VLGEA's Q1 EPS Up 10% Y/Y, Digital Sales Drive 4% Revenue Growth

Core Insights - Village Super Market, Inc. (VLGEA) shares have declined 1.4% since the earnings report for the quarter ended October 26, 2024, underperforming the S&P 500 index which grew by 0.4% during the same period [1] - The stock has seen a 5.6% decline over the past month compared to the S&P 500's 1.9% growth, indicating a consistent underperformance relative to the broader market [1] Key Financial Highlights - For the first quarter of fiscal 2025, the company reported earnings per share of 86 cents, an increase from 78 cents in the previous year [2] - Sales reached $557.7 million, reflecting a 4$536.4 million in the prior-year period, driven by a 2.4% rise in same-store sales and contributions from a new store in Old Bridge, NJ [3] Operational Insights - Gross profit as a percentage of sales improved to 29% from 28.5%, aided by increased patronage dividends and reduced warehouse assessment charges, although these gains were partially offset by an unfavorable product mix and higher promotional spending [4] - Operating and administrative expenses increased to 24.7% of sales from 24.3% in the prior-year quarter, primarily due to rising employee costs and higher digital sales-related fees, though cost efficiencies were achieved in fixed occupancy and supply spending [5] Interest Expenses - Interest expense declined due to lower average outstanding debt, while interest income also decreased as a result of reduced investments in demand deposits [6] Net Income - Net income for the quarter rose to $12.8 million, marking an 11$11.6 million a year ago [7] Management Commentary - Management noted the positive impact of store remodels and digital sales growth on same-store performance, with the new Old Bridge location being a significant driver of top-line expansion, despite the closure of a Gourmet Garage store [8] Factors Influencing Performance - Sales growth was supported by strategic investments in digital and pharmacy offerings, while inflationary pressures on wages and utilities negatively impacted profitability, alongside promotional spending and unfavorable product mix changes [9] Other Developments - The company finalized the closure of one Gourmet Garage location in New York City during the quarter, which affected sales but aligns with its strategic store optimization efforts [11]