SPRINGFIELD, N.J., March 8, 2011 (GLOBE NEWSWIRE) -- Village Super Market, Inc. (Nasdaq:VLGEA) today reported its results of operations for the second quarter ended January 29, 2011.
Net income was $6,616,000 in the second quarter of fiscal 2011, a decrease of 2% from the second quarter of the prior year. Net income decreased primarily due to lower gross profit as a percentage of sales. This decrease was substantially offset by improved sales and lower operating expenses as a percentage of sales.
Sales were $329,917,000 in the second quarter of fiscal 2011, an increase of 4.6% from the second quarter of the prior year. Sales increased due to the opening of the Washington, NJ replacement store on February 21, 2010 and a same store sales increase of 3.1%. This compares to a same store sales decrease in the second quarter of the prior year of 1.7% and flat same store sales in the first quarter of fiscal 2011. Same store sales increased due to improved sales in the Marmora store, higher sales in one store due to a store closing by a competitor, a substantial increase in transaction counts and a slight increase in average transaction size. Sales continue to be impacted by changing consumer behavior due to economic weakness which has resulted in increased sale item penetration and trading down. The Company expects same store sales in fiscal 2011, excluding the impact of the 53rd week in the prior year, to range from 1% to 3%.
Gross profit as a percentage of sales decreased to 26.9% in the second quarter of fiscal 2011 compared to 27.3% in the second quarter of the prior year primarily due to decreased departmental gross margin percentages, lower patronage dividends and higher LIFO charges. These declines were partially offset by lower warehouse assessment charges from Wakefern.
Operating and administrative expense as a percentage of sales decreased to 21.9% in the second quarter of fiscal 2011 compared to 22.3% in the second quarter of the prior year primarily due to lower payroll and benefit costs, partly due to operating leverage from the 3.1% same store sales increase. These improvements were partially offset by increased snow removal cost.
Net income was $10,550,000 in the six-month period of fiscal 2011, a decrease of 6% from the prior year. Sales for the six-month period of fiscal 2011 were $637,314,000, an increase of 3.1% from the prior year. Same store sales increased 1.6%.
On December 3, 2010, the Board of Directors declared a special dividend of $1.25 per Class A common share and $.8125 per Class B common share. The $14,005,000 of special dividends were paid on December 28, 2010 to shareholders of record at the close of business on December 15, 2010. The Board declared these dividends to provide a return to shareholders in 2010, instead of 2011, while tax rates on dividends remained low. This action was taken before the 15% dividend tax rate was extended. The Board's current intention is to pay quarterly dividends in 2011 in a range of $.06 - $.12 per Class A share ($.039 - $.078 per Class B share). The Board will reconsider dividend policy and other methods of providing returns to shareholders in 2012 based on a variety of factors, including tax rates on dividends and capital gains in effect at that time.
Village Super Market operates a chain of 26 supermarkets under the ShopRite name in New Jersey and eastern Pennsylvania.
All statements, other than statements of historical fact, included in this Press Release are or may be considered forward-looking statements within the meaning of federal securities law. The Company cautions the reader that there is no assurance that actual results or business conditions will not differ materially from future results, whether expressed, suggested or implied by such forward-looking statements. The Company undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date hereof. The following are among the principal factors that could cause actual results to differ from the forward-looking statements: local economic conditions; competitive pressures from the Company's operating environment; the ability of the Company to maintain and improve its sales and margins; the ability to attract and retain qualified associates; the availability of new store locations; the availability of capital; the liquidity of the Company; the success of operating initiatives; consumer spending patterns; the impact of higher energy prices; increased cost of goods sold, including increased costs from the Company's principal supplier, Wakefern; the results of litigation; the results of tax examinations; the results of union contract negotiations; competitive store openings; the rate of return on pension assets; and other factors detailed herein and in the Company's filings with the SEC.
CONTACT: Kevin Begley, CFO (973) 467-2200 - Ext. 220 Kevin.Begley@wakefern.com