for the 13 weeks ended October 25, 2025.)
• 36.2% — Fresh Sales Percentage (Second largest sales category for the 13 weeks ended October 25, 2025.)

Key Players & Entities

• VILLAGE SUPER MARKET INC (company) — registrant
• Wakefern Food Corp. (company) — principal supplier and legal adversary
• Morton Williams Supermarkets (company) — acquisition target in legal dispute
• Wells Fargo National Bank, National Association (company) — credit facility provider
• $12.002 million (dollar_amount) — net income for 13 weeks ended Oct 25, 2025
• $12.803 million (dollar_amount) — net income for 13 weeks ended Oct 26, 2024
• $582.593 million (dollar_amount) — sales for 13 weeks ended Oct 25, 2025
• $557.697 million (dollar_amount) — sales for 13 weeks ended Oct 26, 2024
• $65.979 million (dollar_amount) — available under unsecured revolving line of credit
• Superior Court of New Jersey, Chancery Division, Middlesex County (regulator) — venue for legal dispute

FAQ

Risk Factors

• Wakefern Legal Dispute [medium — legal]: VLGEA is involved in a legal dispute with Wakefern Food Corp. concerning Wakefern's acquisition of Morton Williams Supermarkets, which VLGEA believes violates Wakefern's governing documents. This dispute also involves trademark agreements and has delayed new store approvals.
• Operating and Administrative Expense Increase [medium — operational]: Operating and administrative expenses increased to $141.445 million from $137.519 million year-over-year, contributing to a decrease in operating income.
• Competition and Market Share [medium — market]: As a supermarket operator, VLGEA faces intense competition. While sales increased by 4.46% to $582.593 million, net income decreased by 6.26%, suggesting potential margin pressures or increased costs in a competitive environment.
• Inventory Valuation Method [low — financial]: Approximately 64% of merchandise inventories are valued by the LIFO method. A shift to FIFO for the entire inventory would result in a higher reported inventory value, indicating potential impacts on cost of goods sold and profitability depending on price trends.

Industry Context

Village Super Market Inc. operates in the highly competitive grocery retail sector. The industry is characterized by thin profit margins, significant capital investment in physical stores, and increasing pressure from online retailers and changing consumer preferences towards fresh and prepared foods. Key trends include a focus on value, convenience, and private label offerings, alongside investments in technology for e-commerce and supply chain efficiency.

Regulatory Implications

VLGEA's operations are subject to standard retail regulations concerning food safety, labor, and environmental standards. The ongoing legal dispute with Wakefern Food Corp. introduces a specific regulatory and legal risk that could impact future store expansion and operational agreements if not resolved favorably.

What Investors Should Do

1. Monitor the Wakefern legal dispute closely.
2. Analyze the drivers of increased operating and administrative expenses.
3. Evaluate the impact of inventory valuation methods on profitability.
4. Assess the sustainability of sales growth versus net income decline.

Key Dates

• 2025-10-25: End of 13-week period — Reporting period for the current 10-Q, showing a decrease in net income despite sales growth.
• 2025-07-26: End of prior fiscal quarter — Balance sheet comparison point for cash and cash equivalents and other assets/liabilities.
• 2024-10-26: End of prior year 13-week period — Comparison period for the Consolidated Statements of Operations, showing year-over-year performance changes.

Glossary

LIFO

Last-In, First-Out. An inventory valuation method where the last goods purchased are assumed to be the first ones sold. (Affects the reported cost of goods sold and inventory value, especially in periods of changing prices. VLGEA uses LIFO for 64% of its inventory.)

FIFO

First-In, First-Out. An inventory valuation method where the first goods purchased are assumed to be the first ones sold. (The alternative to LIFO. If VLGEA used FIFO for all inventory, its reported inventory would be $22,624,000 higher.)

Operating lease assets

Assets recognized under accounting standards for leases where the company has the right to use an asset for a period of time, but does not own it. (Represents a significant portion of VLGEA's assets ($245,952,000) and liabilities ($235,292,000 long-term), reflecting its store footprint.)

Notes receivable from Wakefern

Money owed to VLGEA by Wakefern Food Corp., likely related to intercompany transactions or agreements. (A substantial asset for VLGEA ($113,315,000), highlighting the close financial relationship and potential dependencies.)

Two-class method

An accounting method for calculating earnings per share (EPS) when a company has multiple classes of common stock with different dividend rights. (Used by VLGEA to report EPS separately for Class A and Class B common stock, reflecting their distinct dividend entitlements.)

Year-Over-Year Comparison

Compared to the prior year's 13-week period, Village Super Market Inc. (VLGEA) demonstrated solid revenue growth of 4.46%, reaching $582.593 million. However, this top-line improvement was offset by a 6.26% decrease in net income to $12.002 million, primarily driven by a rise in operating and administrative expenses. While cash and cash equivalents saw a healthy increase to $117.689 million, the company is navigating a significant legal dispute with Wakefern Food Corp., which, although not currently impacting operations, represents a notable new risk factor.

Filing Documents

• vlgea-20251025.htm (10-Q) — 648KB
• vlgea20251025ex-311.htm (EX-31.1) — 14KB
• vlgea20251025ex-312.htm (EX-31.2) — 15KB
• vlgea20251025ex-321.htm (EX-32.1) — 5KB
• vlgea20251025ex-322.htm (EX-32.2) — 6KB
• vlgea20251025-exhibit991.htm (EX-99.1) — 73KB
• 0000103595-25-000019.txt ( ) — 3978KB
• vlgea-20251025.xsd (EX-101.SCH) — 21KB
• vlgea-20251025_cal.xml (EX-101.CAL) — 53KB
• vlgea-20251025_def.xml (EX-101.DEF) — 161KB
• vlgea-20251025_lab.xml (EX-101.LAB) — 401KB
• vlgea-20251025_pre.xml (EX-101.PRE) — 272KB
• vlgea-20251025_htm.xml (XML) — 348KB

PAGE NO

PART I PAGE NO. FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets 3 Consolidated Statements of Operations 4 Consolidated Statements of Comprehensive Income 5 Consolidated Statements of Shareholders' Equity 6 Consolidated Statements of Cash Flows 7

Notes to Consolidated Financial Statements 8

Notes to Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations 14

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14

Quantitative & Qualitative Disclosures about Market Risk 21

Item 3. Quantitative & Qualitative Disclosures about Market Risk 21

Controls and Procedures 21

Item 4. Controls and Procedures 21 PART II OTHER INFORMATION

Legal Proceedings 23

Item 1. Legal Proceedings 23

Risk Factors 23

Item 1A. Risk Factors 23

Other Information 24

Item 5. Other Information 24

Exhibits 25

Item 6. Exhibits 25 Signatures 26 2

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) October 25, 2025 July 26, 2025 ASSETS Current assets Cash and cash equivalents $ 117,689 $ 110,699 Merchandise inventories 54,146 51,424 Patronage dividend receivable 19,604 14,144 Income taxes receivable 2,348 5,265 Other current assets 19,122 19,223 Assets held for sale — 4,354 Total current assets 212,909 205,109 Property, equipment and fixtures, net 320,549 322,889 Operating lease assets 245,952 252,291 Notes receivable from Wakefern 113,315 111,205 Investment in Wakefern 32,207 32,207 Investments in Real Estate Partnerships 21,721 21,701 Goodwill 24,190 24,190 Other assets 33,437 34,119 Total assets $ 1,004,280 $ 1,003,711 LIABILITIES Current liabilities Operating lease obligations $ 21,559 $ 21,585 Finance lease obligations 1,064 1,037 Notes payable to Wakefern 551 541 Current portion of debt 9,370 9,370 Accounts payable to Wakefern 81,863 83,258 Accounts payable and accrued expenses 34,139 33,177 Accrued wages and benefits 30,268 32,004 Income taxes payable 2,575 297 Total current liabilities 181,389 181,269 Long-term debt Operating lease obligations 235,292 241,216 Finance lease obligations 17,908 18,243 Notes payable to Wakefern 267 405 Long-term debt 46,290 48,621 Total long-term debt 299,757 308,485 Pension liabilities 3,099 3,284 Other liabilities 18,944 18,709 Commitments and contingencies (Note 5) SHAREHOLDERS' EQUITY Preferred stock, no par value: Authorized 10,000 shares, none issued — — Class A common stock, no par value: Authorized 20,000 shares; issued 11,626 shares at October 25, 2025 and 11,627 shares at July 26, 2025 84,529 83,616 Class B common stock, no par value: Authorized 20,000 shares; issued and outstanding 4,125 shares at October 25, 2025 and July 26, 2025 670 670 Retained earnings 432,366 423,690 Accumulated other comprehensive income 3,991 4,453 Less tre

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) (Unaudited) 1. BASIS OF PRESENTATION and ACCOUNTING POLICIES In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the consolidated financial position as of October 25, 2025 and the consolidated statements of operations, comprehensive income and cash flows for the 13 weeks ended October 25, 2025 and October 26, 2024 of Village Super Market, Inc. ("Village" or the "Company"). The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the July 26, 2025 Village Super Market, Inc. Annual Report on Form 10-K, which should be read in conjunction with these financial statements. The results of operations for the period ended October 25, 2025 are not necessarily indicative of the results to be expected for the full year. Disaggregated Revenues The following table presents the Company's sales by product categories during each of the periods indicated: 13 Weeks Ended October 25, 2025 October 26, 2024 (4) Amount % Amount % Center Store (1) $ 342,702 58.8 % $ 333,333 59.8 % Fresh (2) 210,984 36.2 198,094 35.5 Pharmacy 26,277 4.5 23,994 4.3 Other (3) 2,630 0.5 2,276 0.4 Total Sales $ 582,593 100.0 % $ 557,697 100.0 % (1) Consists primarily of grocery, dairy, frozen, health and beauty care, general merchandise and liquor. (2) Consists primarily of produce, meat, deli, seafood, bakery, prepared foods and floral. (3) Consists primarily of sales related to other income streams, including service fees related to digital sales, wholesale sales and gift card, lottery and other 3rd party commissions. (4) Fiscal 2025 revenues by category have been reclassified to conform to the Fiscal 2026 current presentation by product category. 2. MERCHANDISE INVENTORIES At October 25, 2025 and July 26, 2

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