Village Super Market(VLGEA) - 2026 Q1 - Quarterly Report

Financial Performance - Sales for the 13 weeks ended October 25, 2025, were $582,593, an increase of 4.5% compared to the same period in 2024, driven by a 2.5% increase in same store sales and the opening of a new store [69]. - Gross profit as a percentage of sales decreased by 0.72% to 28.31% due to lower patronage dividends, decreased departmental gross margins, and increased promotional spending [70]. - Net income for the 13 weeks ended October 25, 2025, was $12,002, a decrease from $12,803 in the same period in 2024, while adjusted net income was $12,496, down 2% [74]. Expenses and Costs - Operating and administrative expenses as a percentage of sales decreased by 0.38% to 24.28%, with adjusted operating expenses decreasing by 0.51% [71]. - The effective income tax rate increased slightly to 31.4% from 31.2% year-over-year [74]. Capital Expenditures - The company has budgeted $75,000 for capital expenditures in fiscal 2026, including costs for a new store in East Orange, NJ, and various remodels and technology upgrades [79]. - Capital expenditures are budgeted at $75,000 for fiscal 2026, including a replacement store in East Orange, NJ, expected to open in fiscal 2026 [88]. Working Capital and Financing - Working capital increased to $31,520 at October 25, 2025, compared to $23,840 at July 26, 2025, with a working capital ratio of 1.17 [82]. - The company has a credit facility with Wells Fargo, with $65,979 available under the unsecured revolving line of credit as of October 25, 2025 [83]. - The Company has an unsecured revolving line of credit with a maximum borrowing amount of $75,000, expiring on April 30, 2030, bearing interest at SOFR plus 1.25% [94]. Interest Rate Management - As of October 25, 2025, the Company had five interest rate swaps with an aggregate initial notional value of $99,975 to hedge variable cash flows associated with variable-rate loans [96]. - The fair value of interest rate swaps recorded in Other assets is $4,737 as of October 25, 2025 [97]. - The Company holds variable rate notes receivable due from Wakefern totaling $113,315, with interest rates tied to the prime rate and SOFR [98]. - Cash and cash equivalents include $99,723 in demand deposits invested at Wakefern, exposed to interest rate changes [99]. Employee Relations - Approximately 91% of employees are covered by collective bargaining agreements, which could impact financial results if work stoppages occur [91]. Legal Matters - The Company is currently engaged in litigation with Wakefern, the impact of which on results of operations is currently uncertain [92]. Future Outlook - The Company expects same store sales to increase between 1.0% and 3.0% in fiscal 2026 [88]. - The effective income tax rate is anticipated to be in the range of 31.0% - 32.0% for fiscal 2026 [88].