Weis Markets reported that its Q1 revenue increased 12.4 percent to $985.8 million during the 13-week period ended March 28, 2020, compared to the same period in 2019, while first quarter comparable store sales increased 12.8 percent.
The Sunbury, PA-based regional chain added that first quarter net income increased 86.6 percent to $26.7 million compared to $14.3 million in 2019, while earnings per share totaled $0.99 compared to $0.53 per share for the same period in 2019.
Weis’ results were impacted by the onset of the novel coronavirus pandemic (COVID-19) and the subsequent business and school closures and stay-at-home orders in its markets beginning in the second week of March. Consequently, there was a significant surge in customer count and sales. Its January and February sales were impacted by a mild winter compared to 2019.
“Our team quickly adapted to this changed market environment and resulting supplier disruptions by accelerating and increasing replenishment shipments to our stores and implementing a comprehensive COVID-19 prevention program in our stores, distribution, manufacturing and support facilities to provide a safe shopping and working environment,” said chairman and CEO Jonathan Weis. “We carry a profound sense of sadness for those who are suffering or have lost their lives during this pandemic, and a tremendous appreciation for the essential Weis Markets associates who come to work each day, providing the products and services that are allowing our customers to stay at home and help stop the spread of the novel coronavirus.”
Adjusting for the impact of this pandemic, Weis estimates its comparable store sales increased 1.5 percent compared to the same period in 2019.
Four days earlier during its annual shareholders meeting held on April 30 at Weis’ headquarters in Sunbury (where social distancing was practiced), Weis summarized his company’s results over the past year.
“We made significant forward progress in 2019 by driving sales with targeted merchandising and marketing programs, significant price investments and improved in-store execution. We also expanded online ordering with in-store pickup and home delivery to 184 stores, which resulted in more than 250,000 orders and a 115.4 percent increase in online sales,” the 52-year old chief executive stated. “It is important to note our sales and comparable-store sales continued to benefit from multi-million-dollar investments in our ‘Low, Low Price’ program which offers price reductions on 7,000 private-brand items and we also made significant gains with targeted loyalty marketing programs, varied promotions and advertising in key markets.”
He also told shareholders about Weis’ continued investment plans. In 2019, the regional merchant completed 10 remodels; opened its first New Jersey liquor store near its Randolph location; opened a new store in Bedminster, PA; and completed work on three fuel centers.
“Fuel centers are an increasingly important part of our go-to-market strategy. We currently operate 42 fuel centers where nearly half of all Weis gas rewards are redeemed,” Weis explained. “In 2020, we will build four additional fuel centers and are planning for more in the years ahead.
We also completed more than a hundred smaller projects including resets, self-scan installations and upgrades and the continuing expansion of our ‘Weis 2 Go’ online ordering program with curbside pickup and delivery. We also continue to invest in our distribution center, which supplies nearly 200 stores enabling us to improve our supply chain. One notable project was the construction of a new ripening facility that allows us to produce bananas at various levels of ripeness. This ensures a better product for our customers and contributes strongly to our profitability.”
Weis said that his company plans to invest $86 million in its growth program. The 197-store retailer intends to build five new stores in: Dingman’s Ferry, PA; Bethlehem, PA (replacement); Macungie, PA (replacement); and Gap, PA (rebuild from a fire that occurred in November 2019); along with another new store in Martinsburg, WV.
Its cap-ex budget also calls for four remodels, continuing distribution upgrades and hundreds of smaller improvement projects. Weis added that he expects work on the company’s Keystone State projects to resume this month.
Before answering questions from shareholders, Weis took a moment to update the company’s stockholders on the “achievements of our team during the COVID-19 pandemic.”
“Since early March, we have seen a tremendous surge in demand which has challenged us in many ways. We have seen supply chain disruption, overwhelming demand for certain products and services, constantly changing state edicts, and a need for store support center employees to work remotely for six weeks or more.
“At store level, our teams have risen to the challenge and helped us comply with the evolving government safety requirements. Each day, we are investing additional resources to clean and sanitize our stores on an hourly basis, before they open and after they close.
“As part of this process, many of our store support associates have redeployed to work in stores and our distribution center. Our goals are simple – to protect our valued associates while assuring that we can continue to provide our valued customers with value and choice during particularly stressful times…I’m incredibly proud of our many dedicated team members throughout our organization.”