WEIS MARKETS INC (WMK)
SIC breadcrumb: Retail Trade > SIC Major Group 54 > SIC 5411 Retail-Grocery Stores
SEC company page: https://www.sec.gov/edgar/browse/?CIK=105418. Latest filing source: 0000105418-26-000024.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 4,957,709,000 | USD | 2025 | 2026-03-12 |
| Net income | 93,691,000 | USD | 2025 | 2026-03-12 |
| Assets | 2,027,359,000 | USD | 2025 | 2026-03-12 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000105418.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2009 | 2010 | 2011 | 2012 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 3,136,720,000 | 3,466,807,000 | 3,509,270,000 | 3,543,299,000 | 4,112,601,000 | 4,224,417,000 | 4,713,986,000 | 4,714,573,000 | 4,791,730,000 | 4,957,709,000 | ||||
| Net income | 87,162,000 | 98,414,000 | 62,738,000 | 67,983,000 | 118,917,000 | 108,849,000 | 125,196,000 | 100,854,000 | 106,024,000 | 93,691,000 | ||||
| Operating income | 98,325,000 | 78,519,000 | 82,671,000 | 84,639,000 | 163,178,000 | 146,711,000 | 157,052,000 | 133,141,000 | 126,386,000 | 113,653,000 | ||||
| Gross profit | 863,538,000 | 912,523,000 | 935,001,000 | 938,194,000 | 1,100,434,000 | 1,115,707,000 | 1,199,957,000 | 1,175,519,000 | 1,198,750,000 | 1,239,863,000 | ||||
| Diluted EPS | 2.53 | 4.42 | 4.05 | 4.65 | 3.75 | 3.94 | 3.65 | |||||||
| Operating cash flow | 149,076,000 | 159,147,000 | 150,263,000 | 171,686,000 | 277,990,000 | 227,709,000 | 218,024,000 | 201,602,000 | 187,467,000 | 207,206,000 | ||||
| Capital expenditures | 142,144,000 | 95,857,000 | 95,696,000 | 101,456,000 | 130,991,000 | 151,800,000 | 122,169,000 | 104,010,000 | 161,349,000 | 202,381,000 | ||||
| Dividends paid | 32,278,000 | 32,278,000 | 32,546,000 | 33,354,000 | 33,354,000 | 33,623,000 | 34,968,000 | 36,582,000 | 36,582,000 | 35,117,000 | ||||
| Share buybacks | 1,973,000 | 2,000 | 0.00 | 0.00 | 140,000,000 | |||||||||
| Assets | 1,431,304,000 | 1,441,739,000 | 1,432,011,000 | 1,675,562,000 | 1,820,421,000 | 1,910,475,000 | 1,951,668,000 | 2,028,105,000 | 2,090,582,000 | 2,027,359,000 | ||||
| Liabilities | 504,582,000 | 448,895,000 | 409,112,000 | 616,817,000 | 674,306,000 | 690,733,000 | 655,336,000 | 662,245,000 | 656,946,000 | 675,449,000 | ||||
| Stockholders' equity | 926,722,000 | 992,844,000 | 1,022,899,000 | 1,058,745,000 | 1,146,115,000 | 1,219,742,000 | 1,296,332,000 | 1,365,861,000 | 1,433,635,000 | 1,351,910,000 | ||||
| Cash and cash equivalents | 46,818,000 | 47,917,000 | 37,808,000 | 66,871,000 | 136,612,000 | 86,048,000 | 157,997,000 | 184,217,000 | 190,323,000 | 117,091,000 | ||||
| Free cash flow | 6,932,000 | 63,290,000 | 54,567,000 | 70,230,000 | 146,999,000 | 75,909,000 | 95,855,000 | 97,592,000 | 26,118,000 | 4,825,000 |
Ratios
| Metric | 2009 | 2010 | 2011 | 2012 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 2.78% | 2.84% | 1.79% | 1.92% | 2.89% | 2.58% | 2.66% | 2.14% | 2.21% | 1.89% | ||||
| Operating margin | 3.13% | 2.26% | 2.36% | 2.39% | 3.97% | 3.47% | 3.33% | 2.82% | 2.64% | 2.29% | ||||
| Return on equity | 9.41% | 9.91% | 6.13% | 6.42% | 10.38% | 8.92% | 9.66% | 7.38% | 7.40% | 6.93% | ||||
| Return on assets | 6.09% | 6.83% | 4.38% | 4.06% | 6.53% | 5.70% | 6.41% | 4.97% | 5.07% | 4.62% | ||||
| Liabilities / equity | 0.54 | 0.45 | 0.40 | 0.58 | 0.59 | 0.57 | 0.51 | 0.48 | 0.46 | 0.50 | ||||
| Current ratio | 1.75 | 1.76 | 1.76 | 1.74 | 1.81 | 1.95 | 2.12 | 2.41 | 2.41 | 1.93 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000105418.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-25 | 1.35 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-24 | 1.07 | reported discrete quarter | ||
| 2023-Q1 | 2023-04-01 | 0.96 | reported discrete quarter | ||
| 2023-Q2 | 2023-07-01 | 1,178,695,000 | 34,265,000 | 1.27 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 1,160,306,000 | 23,226,000 | 0.86 | reported discrete quarter |
| 2023-Q4 | 2023-12-30 | 1,212,975,000 | 20,523,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-30 | 1,178,168,000 | 23,165,000 | 0.86 | reported discrete quarter |
| 2024-Q2 | 2024-06-29 | 1,181,456,000 | 26,259,000 | 0.98 | reported discrete quarter |
| 2024-Q3 | 2024-09-28 | 1,186,232,000 | 25,840,000 | 0.96 | reported discrete quarter |
| 2024-Q4 | 2024-12-28 | 1,245,128,000 | 34,678,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-29 | 1,200,776,000 | 20,478,000 | 0.76 | reported discrete quarter |
| 2025-Q2 | 2025-06-28 | 1,218,796,000 | 26,526,000 | 1.01 | reported discrete quarter |
| 2025-Q3 | 2025-09-27 | 1,242,307,000 | 18,233,000 | 0.74 | reported discrete quarter |
| 2025-Q4 | 2025-12-27 | 1,295,830,000 | 28,454,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-28 | 1,255,912,000 | 27,853,000 | 1.13 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0000105418-26-000043.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of Weis Markets, Inc.’s (the “Company”) financial condition and results of operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q, the Company’s audited Consolidated Financial Statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 27, 2025, filed with the U.S. Securities and Exchange Commission, as well as the cautionary statement captioned "Forward-Looking Statements" immediately following this analysis. Company Summary Weis Markets is a conventional supermarket chain that currently operates 201 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 Low, Low Prices; Price Locks; Weekly Hot Buys; senior and military discounts; and Loyalty Rewards program. The Loyalty Rewards 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 51% of products 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, PA 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 201 of its locations via multiple grocery delivery partners. Two-Year Stacked Comparable 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. A Comparable Store Sales Two-Year Stacked analysis presents a comparison of results and trends over a longer period of time to demonstrate the effect of fluctuating economic activity on the operating results of the Company. 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. Year-over-year and sequential comparisons are the primary calculations used to analyze operating results, however, due to fluctuations caused by declining government benefits, pharmacy sales growth, and inflationary trends in the food retail industry, management believes it is necessary to provide a Two-Year Stacked Comparable Store Sales analysis. The following tables provide the two-year stacked comparable store sales, including and excluding fuel, for the periods ended March 28, 2026, and March 29, 2025, as well as periods ended March 29, 2025, and March 30, 2024, respectively. Comparable store sales increased 2.1 percent on an individual year-over-year basis and increased 3.0 percent on a two-year stacked basis for the thirteen weeks ended March 28, 2026. 11 Table of Contents WEIS MARKETS, INC. ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Percentage Change 13 Weeks Ended March 28, 2026 2026 vs. 2025 2025 vs. 2024 Comparable store sales, excluding fuel (individual year) 1.2 % 1.0 % Comparable store sales, excluding fuel (two-year stacked) 2.2 Comparable store sales (individual year) 2.1 0.9 % Comparable store sales (two-year stacked) 3.0 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. Results of Operations Analysis of Consolidated Statements of Income Percentage Change 13 Weeks Ended 13 Weeks Ended (amounts in thousands, except per share amounts) March 28, 2026 March 29, 2025 2026 vs. 2025 Net sales $ 1,251,718 $ 1,196,805 4.6 % Other revenue 4,194 3,971 5.6 Total revenue 1,255,912 1,200,776 4.6 Cost of sales, including advertising, warehousing and distribution expenses 925,665 902,538 2.6 Gross profit on sales 330,247 298,238 10.7 Gross profit margin 26.4 % 24.9 % Operating, general and administrative expenses 294,545 276,466 6.5 O, G & A, percent of net sales 23.5 % 23.1 % Income from operations 35,702 21,772 64.0 Operating margin 2.9 % 1.8 % Investment income (loss) and interest expense 462 4,411 (89.5) Investment income (loss) and interest expense, percent of net sales 0.0 % 0.4 % Other income (expense) 1,212 357 239.5 Other income (expense), percent of net sales 0.1 % 0.0 % Income before provision for income taxes 37,376 26,540 40.8 Income before provision for income taxes, percent of net sales 3.0 % 2.2 % Provision for income taxes 9,523 6,991 36.2 Effective income tax rate 25.5 % 26.3 % Net income $ 27,853 $ 19,549 42.5 % Net income, percent of net sales 2.2 % 1.6 % Basic and diluted earnings per share $ 1.13 $ 0.73 54.8 % 12 Table of Contents WEIS MARKETS, INC. ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Net Sales Individual Year-Over-Year Analysis of Sales Percentage Change 2026 vs. 2025 March 28, 2026 13 Weeks Ended Net sales, excluding fuel 3.5 % Net sales 4.6 Comparable store sales, excluding fuel (individual year) 1.2 Comparable store sales (individual year) 2.1 % 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. According to the latest U.S. Bureau of Labor Statistics’ report, the Seasonally Adjusted Food-at-Home Consumer Price Index increased 0.5% and 1.0% for the thirteen week periods ended March 28, 2026 and March 29, 2025, respectively. According to the U.S. Department of Energy, the average price of gasoline in the Central Atlantic States decreased 2.0% or $0.07 per gallon in the thirteen weeks ended March 28, 2026, compared to the same period in 2025. Although the U.S. Bureau of Labor Statistics’ and the U.S. Department of Energy indices may be reflective of broader trends, they will not necessarily be indicative of the Company’s actual results. Total net sales increased 4.6% to $1.3 billion for the thirteen weeks ended March 28, 2026, from $1.2 billion for the thirteen weeks ended March 29, 2025. The increase in total net sales includes retail price inflation in grocery, pharmacy and fresh product categories. Comparable store sales for the thirteen weeks ended March 28, 2026, compared to the same period in 2025 increased 2.1% including fuel and 1.2% excluding fuel. 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 vendor discounts and allowances), net advertising costs, distribution center and transportation costs, as well as manufacturing facility operations. Gross profit on sales increased 10.7% for the thirteen weeks ended March 28, 2026, compared to the same period in 2025. Gross profit margin increased 1.5% for the thirteen weeks ended March 28, 2026 when compared to the same period in 2025. Non-cash LIFO inventory valuation adjustments represent expense of $282 thousand in the first thirteen weeks of 2026 compared to income of $77 thousand in the same period in 2025. Although the Company experienced cost inflation and deflation in various commodities for the periods presented, the Company anticipates overall product costs to increase given the recent inflationary trends in the food retail industry. 13 Table of Contents WEIS MARKETS, INC. ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Operating, General and Administrative Expenses The majority of the operating, general and administrative expenses are driven by sales volume. Employee expenses such as wages, employer paid taxes, health care benefits and retirement plans, comprise approximately 58.3% of the total “Operating, general and administrative expenses.” As a percent of sales, direct store labor increased 0.1% in the thirteen week period ended March 28, 2026 when compared to the same period in 2025. Depreciation and amortization expense charged to “Operating, general and administrative expenses” was $28.5 million, or 2.3% of net sales during the thirteen weeks ended March 28, 2026 compared to $26.7 million, or 2.2% of net sales during the thirteen weeks ended March 29, 2025. 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: 13 Weeks Ended (amou [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
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: ● Company Overview - a general description of the Company’s business and strategic imperatives. ● Results of Operations - an analysis of the Company’s consolidated results of operations for the three years presented in the Company’s Consolidated Financial Statements. ● Liquidity and Capital Resources - an analysis of cash flows, aggregate contractual obligations, and off-balance sheet arrangements. ● Critical Accounting Policies and Estimates - a discussion of accounting policies that require critical judgments and estimates. 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. 13 Table of Contents WEIS MARKETS, INC. 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: ● Establish a Sales Driven Culture – The Company continues to focus on sales and profits growth, improved operating practices, increased productivity and positive cash flow. The Company believes disciplined growth will increase its market share and operating profits, resulting in enhanced shareholder value. The Company’s method of driving sales includes focused preparation and execution of sales programs, investing in new stores and remodels, and strategic acquisitions. Communicating clear executable standards and aligning performance measures across the organization will help to instill a sales-driven operating environment. ● Build and Support Human Capital – The Company believes that talent is a business differentiator and is committed to creating a sustainable competitive advantage through the selection, development and promotion of talented, highly motivated people. The Company believes that establishing a learning culture supports its commitment to be an employer of choice and helps drive customer engagement with its employees. Improvements in the Company’s talent management and development will help drive business impact while providing internal career opportunities. The Company continues to grow leaders at every level throughout the organization by creating a culture of mentoring, coaching and leveraging on-the-job assignments for continued development. The Company believes that a strong employment brand is necessary to attract and retain top talent and affects its ability to compete and execute strategic plans. The Company will continue to assess and upgrade underlying technologies to support human capital development as a strategic imperative for future growth. 14 Table of Contents WEIS MARKETS, INC. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued) Company Overview (continued) ● Become More Relevant to Consumers – Understanding the consumer is crucial to the Company’s strategic plan. The Company will develop and cultivate a culture where it is continually “on trend” with its consumers at the current time and where they are going next. The Company researches and studies the wants and needs of core consumers and casual consumers. It measures customer satisfaction and shares insights across the organization to improve communication between Management and its consumers. The Company uses consumer data to measure the value of programs offered and support consumer attraction and retention. The Company believes that its private brand products exceed consumer expectations and will continue to focus on the value and attribute messaging to drive organic growth. ● Create Meaningful Differentiation – The Company recognizes the need to offer a compelling reason for customers to choose them over other channels. The Company has identified product pricing and promotion, customer shopping experience, and merchandising strategies as critical components of future success. The Company recognizes that the core of the strategy will focus on alignment of merchandising programs that foster customer engagement supported by a shopping experience that surpasses customers’ expectations. As part of this strategy, Management is committed to offering its customers a strong combination of quality, service and value. ● Develop and Align Organizational Capabilities – The Company will elevate organizational capacity to support decision effectiveness and deliver consistent execution. To support this strategy the Company will assess organizational capacity to support the Company’s strategic direction. The Company will align business functions and processes to enhance key capabilities and to support scalability of operations. Continued investments in information technology systems to improve employee engagement, increase productivity, and provide valuable insight into customer behavior/shopping trends will remain a focus of the Company. The Company believes these systems will continue to play a key role in the measurement of the Company’s strategic decisions and financial returns. ● Focus on Sustainability Strategies and Community Stewardship – The Company strives to be good stewards of the environment and makes this an important part of its overall mission. Its sustainability strategy operates under four key pillars: natural resource conservation, green design, community impact, and food and agricultural impact. The goal of the sustainability strategy is to reduce the Company’s overall carbon footprint by reducing greenhouse gas emissions and reducing the impact on the environment. In November 2025, the Company established the Weis Markets Charitable Foundation, Inc. (the “Foundation”), a federal income tax-exempt nonprofit corporation organized under Internal Revenue Code Section 501(c)(3) as a public charity. The Foundation’s mission is to continue to support and assist the local nonprofit organizations in communities where the Company operates. The Company’s most recently published sustainability report is located at: https://www.weismarkets.com/sustainability. Results of Operations Two-Year Stacked Comparable 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. 15 Table of Contents WEIS MARKETS, INC. 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 December 27, 2025 2025 vs. 2024 2024 vs. 2023 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 (amounts in thousands except per share amounts) 2025 (As restated) (As restated) 2025 vs. 2024 vs. For the Fiscal Years Ended December 27, 2025, December 28, 2024 and December 30, 2023 (52 Weeks) (52 Weeks) (52 Weeks) 2024 2023 Net sales $ 4,939,373 $ 4,773,880 $ 4,696,950 3.5 % 1.6 % Other revenue 18,336 17,850 17,623 2.7 1.3 Total revenue 4,957,709 4,791,730 4,714,573 3.5 1.6 Cost of sales, including advertising, warehousing and distribution expenses 3,717,846 3,592,980 3,539,054 3.5 1.5 Gross profit 1,239,863 1,198,750 1,175,519 3.4 2.0 Gross profit margin 25.1 % 25.1 % 25.0 % Operating, general and administrative expenses 1,126,210 1,072,364 1,042,378 5.0 2.9 O, G & A, percent of net sales 22.8 % 22.5 % 22.2 % Income from operations 113,653 126,386 133,141 (10.1) (5.1) Operating margin 2.3 % 2.6 % 2.8 % Investment income (loss) and interest expense 14,697 21,970 13,162 (33.1) 66.9 Investment income (loss) and interest expense, percent of net sales 0.3 % 0.5 % 0.3 % Other income (expense) (4,403) (3,409) (3,652) 29.2 (6.7) Other income (expense), percent of net sales (0.1) % (0.1) % (0.1) % Income before provision for income taxes 123,947 144,947 142,651 (14.5) 1.6 Income before provision for income taxes, percent of net sales 2.5 % 3.0 % 3.0 % Provision for income taxes 30,256 38,923 41,797 (22.3) (6.9) Effective income tax rate 24.4 % 26.9 % 29.3 % Net income $ 93,691 $ 106,024 $ 100,854 (11.6) % 5.1 % 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 % 16 Table of Contents WEIS MARKETS, INC. 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 2025 vs. 2024 vs. 2024 2023 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 $0.25 cents 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. 17 Table of Contents WEIS MARKETS, INC. 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: 2025 vs. 2024 (amounts in thousands) Increase Increase (Decrease) December 27, 2025 (Decrease) as a % of sales Employee expense $ 19,732 0.0 % 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 Gain on disposition of fixed assets (real estate property sales) (3,386) (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. 18 Table of Contents WEIS MARKETS, INC. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued) Results of Operations (continued) 2024 vs. 2023 (amounts in thousands) Increase Increase (Decrease) December 28, 2024 (Decrease) as a % of sales Employee expense $ 12,498 0.1 % Employee insurance benefits expense 4,684 0.1 Third party expense (technology, consulting, and financial service fees) 9,769 0.2 Supplies expense 2,999 0.0 Other expenses (utilities, asset disposals, and deferred compensation plan liability) 36 (0.1) 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. 19 Table of Contents WEIS MARKETS, INC. 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) For the Fiscal Years Ended December 27, 2025, 2025 2024 2023 2025 vs. 2024 vs. December 28, 2024 and December 30, 2023 (52 weeks) (52 Weeks) (52 weeks) 2024 2023 Net cash provided by (used in): Operating activities $ 207,206 $ 187,467 $ 201,602 $ 19,739 $ (14,135) Investing activities (105,321) (144,779) (138,800) 39,458 (5,979) Financing activities (175,117) (36,582) (36,582) (138,535) — 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 $94.9 million 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. 20 Table of Contents WEIS MARKETS, INC. 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 (dollars in thousands) Total 1 year 1-3 years 3-5 years 5 years Operating leases $ 203,005 $ 47,882 $ 78,095 $ 42,755 $ 34,273 Total $ 203,005 $ 47,882 $ 78,095 $ 42,755 $ 34,273 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. 21 Table of Contents WEIS MARKETS, INC. 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.” 22 Table of Contents WEIS MARKETS, INC. 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. 23 Table of Contents WEIS MARKETS, INC.