Company Overview
Weis Markets, Inc. engages in the retail sale of food through an extensive chain of supermarkets that offer a comprehensive array of groceries, dairy products, frozen food, meats, seafood, fresh produce, floral items, pharmacy services, deli products, prepared food, bakery products, beer and wine, and fuel. Operating within the Consumer Defensive sector and specifically in the Grocery Stores industry, the company provides essential goods to consumers, a position that typically offers stability against economic fluctuations. The company holds a market capitalization of $1.69B and generates annual revenue of $4.96B, supported by a workforce of 22,000 employees. These financial figures indicate that Weis Markets operates as a significant regional retailer with a substantial asset base, suggesting a established market presence that allows for economies of scale in purchasing and distribution.
Financial Health
The company reported a revenue of $4.96B, a net income of $93.69M, and an EBITDA of $238.44M over the trailing twelve months. The substantial gap between the $4.96B revenue and the $93.69M net income reveals a cost structure heavily influenced by high operating expenses, including wages, rent, and cost of goods sold, which are typical in the grocery retail sector but result in a lower bottom line relative to top-line sales. The free cash flow stands at $-20,334,750, which indicates a period where capital expenditures and working capital requirements exceeded cash generated from operations, potentially limiting immediate financial flexibility for large-scale acquisitions without external financing. Profitability is reflected in a gross margin of 25.5%, an operating margin of 2.8%, and a profit margin of 1.9%; these figures suggest that while the company retains a healthy portion of revenue after direct costs, operating leverage is tight, and the final profit is a fraction of total sales. Regarding liquidity and solvency, the company holds $214.18M in cash against $172.09M in debt, resulting in a debt-to-equity ratio of 12.73, which signifies a leveraged balance sheet where debt obligations are significantly larger than the equity base. Despite the high leverage, the current ratio of 1.93 indicates strong short-term liquidity, as the company holds nearly twice the value of current assets compared to its current liabilities, ensuring it can meet near-term obligations. Return metrics show a Return on Equity of 6.7% and a Return on Assets of 3.5%, revealing that management effectiveness in generating returns on shareholder capital and total assets is moderate, particularly when considering the high leverage employed to finance operations.
Valuation Assessment
The trailing P/E ratio is 18.70, while the forward P/E is listed as N/A, implying that analyst expectations for future earnings growth are either not yet modeled or are not projected to significantly differ from current earnings levels in a way that yields a specific forward multiple. The price-to-book ratio is 1.25, which indicates that the market values the company at a slight premium over its net asset value, suggesting investors are paying a small amount above the book value of equity. Alternative valuation metrics include a price-to-sales ratio of 0.34 and an EV/EBITDA of 6.91; these figures suggest the company is valued relatively cheaply on a sales basis and on an enterprise value basis compared to earnings, which often appeals to value-oriented investors. The stock's price range over the last year has fluctuated between a 52-week high of $90.23 and a 52-week low of $59.99, providing a context for understanding the current price volatility and historical trading bands. The beta value is 0.45, which means the stock price exhibits significantly lower volatility relative to the broader market, moving less than half as much as the overall index in response to market movements.
Growth & Income
Revenue growth is reported at 5.1% year-over-year, while earnings growth stands at -3.1% year-over-year, indicating that earnings are growing slower than revenue due to declining profitability in the most recent period, likely driven by margin compression or one-time costs. As a dividend payer, the company offers a dividend yield of 2.0% with a payout ratio of 37.3%, which suggests the dividend is sustainable given that the payout consumes less than half of the annual net income. The low payout ratio combined with the negative earnings growth highlights a tension between maintaining current dividend levels and the need to preserve cash for operations and debt service. Overall, the growth and income profile presents a scenario of stable revenue expansion with suppressed earnings and a conservative dividend policy that prioritizes capital retention over aggressive share count reductions or large dividend increases.