OREANDA-NEWS. Village Super Market, Inc. (Nasdaq:VLGEA) today reported its results of operations for the third quarter ended April 23, 2016.

Net income was $5,882,000 in the third quarter of fiscal 2016 compared to $13,206,000 in the third quarter of the prior year. The third quarter of fiscal 2016 includes a $545,000 (net of tax) gain due to the recovery of insurance receivables related to Superstorm Sandy, while the third quarter of the prior year includes a tax benefit of $7,293,000 as a result of the settlement reached with the New Jersey Division of Taxation.  Excluding these items from both fiscal quarters, net income decreased 10% in the third quarter of fiscal 2016 compared to the third quarter of the prior year due primarily to lower sales in the first week of the third quarter of fiscal 2016 due to the impact of Winter Storm Jonas, a lower gross profit percentage and higher operating and administrative expenses.

Sales were $387,905,000 in the third quarter of fiscal 2016, an increase of 0.2% compared to the third quarter of the prior year.  Same store sales also increased 0.2% primarily due to the closing of two competitor stores and continued sales growth in the expanded or replaced stores in Stirling and Greater Morristown.  These increases were partially offset by lower sales in the first week of the third quarter of fiscal 2016 due to Winter Storm Jonas, and six new competitor store openings, including stores formerly operated by A&P. The Company expects same store sales in fiscal 2016 to range from a 0.5% to 1.5% increase.  

Gross profit as a percentage of sales decreased to 27.52% in the third quarter of fiscal 2016 compared to 27.67% in the third quarter of the prior year.

Operating and administrative expense as a percentage of sales decreased to 23.42% in the third quarter of fiscal 2016 compared to 23.47% in the third quarter of the prior year.  In the third quarter of fiscal 2016, Operating and administrative expense includes a gain for Superstorm Sandy insurance proceeds received.  Excluding this gain, Operating and administrative expense as a percentage of sales increased .19% due primarily to increased healthcare costs partially offset by lower payroll.  The increase in healthcare costs is due primarily to higher claim costs in our self-insured medical plan.

Net income was $16,596,000 in the nine-month period of fiscal 2016 compared to $23,688,000 in the nine-month period of the prior year. Fiscal 2016 includes a $545,000 (net of tax) gain due to the recovery of insurance receivables related to Superstorm Sandy. Fiscal 2015 includes a charge to write-off all remaining insurance receivables related to Superstorm Sandy of $1,340,000 (net of tax) and a tax benefit of $6,452,000 related to settlement of the New Jersey tax dispute, net of interest and penalties accrued in fiscal 2015 prior to settlement.  Excluding these items from both periods, net income decreased 14% in the nine-month period of fiscal 2016 compared to the prior year primarily due to a lower gross profit percentage and higher operating and administrative expense.

Village Super Market operates a chain of 29 supermarkets under the ShopRite name in New Jersey, Maryland and northeastern Pennsylvania.