Weis Markets' Profit Dips Amid Rising Costs, Share Buyback

TL;DR

**WMK's profit slump and cash drain from buybacks make it a risky bet despite sales growth; stay away.**

AI Summary

Weis Markets Inc. reported a decline in net income for both the 13 and 39 weeks ended September 27, 2025, despite an increase in net sales. For the 13 weeks, net income decreased by 29.4% to $18.233 million from $25.840 million in the prior year, while net sales rose 4.4% to $1.238 billion from $1.186 billion. For the 39 weeks, net income fell 13.3% to $65.237 million from $75.263 million, with net sales increasing 2.9% to $3.649 billion from $3.547 billion. Operating, general, and administrative expenses increased significantly, rising 7.9% to $286.313 million for the 13 weeks and 4.9% to $839.207 million for the 39 weeks. The company also executed a substantial share purchase of 2,153,846 shares for $141.400 million during the 39-week period, contributing to a decrease in total shareholders' equity by $102.603 million to $1.343 billion. Cash and cash equivalents decreased by $135.673 million to $54.650 million, primarily due to the share purchase and increased capital expenditures of $152.217 million.

Why It Matters

Weis Markets' declining net income despite revenue growth signals margin pressure, which could impact investor returns and future growth prospects. The significant share buyback of $141.4 million, while potentially boosting EPS, also reduced cash reserves by $135.673 million, limiting financial flexibility for strategic investments or weathering economic downturns. In a competitive grocery market, increased operating expenses could hinder Weis Markets' ability to compete on price or invest in customer experience, potentially affecting market share against larger rivals like Walmart or regional competitors. Employees might also face pressure if cost-cutting measures become necessary to improve profitability.

Risk Assessment

Risk Level: medium — The company's net income decreased by 29.4% for the 13 weeks and 13.3% for the 39 weeks ended September 27, 2025, indicating declining profitability. Cash and cash equivalents significantly dropped by $135.673 million to $54.650 million, largely due to a $140.000 million share purchase and increased capital expenditures of $152.217 million, reducing liquidity.

Analyst Insight

Investors should exercise caution and monitor WMK's next earnings report closely for signs of margin improvement and cash flow stabilization. The significant share buyback, while reducing share count, has severely impacted liquidity, suggesting a potential overextension. Consider reducing exposure until profitability trends reverse and cash reserves are rebuilt.

Financial Highlights

revenue

$3.649B

total Assets

$2.018T

net Income

$65.237M

cash Position

$54.650M

revenue Growth

+2.9%

Key Numbers

• $18.233M — Net Income (13 weeks) (Decreased 29.4% from $25.840M year-over-year)
• $65.237M — Net Income (39 weeks) (Decreased 13.3% from $75.263M year-over-year)
• $1.238B — Net Sales (13 weeks) (Increased 4.4% from $1.186B year-over-year)
• $3.649B — Net Sales (39 weeks) (Increased 2.9% from $3.547B year-over-year)
• $286.313M — Operating, General & Administrative Expenses (13 weeks) (Increased 7.9% from $265.457M year-over-year)
• $839.207M — Operating, General & Administrative Expenses (39 weeks) (Increased 4.9% from $799.640M year-over-year)
• $140.000M — Share Purchase (Cash used in financing activities for share buyback)
• $54.650M — Cash and Cash Equivalents (Decreased $135.673M from beginning of year)
• $152.217M — Purchase of Property and Equipment (Increased from $107.932M year-over-year)
• 24,744,597 — Shares Outstanding (Decreased from 26,898,443 due to share purchase)

Key Players & Entities

• WEIS MARKETS INC (company) — registrant
• Wells Fargo Bank, N.A. (company) — revolving credit agreement provider
• $18.233 million (dollar_amount) — net income for 13 weeks ended September 27, 2025
• $25.840 million (dollar_amount) — net income for 13 weeks ended September 28, 2024
• $65.237 million (dollar_amount) — net income for 39 weeks ended September 27, 2025
• $75.263 million (dollar_amount) — net income for 39 weeks ended September 28, 2024
• $1.238 billion (dollar_amount) — net sales for 13 weeks ended September 27, 2025
• $3.649 billion (dollar_amount) — net sales for 39 weeks ended September 27, 2025
• $140.000 million (dollar_amount) — share purchase amount
• $54.650 million (dollar_amount) — cash and cash equivalents at September 27, 2025

FAQ

Risk Factors

• Significant Share Repurchase Impact [high — financial]: Weis Markets executed a substantial share purchase of 2,153,846 shares for $141.400 million. This transaction significantly reduced cash and cash equivalents by $135.673 million to $54.650 million and decreased total shareholders' equity by $102.603 million to $1.343 billion. The reduction in cash reserves could impact the company's ability to fund operations or future investments.
• Rising Operating Expenses [medium — operational]: Operating, general, and administrative expenses increased by 7.9% to $286.313 million for the 13 weeks and 4.9% to $839.207 million for the 39 weeks. This rise in expenses outpaced net sales growth for the 13-week period, contributing to a decline in net income.
• Declining Net Income Despite Sales Growth [high — financial]: For the 13 weeks ended September 27, 2025, net income decreased by 29.4% to $18.233 million, while net sales increased by 4.4% to $1.238 billion. Similarly, for the 39 weeks, net income fell 13.3% to $65.237 million despite a 2.9% increase in net sales to $3.649 billion. This indicates margin pressure or increased costs impacting profitability.
• Increased Capital Expenditures [medium — financial]: The company increased capital expenditures for property and equipment to $152.217 million from $107.932 million year-over-year. While this investment may support future growth, it further strained cash resources, contributing to the decrease in cash and cash equivalents.

Industry Context

The grocery retail industry is highly competitive, characterized by thin profit margins and intense price sensitivity among consumers. Companies like Weis Markets face pressure from large national chains, discount grocers, and the growing online grocery sector. Trends include a focus on fresh and prepared foods, private label expansion, and investments in e-commerce capabilities.

Regulatory Implications

As a publicly traded company, Weis Markets is subject to SEC regulations and reporting requirements, including the timely filing of 10-Q and 10-K reports. Compliance with accounting standards and disclosure rules is critical to maintaining investor confidence and avoiding penalties. Potential regulatory changes impacting food safety, labor, or environmental standards could also affect operations.

What Investors Should Do

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Key Dates

• 2025-09-27: End of the third quarter for the fiscal year 2025 — Reporting period for the 13 and 39 weeks of financial results, showing declining net income despite sales growth.
• 2024-12-28: End of the fiscal year 2024 — Balance sheet comparison point, showing a significantly higher cash position ($190.323M) and shareholders' equity ($1.446B) compared to September 27, 2025.

Glossary

Operating, general and administrative expenses

Costs incurred by a company in its day-to-day operations that are not directly related to the production of goods or services, such as salaries of administrative staff, rent, utilities, and marketing. (A significant increase in these expenses (7.9% for 13 weeks) is a key factor contributing to the decline in net income, despite rising sales.)

Treasury stock

Shares of a company's own stock that it has repurchased from the open market. These shares are no longer outstanding and do not carry voting rights. (The company's treasury stock balance increased substantially from ($150.857M) to ($292.257M), reflecting the significant share repurchase program executed during the period.)

Retained earnings

The cumulative amount of net income that a company has kept over time, rather than distributing it to shareholders as dividends. It represents profits reinvested back into the business. (Retained earnings increased to $1.628 billion, indicating that the company has been profitable over time, though current period net income has declined.)

Accumulated other comprehensive income (loss)

A component of shareholders' equity that includes unrealized gains and losses on certain investments, foreign currency translation adjustments, and pension plan adjustments, which are not included in net income. (The company reported a net loss in this category of ($2.594M) as of September 27, 2025, which slightly improved from ($2.859M) at the end of the prior fiscal year.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Weis Markets Inc. has seen a notable decline in net income, down 29.4% for the 13 weeks and 13.3% for the 39 weeks, despite modest increases in net sales (4.4% and 2.9%, respectively). This divergence is largely attributed to a significant 7.9% increase in operating, general, and administrative expenses for the 13-week period. Furthermore, the company's cash position has been substantially reduced due to a large share repurchase program and increased capital expenditures, leading to a decrease in total shareholders' equity.

Filing Documents

• wmk-20250927x10q.htm (10-Q) — 1395KB
• wmk-20250927xex31d1.htm (EX-31.1) — 14KB
• wmk-20250927xex31d2.htm (EX-31.2) — 13KB
• wmk-20250927xex32.htm (EX-32) — 7KB
• 0000105418-25-000045.txt ( ) — 5711KB
• wmk-20250927.xsd (EX-101.SCH) — 34KB
• wmk-20250927_cal.xml (EX-101.CAL) — 56KB
• wmk-20250927_def.xml (EX-101.DEF) — 127KB
• wmk-20250927_lab.xml (EX-101.LAB) — 329KB
• wmk-20250927_pre.xml (EX-101.PRE) — 241KB
• wmk-20250927x10q_htm.xml (XML) — 956KB

Financial Information

Part I. Financial Information

Financial Statements

Item 1. Financial Statements Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Income 2 Condensed Consolidated Statements of Comprehensive Income 3 Condensed Consolidated Statements of Shareholders' Equity 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6

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

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

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 22

Controls and Procedures

Item 4. Controls and Procedures 22

Other Information

Part II. Other Information

Risk Factors

Item 1A. Risk Factors 23

Other Information

Item 5. Other Information 23

Exhibits

Item 6. Exhibits 23

Signatures

Signatures 24 Exhibit 31.1 Rule 13a-14(a) Certification – CEO Exhibit 31.2 Rule 13a-14(a) Certification – CFO Exhibit 32 Certification Pursuant to 18 U.S.C. Section 1350 Table of Contents WEIS MARKETS, INC.

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION ITEM I – FINANCIAL STATEMENTS CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (amounts in thousands, except shares) September 27, 2025 December 28, 2024 Assets Current: Cash and cash equivalents $ 54,650 $ 190,323 Marketable securities 122,944 191,971 SERP investment 32,230 31,123 Accounts receivable, net 89,974 81,567 Inventories 323,375 308,895 Income taxes recoverable 9,807 — Prepaid expenses and other current assets 46,725 40,980 Total current assets 679,705 844,859 Property and equipment, net 1,076,185 1,011,498 Operating lease right-to-use 168,523 165,760 Goodwill 65,691 61,255 Intangible and other assets, net 27,709 24,066 Total assets $ 2,017,813 $ 2,107,438 Liabilities Current: Accounts payable $ 242,433 $ 234,278 Accrued expenses 39,711 34,196 Operating leases 39,618 39,336 Accrued self-insurance 19,400 19,729 Deferred revenue, net 9,545 13,040 Income taxes payable — 2,723 Total current liabilities 350,707 343,304 Postretirement benefit obligations 32,234 31,123 Accrued self-insurance 25,638 25,662 Operating leases 135,598 134,127 Deferred income taxes 126,035 112,149 Other 4,173 15,044 Total liabilities 674,385 661,409 Shareholders' Equity Common stock, no par value, 100,800,000 shares authorized, 33,047,807 shares issued, 24,744,597 shares outstanding 9,949 9,949 Retained earnings 1,628,330 1,589,797 Accumulated other comprehensive income (loss) (Net of deferred taxes of $ 926 in 2025 and $ 1,029 in 2024) ( 2,594 ) ( 2,859 ) 1,635,685 1,596,888 Treasury stock at cost, 8,303,210 shares ( 292,257 ) ( 150,857 ) Total shareholders' equity 1,343,428 1,446,031 Total liabilities and shareholders' equity $ 2,017,813 $ 2,107,438 See accompanying notes to Condensed Consolidated Financial Statements. As of December 28, 2024, the number of shar