Item 1a. Risk Factors:
Competitive and Reputational Risks
The Company’s industry is highly competitive. If the Company is unable to compete effectively, the Company’s financial condition and results of operations could be materially affected.
The retail food industry is intensely price competitive, and the competition the Company encounters may have a negative impact on product retail prices. The operating environment continues to be characterized by aggressive expansion, entry of non-traditional competitors, market consolidation and increasing fragmentation of retail and online formats. The introduction of on-line food retail in recent years has augmented competition in industry. The financial results may be adversely impacted by a competitive environment that could cause the Company to reduce retail prices without a reduction in its product cost to maintain market share; thus, reducing sales and gross profit margins.
Food safety issues could result in the loss of consumer confidence in the Company.
Customers count on the Company to provide them with safe and wholesome food products. Concerns regarding the safety of food products sold in its stores could cause shoppers to avoid purchasing certain products from the Company, or to seek alternative sources of supply for all of their food needs, even if the basis for the concern is outside of the Company’s control. A loss in confidence on the part of its customers would be difficult and costly to reestablish. As such, any issue regarding the safety of any food items sold by the Company, regardless of the cause, could have a substantial and adverse effect on operations.
The Company may be unable to retain key management personnel.
The Company’s success depends to a significant degree upon the continued contributions of senior management. The loss of any key member of management may prevent the Company from implementing its business plans in a timely manner. In addition, employment conditions specifically may affect the Company’s ability to hire and train qualified employees.
Financial, Investments and Infrastructure Risks
The failure to execute expansion plans could have a material adverse effect on the Company’s business and results of its operations.
Circumstances outside the Company’s control could negatively impact anticipated capital investments in the Company’s stores, distribution and manufacturing, as well as in information technology and equipment. The Company cannot determine with certainty whether its new or acquired stores will meet expected benefits including, among other things, operating efficiencies, procurement savings, innovation, sharing of best practices and increased market share that may allow for future growth. Achieving the anticipated benefits may be subject to a number of significant challenges and
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Item 1a. Risk Factors: (continued)
uncertainties, including, without limitation, the possibility of imprecise assumptions underlying expectations regarding potential synergies and the integration process, unforeseen expenses and delays diverting Management’s time and attention and competitive factors in the marketplace.
The Company’s investment portfolio may suffer losses from changes in market interest rates and changes in market conditions which could adversely affect results of operations and liquidity.
The Company’s marketable securities consist of corporate and municipal bonds and commercial paper. These investments are subject to general credit, liquidity, market and interest rate risks. As a result, the Company may experience a reduction in value or loss of liquidity from investments, which may have a negative impact on the Company’s financial condition and results of operations.
Unexpected factors affecting self-insurance claims and reserve estimates could adversely affect the Company.
The Company uses a combination of insurance and self-insurance to provide for potential liabilities for workers’ compensation, general liability, vehicle accident, property and employee medical benefit claims. Management estimates the liabilities associated with the risks retained by the Company, in part, by considering historical claims experience, demographic and severity factors and other actuarial assumptions which, by their nature, are subject to a high degree of variability. Any projection of losses concerning workers’ compensation and general liability is subject to a high degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns.
Information Security, Cybersecurity and Data Privacy Risks
Disruptions or cybersecurity breaches in the Company’s information technology systems could adversely affect results of operations.
The Company’s business is highly dependent on complex information technology systems that are vital to its continuing operations. If the Company was to experience difficulties maintaining existing systems or implementing new systems, significant losses could be incurred due to disruptions in its operations. Additionally, these systems contain valuable proprietary data as well as receipt and storage of personal information about its employees and customers, in particular electronic payment data and personal health information that, if breached, would have an adverse effect on the Company. Such an occurrence could adversely affect the Company’s reputation with its customers, employees, and vendors, as well as the Company’s financial condition, results of operations, and liquidity with potential litigation against the Company or the imposition of penalties. The techniques and sophistication used in breach information technology systems and the rapid evolution and increased adoption of artificial intelligence technologies may intensify the Company’s cybersecurity risks.
Supply Chain and Third-Party Risks
The Company is affected by certain operating costs which could increase or fluctuate considerably, and other potential disruptions.
Employee expenses contribute to the majority of the Company’s operating costs. The Company’s financial performance is potentially affected by increasing wage and benefit costs, a competitive labor market, regulatory wage increases and the risk of unionized labor disruptions of its non-union workforce. The Company’s profit is particularly sensitive to the cost of oil. Oil prices directly affect the Company’s product transportation costs, as well as its utility and petroleum-based supply costs. It also affects the costs of its suppliers, which impacts its cost of goods. Additionally, disruptions to the Company’s distribution of food products pose significant risks to the Company's operations. Various factors such as extreme weather conditions, food and drug safety, health epidemics or pandemics, and civil unrest could all contribute to such disruptions.
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Item 1a. Risk Factors: (continued)
Changes in vendor promotions or allowances, including the way vendors target their promotional spending, and the Company’s ability to effectively manage these programs could significantly impact margins and profitability.
The Company cooperatively engages in a variety of promotional programs with its vendors. As the parties assess the results of specific promotions and plan for future promotions, the nature of these programs and the allocation of dollars among them changes over time. The Company manages these programs to maintain or improve margins while at the same time increasing sales. A reduction in overall promotional spending or a shift by vendors in promotional spending away from certain types of promotions that the Company and its customers have historically utilized could have a significant impact on profitability.
Legal, Regulatory and Other External Risks
The trade area of the Company is located within a region and is subject to the economic, social and climate variables of that region.
The majority of the Company’s stores are concentrated in central and northeast Pennsylvania, central Maryland, suburban Washington, DC and Baltimore regions and New York’s Southern Tier. Changes in economic and social conditions in the Company’s operating regions, including fluctuations in the inflation rate along with changes in population and employment and job growth rates and changes in government benefits such as SNAP/EBT or child care credits, affect customer shopping habits. Business disruptions due to extreme weather and catastrophic events may also affect our business. The Company’s geographic regions could receive an extreme variance in the amount of annual snowfall that may materially affect sales and expense results.
Various aspects of the Company’s business are subject to federal, state and local laws and regulations.
The Company is subject to various federal, state and local laws, regulations and administrative practices that affect the Company’s business. The Company must comply with numerous provisions regulating health and sanitation standards, food labeling, equal employment opportunity, minimum wages and licensing for the sale of food, drugs and alcoholic beverages. The Company’s compliance with these regulations may require additional capital expenditures and could adversely affect the Company’s ability to conduct the Company’s business as planned. Management cannot predict either the nature of future laws, regulations, interpretations or applications, or the effect either additional government regulations or administrative orders, when and if promulgated, or disparate federal, state, and local regulatory schemes would have on the Company’s future business. They could, however, require the reformulation of certain products to meet new standards, the recall or discontinuance of certain products not able to be reformulated, additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling and/or scientific substantiation. Any or all of such requirements could have an adverse effect on the Company’s financial condition, results of operations and liquidity.
The Company’s operations are exposed to risk from global economic events.
In 2025, the United States and foreign governments imposed tariffs on specific goods imported from certain trading partners. These current or proposed tariffs could result in an adverse and uncertain economic environment. The Company may face risks related to the uncertainty of future government actions, including government shutdowns, or regulations such as tariffs, duties, interpretations, administrative orders or applications that may have an adverse impact on the Company’s business and operations and the operations of the Company’s suppliers. Such risks may include lower sales volume, increased material costs, declining profitability, operational supply-chain disruptions and potential retaliatory actions.
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Item 1a. Risk Factors: (continued)
Changes in tax laws may result in higher income tax.
The Company’s future effective tax rate may increase from current rates due to changes in laws and the status of pending items with various taxing authorities. Currently, the Company benefits from a combination of its corporate structure and certain state tax laws.
The Company is a controlled Company due to the common stock holdings of the Weis family.
The Weis family’s share ownership represents approximately 61% of the combined voting power of the Company’s common stock as of December 27, 2025. As a result, the Weis family has the power to elect a majority of the Company’s directors and approve any action requiring the approval of the shareholders of the Company, including adopting certain amendments to the Company’s charter and approving mergers or sales of substantially all of the Company’s assets. Currently, one of the Company’s five directors is a member of the Weis family.
We have concluded that previously issued financial statements as detailed below should not be relied upon and have restated those previously issued financial statements, which has led to unanticipated costs for accounting and legal fees, and may result in certain other risks.
We have concluded that our previously issued financial statements as of December 28, 2024 and December 30, 2023, and our previously reported unaudited consolidated financial statements for the thirteen and thirty-nine weeks ended September 27, 2025 and September 28, 2024, the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024, and the thirteen weeks ended March 29, 2025 and March 30, 2024 should no longer be relied upon. The determination that the applicable financial statements should no longer be relied upon and that these financial statements would be restated was made following the identification of an overstatement of certain inventory amounts related to a single meat product manufacturing plant. Although the Company has restated these financial statements and remedial actions are currently being taken in our testing and evaluation of the design and operating effectiveness of these internal controls, as a result of these misstatements, we have become subject to a number of additional risks and uncertainties, including unanticipated costs for accounting and legal fees in connection with or related to the restatement, the potential for litigation and investigations, potential loss of investor confidence, and a negative impact on our stock price. Any litigation or investigation could result in substantial defense costs regardless of the outcome and the possibility of substantial damages or settlement costs.
We are remediating certain internal controls and procedures, which, if not successful, could result in additional misstatements in our financial statements negatively affecting our results of operations.
We are in the process of implementing certain remediation actions. See Item 9a. “Controls and Procedures” of this Form 10-K for a description of these remediation measures. To the extent these steps are not successful, not sufficient to correct our material weakness in internal control over financial reporting or are not completed in a timely manner, future financial statements may contain material misstatements and we could be required to restate our financial results. Any of these matters could adversely affect our business, reputation, revenues, results of operations, financial condition and stock price and limit our ability to access the capital markets through equity or debt issuances.
Item 1b. Unresolved Staff Comments:
There are no unresolved staff comments.
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Item 1c. Cybersecurity:
Risk Management and Strategy
The Company utilizes information systems to support a variety of business processes and activities in its operations. These systems may be subject to cyber-based attacks or breaches. Some examples of the cybersecurity threats that could negatively impact the Company are credit card skimmers, denial of service attacks, excessive port scans, firewall breach and computer virus outbreak.
Cybersecurity risk management is part of Management’s annual risk assessment program. In order to manage the risks associated with cybersecurity threats, the Company maintains a risk-based cybersecurity program consisting of processes, technologies, and controls to assess, identify and manage material risks from cybersecurity threats.
While the Company's information systems are exposed to cybersecurity threats and risks, the Company has not experienced any material cybersecurity incidents affecting its business strategy, results of operations, or financial
condition, and any costs or operational impacts related to cybersecurity incidents were immaterial during the period presented.
For additional information related to the risks associated with cybersecurity threats, refer to the Information Security, Cybersecurity and Data Privacy Risks section of Item 1a. Risk Factors.
Governance
Board of Directors Oversight
The Company’s Board of Directors is responsible for providing oversight and strategic guidance to management to support the long-term interests of the Company's shareholders. The Audit Committee is the lead committee of the Board of Directors responsible for oversight of the Company’s risk-based cybersecurity program and bears the primary responsibility for this aspect of the business. As part of this responsibility, the Audit Committee of the Board of Directors annually reviews the Company's Information Security Incident Response Plan.
On a quarterly basis cybersecurity incidents are summarized and reported to the Audit Committee of the Board of Directors which cover any identified cybersecurity incidents, results of third-party vulnerability testing, and key developments in policies.
Management’s Role in Managing Risk
The Company’s cybersecurity risk management is part of the Company's Information Security Office, led by the Chief Information Officer. In order to manage the risks associated with cybersecurity threats, the Company has implemented an Information Security Incident Response Plan.
The Company engages with a range of third-party experts, including cybersecurity assessors, consultants, and auditors in evaluating and testing its risk management systems. These relationships enable Management to leverage specialized knowledge and insights with respect to the Company’s cybersecurity strategies and processes.
The Company's Information Security Incident Response Plan includes detailed processes and controls related to cybersecurity awareness training for employees, phishing simulations, backup and recovery, response planning, vulnerability management and endpoint protection as well as ongoing cybersecurity requirements for third-party service
providers. The framework is regularly reviewed, assessed, and updated. This framework is designed to mitigate risks related to data breaches or other security incidents originating from third parties.
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Item 2. Properties:
As of December 27, 2025, the Company owned and operated 108 of its retail food stores and leased and operated 94 stores under operating leases that expire at various dates through 2038. The Company owns all trade fixtures and equipment in its stores and several parcels of vacant land, which are available as locations for possible future stores or other expansion.
The Company owns and operates one distribution center in Milton, Pennsylvania of approximately 1.3 million square feet, and one in Northumberland, Pennsylvania totaling approximately 76 thousand square feet. The Company also owns one warehouse complex in Sunbury, Pennsylvania totaling approximately 535 thousand square feet. The Company utilizes 258thousand square feet of its Sunbury location to operate its three manufacturing facilities which process milk, water, ice, ice cream and fresh meat products.
Item 3. Legal Proceedings:
The Company estimates any exposure to routine litigation to the business and establishes accruals for the estimated liabilities, where it is reasonably possible to estimate and where an adverse outcome is probable.
Kurt Schertle, the former Chief Operating Officer and Secretary of the Company, filed the claim, Kurt Schertle vs. Weis Markets Inc. and the Weis Markets Inc. Retirement Committee, on November 4, 2025 in the U.S. District Court for the Middle District of Pennsylvania. The case relates to certain benefit plan amounts that Mr. Schertle claims he is entitled to as a result of his former employment with the Company. The Company asserts that termination of Mr. Schertle’s employment on October 16, 2024 was for cause and that no obligation to Mr. Schertle remains. The Company does not believe the demand received on November 4, 2025 has any merit and will vigorously dispute any claim for payment.
Item 4. Mine Safety Disclosures:
Not Applicable.
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Information about Our Executive Officers
The following sets forth the names and ages of the Company’s executive officers as of March 12, 2026, indicating all positions held during the past five years:
Name Age Current Title
Robert G. Gleeson (a) 60 Chief Operating Officer
David W. Gose II (b) 59 Senior Vice President of Operations
James E. Marcil (d) 67 Senior Vice President of Human Resources
R. Gregory Zeh Jr. (h) 53 Senior Vice President, Chief Information Officer
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Information about Our Executive Officers: (continued)
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities:
The Company’s stock is traded on the New York Stock Exchange (ticker symbol WMK). The approximate number of shareholders, including individual participants in security position listings on March 12, 2026 was 15,765.
The following line graph compares the yearly percentage change in the cumulative total shareholder return on the Company’s common stock against the cumulative total return of the S&P Composite-500 Stock Index and the cumulative total return of a Company-selected group index that the Company deems most properly represents its “Peer Group”, for the period of five years. The Updated Peer Group is made up of five retail grocers that the Company feels most closely relate to its size and business profile, including one national grocer the Company believes to be an industry market leader. The companies making up the Updated Peer Group, in no particular order, are, Ingles Markets, Inc.; Koninklijke Ahold Delhaize N.V.; Village Super Market, Inc.; Sprouts Farmers Market, Inc. and The Kroger Company. SpartanNash Co.has been removed from the Updated Peer Group due to the acquisition of the company by C&S Wholesale Grocers in September 2025. The graph depicts $100 invested at the close of trading on the last trading day preceding the first day of the fifth preceding year in Weis Markets, Inc. common stock, S&P 500, and the Updated and Prior Peer Groups. The cumulative total return assumes reinvestment of dividends.
Comparative Five-Year Total Returns
Item 6. [Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations:
Overview
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand Weis Markets, Inc., its operations and its present business environment. The MD&A is provided as a supplement to and should be read in conjunction with the Consolidated Financial Statements and the accompanying notes thereto contained in “Item 8. Financial Statements and Supplementary Data” of this report. The following analysis should also be read in conjunction with the Financial Statements included in the Quarterly Reports on Form 10-Q and the Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission, as well as the cautionary statement captioned “Forward-Looking Statements” immediately following this analysis. This overview summarizes the MD&A, which includes the following sections:
Restatement of Previously Issued Financial Statements
The accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to the restatement of the Company’s previously reported consolidated financial statements for the years ended December 28, 2024 and December 30, 2023. As described in our Current Report on Form 8-K filed on February 20, 2026, the Audit Committee concluded that such previously issued financial statements and related previously reported unaudited consolidated financial statements for the thirteen and thirty-nine weeks ended September 27, 2025 and September 28, 2024, the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024, and the thirteen weeks ended March 29, 2025 and March 30, 2024 should no longer be relied upon. This restatement related to the Company’s overstatement of certain inventory amounts related to a single meat product manufacturing plant. The Audit Committee oversaw an investigation of this matter with the assistance of outside counsel and forensic accountants. Following the investigation, the Company determined that the overstatement resulted from the actions of a single former non-executive employee who intentionally altered inventory amounts. Company management also re-evaluated the effectiveness of the Company’s internal control over financial reporting and identified material weaknesses in the Company’s internal control over financial reporting as of December 27, 2025, described in Part II, Item 9a. “Control and Procedures” of this Form 10-K.
For additional information and a detailed discussion of the restatement, see Note 1 and Note 12 in the notes to our consolidated financial statements included in this Annual Report on Form 10-K. Restatement adjustments have also been made to the previously reported unaudited consolidated financial statements for the thirteen and thirty-nine weeks ended September 27, 2025 and September 28, 2024, the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024, and the thirteen weeks ended March 29, 2025 and March 30, 2024. For additional information related to the interim period restatements, see Note 1 and Note 12 in the notes to our consolidated financial statements included in this Annual Report on Form 10-K.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Company Overview
General
Weis Markets is a conventional supermarket chain that currently operates 202 retail stores with over 22 thousand employees located in Pennsylvania and six surrounding states: Delaware, Maryland, New Jersey, New York, Virginia, and West Virginia. Approximately 94% of Weis Markets employees are paid an hourly wage. Its products sold include groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services at certain locations, deli products, prepared foods, bakery products, beer and wine, fuel, and general merchandise items, such as health and beauty care and household products. The store product selection includes national, local and private brands and the Company promotes competitive pricing by using Everyday Lower Price; Low Price Guarantee; Low, Low Price; Weekly Hot Buys; senior and military discounts; and Loyalty programs. The Loyalty program includes reward points that may be redeemed for discounts on items in store, at one of the Company’s fuel stations or one of its third-party fuel station partners.
Utilizing its own strategically located distribution center and transportation fleet, Weis Markets self distributes approximately 52% of product supplied to stores with the remaining being supplied by direct store delivery vendors and regional wholesalers. In addition, the Company has three manufacturing facilities which process milk, water, ice, ice cream and fresh meat products. The corporate offices are located in Sunbury, Pennsylvania where the Company was founded in 1912.
The Company has provided additional product offerings and customer conveniences such as “Weis 2 Go Online,” currently offered at 195 store locations. “Weis 2 Go Online” allows the customer to order on-line and have their order delivered or picked up at an expedient store drive-thru. The Company also currently offers home delivery to customers at all 202 of its locations via multiple grocery delivery partners.
Strategic Imperatives
The following strategic imperatives continue to be focused upon by the Company to attempt to ensure the success of the Company in the coming years:
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Company Overview (continued)
Results of Operations
Two-Year StackedComparable Store Sales Analysis
Management is providing Comparable Store Sales Two-Year Stacked analysis, a non-GAAP measure, because Management believes this metric is useful to investors and analysts. Information presented in the tables below is not intended for use as an alternative to any other measure of performance. It is not recommended that this table be considered a substitute for the Company’s operating results as reported in accordance with GAAP.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Results of Operations (continued)
Year-over-year and sequential comparisons are the primary calculations used to analyze operating results, however, due to significant fluctuations caused by retail inflation and deflation in various commodities and changes in government benefits such as SNAP/EBT, Management believes it is necessary to provide a Two-Year Stacked Comparable Store Sales analysis. The following table provides the two-year stacked comparable store sales, including and excluding fuel, for the fiscal years ended December 27, 2025, and December 28, 2024, as well as fiscal years ended December 28, 2024, and December 30, 2023, respectively.
Percentage Change
Year Ended
Comparable store sales, excluding fuel (individual year) 2.1 1.9
Comparable store sales, excluding fuel (two-year stacked) 4.0
Comparable store sales (individual year) 2.0 1.7 %
Comparable store sales (two-year stacked) 3.7 %
When calculating the percentage change in comparable store sales, the Company defines a new store to be comparable after it has been in operation for five full fiscal quarters. Relocated stores and stores with expanded square footage are included in comparable store sales since these units are located in existing markets and are open during construction.
Planned store dispositions are excluded from the calculation. The Company only includes retail food stores in the calculation.
Analysis of Consolidated Statements of Income
2024 2023 Percentage Change
Gross profit margin 25.1 % 25.1 % 25.0 %
O, G & A, percent of net sales 22.8 % 22.5 % 22.2 %
Operating margin 2.3 % 2.6 % 2.8 %
Effective income tax rate 24.4 % 26.9 % 29.3 %
Net income, percent of net sales 1.9 % 2.2 % 2.1 %
Basic and diluted earnings per share $ 3.65 $ 3.94 $ 3.75 (7.4) % 5.0 %
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Results of Operations (continued)
Net Sales
Individual Year-Over-Year Analysis of Sales
Percentage Change
Net sales, excluding fuel 3.4 % 1.8 %
Net sales 3.5 1.6
Comparable store sales, excluding fuel 2.1 1.9
Comparable store sales 2.0 % 1.7 %
When calculating the percentage change in comparable store sales, the Company defines a new store to be comparable when it has been in operation after five full fiscal quarters. Relocated stores and stores with expanded square footage are included in comparable store sales since these units are located in existing markets and are open during construction. Planned store dispositions are excluded from the calculation. The Company only includes retail food stores in the calculation.
According to the latest U.S. Bureau of Labor Statistics’ report, the annual Food-at-Home Price Index increased 2.4% in 2025, 1.8% in 2024, and 5.0% in 2023. Even though the U.S. Bureau of Labor Statistics’ index rates may be reflective of a trend, it will not necessarily be indicative of the Company’s actual results. According to the U.S. Department of Energy, the 52-week average price of gasoline in the Central Atlantic States decreased 7.1%, or $0.25cents per gallon, in 2025 compared to the 52-week average in 2024. The 52-week average price of gasoline in the Central Atlantic States, according to the U.S. Department of Energy, decreased 5.1%, or $0.19 cents per gallon, in 2024 compared to the 52-week average in 2023.
Comparable store sales, excluding fuel, and comparable stores sales, including fuel, both increased for all years presented. Comparable store sales, excluding fuel, increased 2.1% and comparable store sales, including fuel, increased 2.0% for 2025 compared to 2024. On a comparable store sales basis, pharmacy services increased in sales driven by the increased number of filled prescriptions. The Company has provided additional product offerings and customer conveniences such as “Weis 2 Go Online,” currently offered at 195 store locations. “Weis 2 Go Online” allows the customer to order on-line and have their order delivered or picked up at an expedient store drive-thru. The Company also currently offers home delivery to customers in all 202 of its locations via multiple grocery delivery partners.
Although the Company experienced retail inflation and deflation in various commodities for the periods presented, the Company anticipates overall product costs to increase given the recent inflationary indicators in the food retail industry. Management cannot accurately measure the full impact of inflation or deflation on retail pricing due to changes in the types of merchandise sold between periods, shifts in customer buying patterns and the fluctuation of competitive factors. Management remains confident in its ability to generate long-term sales growth in a highly competitive environment, but also understands some competitors have greater financial resources and could use these resources to take measures which could adversely affect the Company’s competitive position.
Cost of Sales and Gross Profit
Cost of sales consists of direct product costs (net of discounts and allowances), net advertising costs, warehousing costs, transportation costs, as well as manufacturing facility costs. Increased sales volume resulted in an increase in cost of sales. Both direct product cost and distribution cost increase when sales volume increases.
Gross profit rate was 25.1% in 2025 and 2024, and 25.0% in 2023. The increase is attributable to initiatives to improve merchandise category gross profit performance.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Results of Operations (continued)
Cost of Sales and Gross Profit (continued)
The Company experienced unfavorable non-cash LIFO inventory valuation adjustments, decreasing gross profit by $302 thousand, $608 thousand and $6.7 million in 2025, 2024 and 2023, respectively.
The Company has experienced retail inflation and deflation in various commodities for the periods presented. Management cannot accurately measure the full impact of inflation or deflation on retail pricing due to changes in the types of merchandise sold between periods, shifts in customer buying patterns and the fluctuation of competitive factors.
Operating, General and Administrative Expenses
The majority of the expenses were driven by increased sales volume.
Employee-related costs such as wages, employer paid taxes, health care benefits and retirement plans, comprise approximately 58.8% of the total “Operating, general and administrative expenses.” As a percent of sales, direct store labor increased by 0.1% in 2025 compared to 2024 and increased by 0.2% in 2024 compared to 2023 due to increased wage expenses for hourly employees. Management continues to monitor store labor efficiencies and develop labor standards to reduce costs while maintaining the Company’s customer service expectations.
Depreciation and amortization expense charged to “Operating, general and administrative expenses” was $112.8 million, or 2.3% of net sales, for 2025 compared to $102.8 million, or 2.2% of net sales, for 2024 compared to $98.0 million, or 2.2% of net sales, for 2023. See the Liquidity and Capital Resources section for further information regarding the Company’s capital expenditure program.
A breakdown of the material increases (decreases) as a percent of sales in "Operating, general and administrative expenses" is as follows:
(amounts in thousands) Increase Increase (Decrease)
December 27, 2025 (Decrease) as a % of sales
Fixed expense (depreciation and amortization expense) 13,046 0.1
Employee insurance benefits expense 11,786 0.2
Outside services and repairs expense 8,185 0.0
Utilities expense 4,332 0.1
Other expenses (supplies and travel expense) 151 0.0
Operating, general, and administrative expenses as a percent of sales increased by 0.3% for the fiscal year ended December 27, 2025, compared with 2024. The increase was driven primarily by higher employee-related expenses, including increased base pay and one-time deferred compensation plan liability credit in 2024, partially offset by lower employee incentive compensation costs. Additional increases resulted from higher employee insurance benefits expense; higher outside services and repairs expense, including asset maintenance costs, technology contract costs, and share purchase transaction costs; higher fixed expenses due to increased depreciation and amortization costs associated with five new or relocated stores and twelve acquired competitor pharmacy prescription files; and higher utilities expense. These increases were partially offset by a net gain on the disposition of fixed assets related to real estate property sales, which reduced operating, general, and administrative expenses in 2025 compared with 2024.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Results of Operations (continued)
(amounts in thousands) Increase Increase (Decrease)
December 28, 2024 (Decrease) as a % of sales
Employee insurance benefits expense 4,684 0.1
Supplies expense 2,999 0.0
Operating, general, and administrative expenses as a percent of sales increased by 0.3% for the fiscal year ended December 28, 2024, compared with 2023. The increase was driven primarily by higher employee-related expense; higher employee insurance benefits expense; higher third party expense, including technology, consulting, and financial services costs; and higher supplies expense. These increases were partially offset by a net gain on the disposition of fixed assets related to real estate property sales and a one-time deferred compensation plan liability credit in 2024 in comparison to 2023.
Provision for Income Taxes
The effective income tax rate was 24.4%, 26.9% and 29.3% in 2025, 2024, and 2023, respectively. The effective income tax rate differs from the federal statutory rate of 21% primarily due to state taxes, federal and state tax credits, and nondeductible employee-related expenses. Pennsylvania House Bill 1342 made significant changes to the Commonwealth’s corporate income tax laws which included lowering the tax rate gradually from 9.99% in 2022 to 4.99% in 2031, offset by taxable income changes, inclusive of, updating market sourcing rules, and codifying the economic nexus standard. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. This legislation includes provisions that permanently extend the expiring elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation on qualifying property placed in service after January 19, 2025, and full expensing of domestic research and development expenditures. In accordance with Accounting Standards Codification ASC 740, “Income Taxes”, the Company recognized the enacted legislation effective September 27, 2025. The legislation has multiple effective dates with some provisions taking effect in 2025 and others phased in through 2027. As a result of the Company’s elections, the 2025 cash taxes decreased with no material impact to its effective tax rate.
Liquidity and Capital Resources
The primary source of cash is cash flows generated from operations. In addition, the Company has access to a revolving credit agreement entered into on September 1, 2016, and amended on September 29, 2023, with Wells Fargo Bank, N.A. (the “Credit Agreement”). The Credit Agreement matures on October 1, 2027, and provides for an unsecured revolving credit facility with an aggregate principal amount not to exceed $30.0 million with an additional discretionary amount available of $70.0 million. As of December 27, 2025, the availability under the revolving credit agreement was $19.9 million with $10.1 million of letters of credit outstanding. The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company.
On October 1, 2025, the Company divested a portion of its marketable securities portfolio to increase cash and cash equivalents liquidity to satisfy working capital obligations, selling $7.2 million in equity securities and $24.4 million in corporate and municipal bonds. As of December 27, 2025, the Company’s marketable securities portfolio totaled $97.1 million consisting of high-grade corporate and municipal bonds with maturity dates between one and 30 years, commercial paper, and no equity securities. Management anticipates maintaining the investment portfolio but has the ability to liquidate if needed. See “Item 7a. Quantitative and Qualitative Disclosures about Market Risk” for more details regarding the Company’s market risk.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Results of Operations (continued)
The Company’s capital expenditure program includes the construction of new stores, the expansion and remodeling of existing units, the acquisition of sites for future expansion, new technology purchases and the continued upgrade of the Company’s distribution facilities and transportation fleet. In 2025, the Company acquired one store in Pennsylvania and opened three new stores in Maryland and one new store in Delaware.The Company continues to reinvest and anticipates to fund the long-term capital expenditure program, the acquisition of retail stores, the construction of additional distribution facilities, repurchases of common stock, and cash dividends on common stock through its cash and cash equivalents, marketable securities, cash flows from operating activities, and the revolving Credit Agreement. The Company has no other commitment of capital resources as of December 27, 2025, other than the lease commitments on its store facilities and transportation equipment under operating leases that expire at various dates through 2038.
The Board of Directors’ 2004 resolution authorizing the repurchase of up to one million shares of the Company’s common stock has a remaining balance of 752,468 shares, and no repurchases were made during the year ended December 27, 2025.
Quarterly Cash Dividends
Total cash dividend payments on common stock, on a per share basis, amounted to $1.36 in 2025, 2024 and 2023. The Company expects to continue paying regular cash dividends on a quarterly basis. However, the Board of Directors reconsiders the declaration of dividends quarterly. The Company pays these dividends at the discretion of the Board of Directors and the continuation of these payments and the amount of the dividends depends upon the financial condition of the Company, results of operations and other factors which the Board of Directors deems relevant.
Cash Flow Information
(amounts in thousands)
Net cash provided by (used in):
Operating
Cash flows from operating activities increased in 2025 as compared to 2024 and 2023. The increase in 2025 from 2024 is due to a decrease in current income taxes as a result of the impacts of the OBBBA and the decrease in 2024 from 2023 is due to increased value of inventory on hand due to timing of New Year’s selling period.
Investing
Property and equipment purchases totaled $205.2 million in 2025, $168.5 million in 2024 and $104.0 million in 2023. As a percentage of sales, capital expenditures totaled 4.2%in 2025, 3.5% in 2024 and 2.2% in 2023. In 2025, the Company purchased one new location and opened four new stores. The Company also completed a business acquisition in 2024, for which cash consideration totaled $16.2 million. The Company decreased its marketable securities holdings in 2025 by $94.9million to partially fund the share purchase transaction referenced in Note 13 and decreased its marketable securities holdings in 2024 by $34.0 million to fund the increase in capital expenditures and increased its marketable securities holdings in 2023 by approximately $39.5 million.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Results of Operations (continued)
Financing
Net cash used in financing activities in 2025 was $175.1 million compared to $36.6 million in 2024. The Company purchased 2,153,846 shares of common stock from the trustees of The Patricia R. Weis Marital Trust and The Patricia G. Ross Weis Revocable Trust at $65.00 per share on June 6, 2025 for an aggregate purchase price of $140.0 million dollars, as further described in Note 13.
The Company paid dividends of $35.1 million in 2025, $36.6 million in 2024 and $36.6 million in 2023.
Contractual Obligations
The following table represents scheduled maturities of the Company’s long-term contractual obligations as of December 27, 2025.
Payments due by period
Less than More than
Off-Balance Sheet Arrangements
The Company is not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, results of operations or cash flows.
Critical Accounting Policies and Estimates
The Company has chosen accounting policies that it believes are appropriate to accurately and fairly report its operating results and financial position, and the Company applies those accounting policies in a consistent manner. The Significant Accounting Policies are summarized in Note 1 to the Consolidated Financial Statements.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires that the Company makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The Company evaluates these estimates and assumptions on an ongoing basis and may retain outside consultants, lawyers and actuaries to assist in its evaluation. The Company believes the following accounting policies are the most critical because they involve the most significant judgments and estimates used in preparation of its Consolidated Financial Statements.
Inventories
Inventories are valued at the lower of cost or net realizable value, using both the retail inventory and average cost methods. The retail inventory method is commonly used by retail companies to determine cost and calculate gross margin based on applying a cost-to-retail ratio to each similar merchandise category’s ending retail value. The Company’s center store and pharmacy inventories are valued using last in, first out (LIFO). The Company’s fresh inventories are valued using average cost. The Company evaluates inventory shortages throughout the year based on actual physical counts in its facilities. Allowances for inventory shortages are recorded based on the results of these counts and to provide for estimated shortages from the last physical count to the financial statement date.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Critical Accounting Policies and Estimates (continued)
Vendor Allowances
Vendor allowances related to the Company’s buying and merchandising activities are recorded as a reduction of cost of sales as they are earned, in accordance with the underlying agreement. Off-invoice and bill-back allowances are used to reduce direct product costs upon the receipt of goods. Promotional rebates and credits are accounted for as a reduction in the cost of inventory and recognized when the related inventory is sold. Volume incentive discounts are accounted for as a reduction of cost of sales and realized using estimated amounts at the time it is deemed probable that the incentive target will be reached. Long-term contract incentives, which require an exclusive vendor relationship, are allocated over the life of the contract. Promotional allowance funds for specific vendor-sponsored programs are recognized as a reduction of cost of sales as the program occurs and the funds are earned per the agreement. Cash discounts for prompt payment of invoices are realized in cost of sales as invoices are paid. Warehouse and back-haul allowances provided by
suppliers for distributing their product through the Company’s distribution system are recorded in cost of sales as the required performance is completed. Warehouse slotting allowances are recorded in cost of sales when new items are initially set up in the Company’s distribution system, which is when the related expenses are incurred and performance under the agreement is complete. Swell allowances for damaged goods are realized in cost of sales as provided by the supplier, helping to offset product shrink losses also recorded in cost of sales.
Income Taxes
Income taxes are inherently complex and require Management’s evaluation and estimates, specifically regarding current and deferred income taxes and uncertain tax positions. The Company reviews the tax positions taken, or expected to be taken, on tax returns to determine whether, and to what extent, a benefit can be recognized in its Consolidated Financial Statements. The assessment of the Company’s tax position relies on the judgment of Management to estimate the more likely than not merits associated with the Company’s various tax positions.
Leases
The Company leases approximately 47% of its open store facilities under operating leases that expire at various dates through 2038, with the remaining store facilities being owned. These leases generally provide for fixed annual rentals; however, several provide for minimum annual rentals plus variable lease costs related to real estate taxes and insurance as well as contingent rentals based on a percentage of annual sales or increases periodically based on inflation. These variable lease costs are not included in the measurement of the operating lease right-to-use assets or lease liabilities and are charged to the related expense category included in “Operating, general and administrative expenses.” Most of the leases contain multiple renewal options, under which the Company may extend the lease terms from 2 to 20 years. Additionally, the Company has operating leases for certain transportation and other equipment. The Company leases or subleases space to tenants in owned, vacated and open store facilities. Rental income is recorded when earned as a component of “Operating, general and administrative expenses.”
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)
Critical Accounting Policies and Estimates (continued)
Self-Insurance
The Company is self-insured for a majority of its workers’ compensation, general liability, vehicle accident and employee medical benefit claims. The self-insurance liability for most of the medical benefit claims is determined based on historical data and an estimate of claims incurred but not reported. The other self-insurance liabilities including workers’ compensation are determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. The Company is self-insured for certain healthcare claims and stop-loss coverage is maintained for individual annual claim occurrences exceeding a $600 thousand deductible with a specific aggregating deductible of $700 thousand. The Company administers a self-insured commercial general liability program with a retention of $1.0 million per claim. The Company also manages self-insured workers’ compensation programs in Pennsylvania and Maryland, each with a $2.0 million retention per claim. In all other jurisdictions, including Delaware, New Jersey, New York, Virginia, and West Virginia, workers’ compensation coverage is maintained with a $1.0 million deductible per claim. Property and casualty insurance is placed with multiple carriers on either a per claim or per occurrence basis, with deductibles and retention levels varying by coverage, ranging from $0 to $2.0 million. Significant assumptions used in the development of the actuarial estimates include reliance on the Company’s historical claims data including average monthly claims and average lag time between incurrence and reporting of the claim.
Forward-Looking Statements
In addition to historical information, this Annual Report may contain forward-looking statements, which are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. For example, risks and uncertainties can arise with changes in: general economic conditions, including their impact on capital expenditures; tariffs and trade policies; business conditions and trends in the retail industry; the regulatory environment; rapidly changing technology, including cybersecurity and data privacy risks, and competitive factors, including increased competition with regional and national retailers; price pressures; further expenditures related to restatement of our financial statement; and the results of any shareholder actions associated with the restatements. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect Management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files periodically with the Securities and Exchange Commission.
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Item 7a. Quantitative and Qualitative Disclosures about Market Risk:
(dollars in thousands) Expected Maturity Dates Fair Value
Rate sensitive assets:
Other Relevant Market Risks
On October 1, 2025, the Company divested a portion of its marketable securities portfolio to increase cash and cash equivalents liquidity to satisfy working capital obligations, selling $7.2 million in equity securities and $24.4 million in corporate and municipal bonds. As of December 27, 2025, the Company held no equity securities and the marketable securities portfolio consisting of high-grade corporate and municipal bonds and commercial paper totaled $97.1 million. Prior to the sale, the dividend yield realized on the equity investments was 3.2% in 2025. By their nature, both the fixed interest rate securities and the equity investments inherently expose the holders to market risk. The extent of the Company’s interest rate and other market risk is not quantifiable or predictable with precision due to the variability of future interest rates and other changes in market conditions. However, the Company believes that its exposure in this area is not material.
The Company’s revolving credit agreement is exposed to interest rate fluctuations to the extent of changes in the SOFR rate. The Company believes this exposure is not material due to availability of liquid assets to eliminate the outstanding credit facility.
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Item 8. Financial Statements and Supplementary Data:
WEIS MARKETS, INC.
CONSOLIDATED BALANCE SHEETS
Assets
Current:
Income taxes recoverable 6,624 —
Prepaid expenses and other current assets 44,090 40,980
Intangible and other assets, net 25,418 24,066
Liabilities
Current:
Income taxes payable — 2,724
Postretirement benefit obligations 33,391 31,123
Shareholders’ Equity
See accompanying notes to Consolidated Financial Statements.As of December 28, 2024, the number of shares outstanding was 26,898,443 and the number of shares of treasury stock was 6,149,364.
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CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except shares and per share amounts) 2024 2023
Investment income (loss) and interest expense 14,697 21,970 13,162
Cash dividends per share $ 1.36 $ 1.36 $ 1.36
Basic and diluted earnings per share $ 3.65 $ 3.94 $ 3.75
See accompanying notes to Consolidated Financial Statements. The weighted average shares reflects the change in the number of shares outstanding after the purchase of 2,153,846 shares on June 6, 2025 referenced in Note 13.
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WEIS MARKETS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(amounts in thousands) 2024 2023
Other comprehensive income (loss) by component, net of tax:
Available-for-sale marketable securities
Other comprehensive income (loss), net of tax 1,103 (1,666) 5,255
See accompanying notes to Consolidated Financial Statements.
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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Accumulated
(amounts in thousands, except shares) Other Total
Net income (As restated) — — 100,854 — — — 100,854
Dividends paid — — (36,582) — — — (36,582)
Net income (As restated) — — 106,024 — — — 106,024
Dividends paid — — (36,582) — — — (36,582)
Net income — — 93,691 — — — 93,691
Dividends paid — — (35,117) — — — (35,117)
See accompanying notes to Consolidated Financial Statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
52 Weeks Ended 52 Weeks Ended
(amounts in thousands) December 27, 2025 (As restated) (As restated)
Cash flows from operating activities:
Adjustments to reconcile net income to
net cash provided by operating activities:
(Gain) loss on disposition of fixed assets (7,840) (4,447) (46)
(Gain) loss on equity securities (1,313) (1,020) 275
Unrealized (gain) loss in SERP (2,144) (2,987) (2,834)
Changes in operating assets and liabilities:
Accounts receivable and prepaid expenses (16,959) (23,347) (18,564)
Cash flows from investing activities:
Proceeds from the sale of property and equipment 10,109 6,507 867
Acquisition of business (7,447) (16,225) —
Purchase of intangible assets (1,523) (4,251) (1,075)
Change in SERP investment (124) (1,485) (1,120)
Cash flows from financing activities:
Share purchase (140,000) — —
See accompanying notes to Consolidated Financial Statements. Cash paid for income taxes was $20.8 million, $43.1 million, $43.8million in 2025, 2024 and 2023, respectively. Cash paid for interest related to long-term debt was $43 thousand, $45 thousand, $41 thousand in 2025, 2024 and 2023, respectively.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Summary of Significant Accounting Policies
The following is a summary of the significant accounting policies utilized in preparing the Company’s Consolidated Financial Statements:
(a) Description of Business
Weis Markets, Inc. is a Pennsylvania business corporation founded in 1912 and incorporated in 1924. The Company is engaged principally in the retail sale of food in Pennsylvania and surrounding states. The Company’s operations are reported as a single reportable segment. There was no material change in the nature of the Company’s business during fiscal 2025.
(b) Definition of Fiscal Year
The Company’s fiscal year ends on the last Saturday in December. Fiscal 2025 was comprised of 52 weeks, ending on December 27, 2025. Fiscal 2024 was comprised of 52 weeks, ending on December 28, 2024. Fiscal 2023 was comprised of 52 weeks, ending on December 30, 2023. References to years in this Annual Report relate to fiscal years.
(c) Principles of Consolidation
The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
(d) Use of Estimates
Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.
(e) Cash and Cash Equivalents
The Company maintains its cash balances in the form of core checking accounts and money market accounts. The Company maintains cash deposits with banks that at times exceed applicable insurance limits. The Company reduces its exposure to credit risk by maintaining such deposits with high quality financial institutions that Management believes are creditworthy.
The Company considers investments with an original maturity of three months or less to be cash equivalents. Investment amounts classified as cash equivalents as of December 27, 2025, and December 28, 2024, totaled $49.0million and $129.7 million, respectively.
Consumer electronic payments accepted at the point of sale, including all credit card, debit card and electronic benefits transfer transactions that process in three days or less are classified as cash equivalents. Consumer electronic payment amounts classified as cash equivalents as of December 27, 2025, and December 28, 2024, totaled $41.5million and $31.6 million, respectively.
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Note 1 Summary of Significant Accounting Policies (continued)
(f) Marketable Securities
Marketable securities consist of corporate and municipal bonds, commercial paper and equity securities. The Company invests primarily in high-grade marketable debt securities. The Company classifies all of its marketable securities as available-for-sale.
Available-for-sale securities are recorded at fair value as determined by quoted market price based on national markets. To determine fair value the Company utilizes standard pricing procedures of its investment advisory firm(s), which include various third-party pricing services. If the cost of an investment exceeds its fair value, the Company evaluates general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. Unrealized holding gains and losses, net of the related tax effect, on corporate and municipal bonds and commercial paper are excluded from earnings and are reported as a separate component of shareholders’ equity until realized. Unrealized holding gains and losses on equity securities are recorded in investment income (loss) and interest expense. Dividend and interest income is recognized when earned. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of securities.
Investment amounts classified as marketable securities as of December 27, 2025, and December 28, 2024, totaled $97.1 million and $192.0 million, respectively.
Equity securities are measured at fair value and the unrealized holding gains and losses are recorded in investment income (loss) and interest expense. The Company recognized a $1.3 million gainin 2025 and a $1.0 million gain in 2024.
See additional disclosures regarding marketable securities in Note 2 and Note 14.
(g) Accounts Receivable
Accounts receivable are stated net of an allowance for uncollectible accounts of $3.2 million and $3.4 million as of December 27, 2025, and December 28, 2024, respectively. The reserve balance relates to amounts due from pharmacy third party providers, retail customer returned checks, manufacturing customers, vendors and tenants. The Company maintains an allowance for the amount of receivables deemed to be uncollectible and calculates this amount based upon historical collection activity adjusted for current conditions. Accounts receivable as of December 31, 2023 amounted to $65.1 million.
(h) Inventories
Inventories are valued at the lower of cost or net realizable value, using both the retail inventory and average cost methods. The retail inventory method is commonly used by retail companies to determine cost and calculate gross margin based on applying a cost-to-retail ratio to each similar merchandise category’s ending retail value. The Company’s center store and pharmacy inventories are valued using last in, first out (LIFO). The Company’s fresh inventories are valued using average cost. The Company evaluates inventory shortages throughout the year based on actual physical counts in its facilities. Allowances for inventory shortages are recorded based on the results of these counts and to provide for estimated shortages from the last physical count to the financial statement date.
(i) Property and Equipment
Property and equipment are recorded at cost. Depreciation is provided on the cost of buildings and improvements and equipment using the straight-line method.
Leasehold improvements are amortized using the straight-line method over the terms of the leases or the useful lives of the assets, whichever is shorter.
Maintenance and repairs are expensed and renewals and betterments are capitalized. When assets are retired or otherwise disposed of, the assets and accumulated depreciation are removed from the respective accounts and any profit or loss on the disposition is credited or charged to “Operating, general and administrative expenses.”
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Note 1 Summary of Significant Accounting Policies (continued)
(j) Leases
The Company leases approximately 47% of its open store facilities under operating leases that expire at various dates through 2038, with the remaining store facilities being owned. These leases generally provide for fixed annual rentals; however, several provide for minimum annual rentals plus variable lease costs related to real estate taxes and insurance as well as contingent rentals based on a percentage of annual sales or increases periodically based on inflation. These variable lease costs are not included in the measurement of the operating lease right-to-use assets or lease liabilities and are charged to the related expense category included in “Operating, general and administrative expenses.” Most of the leases contain multiple renewal options, under which the Company may extend the lease terms from 2 to 20 years. Additionally, the Company has operating leases for certain transportation and other equipment. The Company leases or subleases space to tenants in owned, vacated and open store facilities. Rental income is recorded when earned as a component of “Operating, general and administrative expenses.”
(k) Goodwill and Intangible Assets
Goodwill is not amortized but tested for impairment on an annual basis and between annual tests when indicators of impairment are identified. Intangible assets with an indefinite useful life are not amortized until their useful life is determined to be no longer indefinite and are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.
In 2025, the Company increased goodwill by $4.4million from the acquisition of a Saylor’s Market store, increasing goodwill to $65.7 million in 2025 from $61.3 million in 2024. In 2024, the Company increased goodwill by $8.9 million from the acquisition of two Sunnyway Food stores, increasing goodwill to $61.3 million from $52.3 million in 2023.
The Company’s intangible assets and related accumulated amortization at December 27, 2025, and December 28, 2024, consisted of the following:
December 27, 2025 December 28, 2024
Accumulated Accumulated
Intangible assets with a definite useful life are generally amortized on a straight-line basis over periods up to 10 years for customer lists and 3 years for software. Estimated amortization expense for the next five fiscal years is approximately $1.6 million in 2026, $1.5 million in 2027, $327 thousand in 2028, $289 thousand in 2029 and $289 thousand in 2030. As of December 27, 2025, the Company’s intangible assets with indefinite lives consisted of goodwill and liquor licenses.
(l) Impairment of Long-Lived Assets
The Company periodically evaluates the period of depreciation or amortization for long-lived assets to determine whether current circumstances warrant revised estimates of useful lives. The Company completes an impairment test annually. The Company also reviews its property and equipment for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount to the net undiscounted cash flows expected to be generated by the asset. An impairment loss would be recorded for the excess of net book value over the fair value of the asset impaired. The fair value is estimated based on current market values or expected discounted future cash flows.
With respect to owned property and equipment associated with closed stores, the value of the property and equipment would be adjusted to reflect recoverable values if current economic conditions and estimated fair values of the property was less than the net book value.
The results of impairment tests are subject to Management’s estimates and assumptions of projected cash flows and operating results. The Company believes that, based on current conditions, materially different reported results are not likely to result from long-lived asset impairments. However, a change in assumptions or market conditions could result in a change in estimated future cash flows and the likelihood of materially different reported results.
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Note 1 Summary of Significant Accounting Policies (continued)
(m) Self-Insurance
The Company is self-insured for a majority of its workers’ compensation, general liability, vehicle accident and employee medical benefit claims. The self-insurance liability for most of the medical benefit claims is determined based on historical data and an estimate of claims incurred but not reported. The other self-insurance liabilities including workers’ compensation are determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. The Company is self-insured for certain healthcare claims and stop-loss coverage is maintained for individual annual claim occurrences exceeding a $600 thousand deductible with a specific aggregating deductible of $700 thousand. The Company administers a self-insured commercial general liability program with a retention of $1.0 million per claim. The Company also manages self-insured workers’ compensation programs in Pennsylvania and Maryland, each with a $2.0 million retention per claim. In all other jurisdictions, including Delaware, New Jersey, New York, Virginia, and West Virginia workers’ compensation coverage is maintained with a $1.0 million deductible per claim. Property and casualty insurance is placed with multiple carriers on either a per claim or per occurrence basis, with deductibles and retention levels varying by coverage, ranging from $0 to $2.0 million. Significant assumptions used in the development of the actuarial estimates include reliance on the Company’s historical claims data including average monthly claims and average lag time between incurrence and reporting of the claim.
(n) Income Taxes
The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company reviews the tax positions taken or expected to be taken on tax returns to determine whether and to what extent a benefit can be recognized in the Consolidated Financial Statements. Refer to Note 10 to the Consolidated Financial Statements for the amount of unrecognized tax benefits and other disclosures related to uncertain tax positions. To the extent interest and penalties would be assessed by taxing authorities on any underpayment of income tax, such amounts are accrued and classified as a component of income tax expense.
(o) Earnings Per Share
Earnings per share are based on the weighted-average number of common shares outstanding.
(p) Revenue Recognition
Revenue from the sale of products to the Company’s customers is recognized at the point of sale. Discounts provided to customers at the point of sale through the Weis Club Preferred Shopper loyalty program are recognized as a reduction in sales as products are sold. Periodically, the Company will run a point-based sales incentive program that rewards customers with future sales discounts. The Company makes reasonable and reliable estimates of the amount of future discounts based upon historical experience and its customer data tracking software. Sales are reduced rationally and systematically by these estimates over the life of the program. Discounts to customers at the point of sale provided by vendors, usually in the form of paper coupons, are not recognized as a reduction in sales provided the discounts are redeemable at any retailer that accepts those discounts. The Company records “Deferred revenue” for the sale of gift cards and revenue is recognized in “Net sales” at the time of customer redemption for products. Gift card breakage income is recognized in “Operating, general and administrative expenses” based upon historical redemption patterns and represents the balance of gift cards for which the Company believes the likelihood of redemption by the customer is remote. Gift card breakage income is not material for the periods presented. Sales tax is excluded from “Net sales.” The Company charges sales tax on all taxable customer purchases and remits these taxes monthly to the appropriate taxing jurisdiction. Merchandise return activity is immaterial to revenues due to products being returned quickly and the relatively low unit cost. The Company provides a variety of services to its customers, including but not limited to lottery, money orders, third-party gift cards, and third-party bill pay services. Commission income earned from these services are recorded when earned as a component of “Other revenue.” The Company recorded commission income of $18.3 million in 2025, $17.9 million in 2024, $17.6 million in 2023.
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Note 1 Summary of Significant Accounting Policies (continued)
(q) Cost of Sales, Including Advertising, Warehousing and Distribution Expenses
“Cost of sales, including advertising, warehousing and distribution expenses” consists of direct product costs (net of discounts and allowances), advertising (net of vendor paid cooperative advertising credits), distribution center and transportation costs, as well as manufacturing facility operations. Advertising costs, net of vendor paid cooperative advertising credits, are expensed as incurred which are primarily funded by vendor cooperative advertising credits and occur in the same period as the product is sold.
(r) Vendor Allowances
Vendor allowances related to the Company’s buying and merchandising activities are recorded as a reduction of cost of sales as they are earned, in accordance with the underlying agreement. Off-invoice and bill-back allowances are used to reduce direct product costs upon the receipt of goods. Promotional rebates and credits are accounted for as a reduction in the cost of inventory and recognized when the related inventory is sold. Volume incentive discounts are accounted for as a reduction of cost of sales and realized using estimated amounts at the time it is deemed probable that the incentive target will be reached. Long-term contract incentives, which require an exclusive vendor relationship, are allocated over the life of the contract. Promotional allowance funds for specific vendor-sponsored programs are recognized as a reduction of cost of sales as the program occurs and the funds are earned per the agreement. Cash discounts for prompt payment of invoices are realized in cost of sales as invoices are paid. Warehouse and back-haul allowances provided by suppliers for distributing their product through the Company’s distribution system are recorded in cost of sales offsetting costs incurred. Warehouse slotting allowances are recorded in cost of sales when new items are initially set up in the Company’s distribution system, which is when the related expenses are incurred and performance under the agreement is complete. Swell allowances for damaged goods are realized in cost of sales as provided by the supplier, helping to offset product shrink losses also recorded in cost of sales.