Weis Markets and C&S Wholesale Grocers have inked a new agreement in which the Sunbury, PA-based regional chain will expand its distribution services with the large grocery wholesaler which is based in Keene, NH. The retailer also announced strong fourth quarters and year end sales and earnings.
As part of the new distribution arrangement, Weis will exclusively utilize C&S’ 210,000 square foot North East, MD (Cecil County) warehouse to supply 97 stores with dry grocery and dairy products in an area that roughly covers Weis’ southeastern store corridor which includes parts of Maryland, Central Pennsylvania and the Philadelphia area. The North East facility was being used to supply Mid-Atlantic Target stores until recently. Additionally, Weis will also be using C&S’ 400,000 square foot depot in Aberdeen, MD (Harford County) to supply frozen foods and ice cream to 76 stores. Unlike the Northeast warehouse, Weis will be sharing that DC with current C&S retail customers Giant Food (Ahold Delhaize USA) and Safeway (Albertsons).
Also part of the broadened Weis-C&S distribution relationship is news that C&S’ natural, organic, specialty and ethnic division (Davidson Co.) is now also supplying all of Weis’ 197 stores in Pennsylvania, Maryland, Delaware, New Jersey, Virginia and West Virginia.
Weis’ relationship with the large privately-held distributor dates back to 2015 when the regional chain first utilized C&S to supply tobacco and slow-moving HBC/GM items from a C&S DC in York, PA that was acquired as part of the wholesaler’s 2014 purchase of co-operative wholesaler AWI.
In 2021, Weis engaged C&S again to supply 60 stores with dairy and frozen items from the wholesaler’s Robesonia, PA facility.
With the new arrangement, C&S’ Robesonia depot will no longer be utilized by Weis and the closely-held merchant’s main DC in Milton, PA will continue to serve as the primary warehouse to service all Weis stores. However, the Milton facility, which was expanded by 210,000 square feet in 2017 and now encompasses 1.3 million square feet, is nearing capacity and Weis has been exploring ways to expand its distribution footprint for more than a year.
It is believed that Weis signed a multi-year contract with C&S. However, both Weis chairman and CEO Jonathan Weis and COO Kurt Schertle have previously said that the company’s Milton distribution center will still handle the vast majority of the retailer’s supply chain capacity. Weis’ expanded relationship with C&S continues to be a “bridge strategy,” as the company looks to expand its own distribution capacity in its southern footprint Weis said it expects to begin fully integrating the two new C&S depots by early April.
On the financial front, the news continues to be excellent. Net sales totaled $1.31 billion for the 14-week fourth quarter ended December 31, 2022, compared to $1.11 billion for the 13-week fourth quarter ended December 25, 2021, up 18.0 percent. Fourth quarter comparable store sales, adjusted for an additional week in 2022, increased 9.5 percent on an individual year-over-year basis and increased 16.4 percent on a two-year stacked basis following the increase of 14.1 percent for the same period in 2020.
Weis said its Q4 net income (after provision for income taxes) totaled $28.88 million compared to $22.61 million in 2021, up 27.7 percent. Fourth quarter earnings per share totaled $1.07 compared to $0.84 per share in 2021.
Net sales totaled $4.70 billion for the 53-week fiscal year ended December 31, 2022, compared to $4.22 billion for the 52-week fiscal year ended December 25, 2021, up 11.2 percent. Fiscal year 2022 comparable store sales, adjusted for an additional week in 2022, increased 8.8 percent on an individual year-over-year basis and increased 10.5 percent on a two-year stacked basis following the increase of 16.4 percent for the same period in 2020.
Fiscal year 2022 net income (after provision for income taxes) totaled $125.20 million compared to $108.85 million in 2021, up 15.0 percent. Fiscal year 2022 earnings per share totaled $4.65 compared to $4.05 per share in 2021.
“We continued our positive momentum in the fourth quarter which contributed to a strong fiscal year 2022,” said chairman, president and CEO Weis. “Our fourth quarter results were favorably impacted by disciplined loyalty marketing programs and ongoing price investments across the store. The focus on customer experience along with leveraging store level and supply chain efficiencies helped offset some of the current inflationary pressures of higher product, fuel, utilities, and other operating costs.
We also continued to reinvest in our future through execution of our multi-year capital expenditures program, completing ten store remodels, three new fuel centers, one new store, one rebuild, and a record number of smaller projects which help us efficiently serve our customers,” said Weis. “We are grateful to our dedicated store, supply chain, manufacturing, and support center associates who make our success possible.”
Additionally, the retailer’s board of directors declared on February 2, 2023 a quarterly cash dividend of $0.34 per share to shareholders of record as of February 13, 2023 payable on February 27, 2023.
