Weis Markets Inc.WMK

Morningstar Rating

Stock Research and Analysis

by Ann Gilpin

The battle for the consumer's food dollar has become increasingly intense in the past few decades with the emergence of nontraditional operators selling grocery items, and regional grocer Weis Markets has been caught in the middle of this heightened Read more

Bulls Say

Despite the unattractive dynamics of the grocery store industry, Weis has continued to increase its top line, generating 4.3% same-store sales growth in fiscal 2008.

Weis was founded in 1912 and has stood the test of time through conservative yet flexible management and an ability to do a lot of the little things right, which differentiate its stores from the competition.

The company remains a dominant player in many small markets that don't tend to attract a significant amount of competition.

The company's use of cash from operations is very stockholder-friendly. At our fair value estimate of $31 per share, the dividend yield would be about 3.7%, and management typically buys back shares at reasonable prices. Read more

Bears Say

Competition for the consumer's food dollar has intensified, with low-price operators like supercenters and warehouse clubs gaining market share over conventional supermarkets during the current economic downturn.

Despite being well managed, Weis has been affected by the competitive pressures, as operating margins have not recovered to historical averages.

Weis' economies of scale are trumped by heavy hitters like Wal-Mart and Costco COST, and it also doesn't have the labor cost advantage that these firms enjoy.

Strategy

Weis aims to improve store traffic by focusing on convenience, higher-quality perishables, and good customer service. The firm also hopes to improve the overall shopping experience by replacing and remodeling Read more

Management

After 44 years with the company, Norman Rich retired as Weis' CEO, a position he held for the last 14 years. Rich was replaced by 50-year-old David Hepfinger, who most recently served as COO at Weis. Hepfinger joined the company in February 2008 after Read more

Profile

Weis Markets operates about 154 retail food stores, primarily under the Weis Markets, Mr. Z's Food Mart, and King's Supermarkets names, and about 27 SuperPetz pet stores. Read more

First Name

Last Name

Email Address

Zip Code

Create Password

Verify Password

(6-15 characters; case sensitive)

What is your occupation or job title?

Select...

Your registration indicates agreement to the terms of use.

Dollar General Stock May Lose a Few Cents
Watch more