What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-03-04 compared with 2025-12-04 · 84 added, 51 removed, 166 unchanged (45% of the section changed)

11 unchanged sentences

Online grocery ordering for in-store pick up or home delivery is available in all of our ShopRite stores through either shoprite.com, the ShopRite app or through third party service providers.

Additionally, the ShopRite Order Express app enables customers to pre-order deli, catering, specialty occasion cakes and other items.

Additionally, the ShopRite and Fairway Order Express apps enable customers to pre-order deli, catering, specialty occasion cakes and other items.

Online ordering for home delivery is available in all Fairway stores through fairwaymarket.com, the Fairway app or through third party service providers.

9 unchanged sentences

When remodeling, Village has sought, whenever possible, to increase the amount of selling space in its stores.

On April 9, 2025, we opened a 72,000 sq.

replacement ShopRite store in Watchung, NJ, that replaced an existing 44,000 sq.

On April 9, 2025, we opened a 72,000 square foot replacement ShopRite store in Watchung, NJ, that replaced an existing 44,000 square foot store.

We consider a variety of indicators to evaluate our performance, such as same store sales;

8 unchanged sentences

These non-GAAP financial measures should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP, nor as an alternative to net income, operating and administrative expense or any other GAAP measure of performance.

Adjusted net income and Adjusted operating and administrative expense are useful to investors because they provide supplemental measures that exclude the financial impact of certain items that affect period-to-period comparability.

Management and the Board of Directors use these measures as they provide greater

transparency in assessing ongoing operating performance on a period-to-period basis.

We believe Adjusted net income and Adjusted operating and administrative expense are useful to investors because they provide supplemental measures that exclude the financial impact of certain items that affect period-to-period comparability.

Management and the Board of Directors use these measures as they provide greater transparency in assessing ongoing operating performance on a period-to-period basis.

Other companies may have different definitions of Non-GAAP Measures and provide for different adjustments, and comparability to the Company's results of operations may be impacted by such differences.

2 unchanged sentences

26 Weeks Ended

2025 October 26,

2026 January 25,

Net Income $ 29,873 $ 29,697

Adjustments to Operating and Administrative Expenses:

Store pre-opening costs (1) $ 383 $ —

Pension settlement charge (1)

6 unchanged sentences

Adjusted operating and administrative expenses as a % of sales 23.62 % 23.91 %

(1) Fiscal 2026 pre-opening costs are associated with opening of the East Orange, NJ ShopRite replacement store that is expected to open in the second half of fiscal 2026.

(1) Fiscal 2026 pension settlement charges relate to the termination of a company-sponsored plan.

1 unchanged sentence

The following table sets forth the major components of the Consolidated Statements of Operations as a percentage of sales:

13 Weeks Ended

October 25, 2025 October 26, 2024

13 Weeks Ended 26 Weeks Ended

January 24, 2026 January 25, 2025 January 24, 2026 January 25, 2025

Sales 100.00% 100.00% 100.00% 100.00%

2 unchanged sentences

Operating and administrative expense 23.07% 23.22% 23.65% 23.91%

Depreciation and amortization 1.44 1.50

Depreciation and amortization expense 1.33% 1.44% 1.38% 1.47%

Operating income 3.66% 3.69% 3.15% 3.30%

4 unchanged sentences

Net income 2.79% 2.82% 2.44% 2.57%

Sales were $582,593 in the 13 weeks ended October 25, 2025, an increase of 4.5% compared to the 13 weeks ended October 26, 2024.

Sales were $640,959 in the 13 weeks ended January 24, 2026, an increase of 6.9% compared to the 13 weeks ended January 25, 2025.

Sales increased due to an increase in same store sales of 4.8% and the opening of the Watchung, NJ replacement store on April 9, 2025.

Same store sales increased due primarily to digital sales growth, continued growth in recently replaced or remodeled stores and higher fresh and pharmacy sales.

Same store sales increased due primarily to significantly higher sales in the last week of the second quarter of fiscal 2026 as customers prepared for Winter Storm Fern, as well as digital sales growth, continued growth in recently replaced or remodeled stores and higher fresh and pharmacy sales.

These increases were partially offset by cannibalization of existing stores from the Watchung replacement store opening and recent competitive store openings.

Excluding the estimated impact of Winter Storm Fern, same store sales increased 1.4% in the 13 weeks ended January 24, 2026 compared to the 13 weeks ended January 25, 2025.

New stores, replacement stores and stores with banner changes are included in same store sales in the quarter after the store has been in operation for four full quarters.

Store renovations and expansions are included in same store sales immediately.

Sales were $1,223,552 in the 26 weeks ended January 24, 2026, an increase of 5.7% compared to the 26 weeks ended January 25, 2025.

Sales increased due to an increase in same store sales of 3.7% and the opening of the Watchung, NJ replacement store on April 9, 2025.

These increases were partially offset by cannibalization of existing stores from the Watchung replacement store opening and recent competitive store openings.

Excluding the estimated impact of Winter Storm Fern, same store sales increased 2.0% in the 26 weeks ended January 24, 2026 compared to the 26 weeks ended January 25, 2025.

Gross Profit .

Gross profit as a percentage of sales decreased .72% in the 13 weeks ended October 25, 2025 compared to the 13 weeks ended October 26, 2024 due primarily to lower patronage dividends and other rebates received from Wakefern (.28%), decreased departmental gross margin percentages (.27%), an unfavorable change in product mix (.10%) and increased promotional spending (.06%).

Gross profit as a percentage of sales decreased .29% in the 13 weeks ended January 24, 2026 compared to the 13 weeks ended January 25, 2025 due primarily to lower patronage dividends and other rebates received from Wakefern (.42%), an unfavorable change in product mix (.07%) and increased promotional spending (.03%), partially offset by increased departmental gross margin percentages (.21%) and decreased warehouse assessment charges from Wakefern (.02%).

Gross profit in both the 13 weeks ended January 24, 2026 and January 25, 2025 were favorably impacted by receipt of patronage dividends from Wakefern greater than estimated amounts accrued in both the second quarter of fiscal 2026 (.32%) and fiscal 2025 (.62%).

Gross profit as a percentage of sales decreased .50% in the 26 weeks ended January 24, 2026 compared to the 26 weeks ended January 25, 2025 due primarily to lower patronage dividends and other rebates received from Wakefern (.36%), an unfavorable change in product mix (.08%) and increased promotional spending (.05%).

Gross profit in both the 26 weeks ended January 24, 2026 and January 25, 2025 were favorably impacted by receipt of patronage dividends from Wakefern greater than estimated amounts accrued in both the second quarter of fiscal 2026 (.17%) and fiscal 2025 (.32%).

Operating and Administrative Expense.

Operating and administrative expense as a percentage of sales decreased .38% in the 13 weeks ended October 25, 2025 compared to the 13 weeks ended October 26, 2024.

Adjusted operating and administrative expenses decreased .51% in the 13 weeks ended October 25, 2025 compared to the 13 weeks ended October 26, 2024.

The decrease in Adjusted operating and administrative expenses is due primarily to lower employee costs (.34%), short-term rental income (.24%), reduced supply spending (.05%) and lower advertising costs (.05%) partially offset by external service, technology, legal and other professional fees (.12%) and increased repair and maintenance costs (.09%).

Operating and administrative expense as a percentage of sales decreased .15% in the 13 weeks ended January 24, 2026 compared to the 13 weeks ended January 25, 2025.

The decrease in Operating and administrative expenses is due primarily to lower employee costs (.40%), lower advertising costs (.15%) and lower occupancy costs (.08%), partially offset by increased external service, technology, legal and other professional fees (.15%), increased weather-related maintenance costs (.13%), higher facility insurance costs (.11%) and increased store pre-opening costs (.06%).

Employee and occupancy costs as a percentage of sales decreased due primarily to operating leverage as a result of significantly higher sales in the last week of the second quarter as a result of Winter Storm Fern.

Operating and administrative expense as a percentage of sales decreased 0.26% in the 26 weeks ended January 24, 2026 compared to the 26 weeks ended January 25, 2025.

Adjusted operating and administrative expenses decreased .29% in the 26 weeks ended January 24, 2026 compared to the 26 weeks ended January 25, 2025.

The decrease in Adjusted operating and administrative expenses is due primarily to lower employee costs (.37%), lower short-term rental income (.10%), lower advertising costs (.10%) and lower occupancy costs (.09%), partially offset by increased external service, technology, legal and other professional fees (.13%), increased repair and weather-related maintenance costs (.13%), increased store pre-opening costs (.09%) and higher facility insurance costs (.05%).

Depreciation and Amortization .

Depreciation and amortization expense increased in the 13 weeks ended October 25, 2025 compared to the 13 weeks ended October 26, 2024, respectively, due primarily to capital expenditures.

Depreciation and amortization expense decreased in the 13 and 26 weeks ended January 24, 2026 compared to the comparative prior year fiscal periods due primarily to timing of capital expenditures.

Interest Expense .

Interest expense decreased in the 13 weeks ended October 25, 2025 compared to the 13 weeks ended October 26, 2024, respectively, due primarily to lower average outstanding debt balances.

Interest expense decreased in the 13 and 26 weeks ended January 24, 2026 compared to the comparative prior year fiscal periods due primarily to lower average outstanding debt balances.

Interest Income .

Interest income decreased in the 13 weeks ended October 25, 2025 compared to the 13 weeks ended October 26, 2024, respectively, due primarily to lower interest rates on variable rate notes receivable from Wakefern and demand deposits invested at Wakefern.

Interest income decreased in the 13 and 26 weeks ended January 24, 2026 compared to the comparative prior year fiscal periods due primarily to lower interest rates on variable rate notes receivable from Wakefern and demand deposits invested at Wakefern.

Income Taxes.

The effective income tax rate was 31.4% in the 13 weeks ended October 25, 2025 compared to 31.2% in the 13 weeks ended October 26, 2024.

Net income was $12,002 in the 13 weeks ended October 25, 2025 compared to $12,803 in the 13 weeks ended October 26, 2024.

Adjusted net income was $12,496 in the 13 weeks ended October 25, 2025, a decrease of 2% compared to $12,803 in the 13 weeks ended October 26, 2024.

The effective income tax rate was 30.7% in the 13 weeks ended January 24, 2026 compared to 31.1% in the 13 weeks ended January 25, 2025.

The effective income tax rate was 31.0% in the 26 weeks ended January 24, 2026 compared to 31.1% in the 26 weeks ended January 25, 2025.

Net income was $17,872 in the 13 weeks ended January 24, 2026 compared to $16,896 in the 13 weeks ended January 25, 2025.

Net income was $29,873 in the 26 weeks ended January 24, 2026 compared to $29,697 in the 26 weeks ended January 25, 2025.

CRITICAL ACCOUNTING POLICIES

2 unchanged sentences

The Company's critical accounting policies relating to the impairment of long-lived assets, goodwill and indefinite-lived intangible assets and accounting for patronage dividends earned as a stockholder of Wakefern, are described in the Company's Annual Report on Form 10-K for the year ended July 26, 2025.

A s of October 25, 2025, there have been no changes to the critical accounting policies contained therein.

A s of January 24, 2026, there have been no changes to the critical accounting policies contained therein.

The preparation of financial statements in conformity with U.S.

2 unchanged sentences

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $19,656 in the 13 weeks ended October 25, 2025 compared to $20,175 in the corresponding period of the prior year.

The change in cash flows from operating activities in fiscal 2026 was primarily due to an decrease in net income and changes in working capital.

Working capital changes, including Other assets and liabilities, decreased cash flows from operating activities by $2,693 in fiscal 2026 compared to a decrease of $2,522 in fiscal 2025.

The change in impact of working capital is due primarily to a larger increase in merchandise inventories in the 13 weeks ended October 25, 2025 compared to the 13 weeks ended October 26, 2024.

During the 13 weeks ended October 25, 2025, Village used cash to fund capital expenditures of $8,946, dividends of $3,326, principal payments of long-term debt of $2,778 and additional net investments of $2,110 in notes receivable from Wakefern.

Village received $4,494 in proceeds from the sales of real estate assets related to the closed automated micro-fulfillment center in south NJ.

Capital expenditures primarily include costs associated with construction of a replacement store in East Orange, NJ, several smaller remodels and merchandising initiatives, and various technology, equipment and facility upgrades.

We have budgeted $75,000 for capital expenditures in fiscal 2026.

Planned expenditures include costs for construction of a replacement store in East Orange, NJ expected to open in fiscal 2026, construction of a replacement store expected to open in fiscal 2027, several smaller store remodels and merchandising initiatives and various technology, equipment and facility upgrades.

The Company’s primary sources of liquidity in fiscal 2026 are expected to be cash and cash equivalents on hand at October 25, 2025 and operating cash flow generated in fiscal 2026.

At October 25, 2025, the Company held variable rate notes receivable due from Wakefern of $37,370 that earn interest at the prime rate plus .50% and mature on August 15, 2027, $38,576 that earn interest at the prime rate plus .50% and mature on September 28, 2027, and $37,369 that earn interest at the SOFR plus 2.25% and mature on February 15, 2029.

Wakefern has the right to prepay these notes at any time.

Under certain conditions, the Company can require Wakefern to prepay the notes, although interest earned since inception would be reduced as if it was earned based on overnight money market rates as paid by Wakefern on demand deposits.

Working capital was $31,520 at October 25, 2025 compared to $23,840 at July 26, 2025.

The following table details our cash flows for the 26 weeks ended January 24, 2026 and January 25, 2025:

26 Weeks Ended

2026 January 25,

Net cash provided by operating activities $ 78,780 $ 60,952 $ 17,828

Net cash used in investing activities (21,798) (32,185) 10,387

Net cash used in financing activities (6,469) (12,099) 5,630

Net increase in cash, cash equivalents and restricted cash $ 50,513 $ 16,668 $ 33,845

Net Cash Provided by Operating Activities .

Net cash provided by operating activities was $78,780 in the 26 weeks ended January 24, 2026 compared to $60,952 in the 26 weeks ended January 25, 2025.

The $17,828 net increase in cash provided by operating activities was due primarily to a net favorable change related to our operating assets and liabilities, including our working capital.

The net favorable change related to our operating assets and liabilities, including our working capital, was due primarily to the favorable changes in our merchandise inventories driven by higher sales associated with Winter Storm Fern and income tax receivables and payables driven by lower tax payments due to tax benefits resulting from bonus depreciation, partially offset by lower patronage dividends received in the 26 weeks ended January 24, 2026 compared to the prior fiscal year period.

Net Cash Used In Investing Activities .

Net cash used in investing activities was $21,798 in the 26 weeks ended January 24, 2026 compared to $32,185 in the 26 weeks ended January 25, 2025.

The $10,387 net decrease in cash used in investing activities was due primarily to a $9,839 decrease in capital expenditures and proceeds of $4,494 in 26 weeks ended January 24, 2026 in connection to the sale of real estate assets related to our closed automated micro-fulfillment center in south NJ.

These increases in cash used in investing activities were partially offset by an investment of $4,431 in notes receivable related to a New Markets Tax Credit financing transaction associated with our replacement store in East Orange, NJ.

During the 26 weeks ended January 24, 2026, we invested $17,709 on capital expenditures related primarily to the construction of replacement stores in East Orange, NJ and Galloway, NJ, several smaller remodels and merchandising initiatives, and various technology, equipment and facility upgrades.

Net Cash Used In Financing Activities .

Net cash used in financing activities was $6,469 in the 26 weeks ended January 24, 2026 compared to $12,099 in the 26 weeks ended January 25, 2025.

The $5,630 net decrease in cash used in financing activities was due primarily to $5,563 in proceeds from the issuance of long-term debt, net of debt issuance costs, associated with a New Markets Tax Credit financing transaction associated with our replacement store in East Orange, NJ.

During each of the 26 weeks ended January 24, 2026 and January 25, 2025, we made dividend payments of $6,652.

Liquidity and Debt

Working capital was $43,140 at January 24, 2026 compared to $23,840 at July 26, 2025.

Working capital ratios at the same dates were 1.23 and 1.13 to one, respectively.

The Company’s working capital needs are reduced, since inventories are generally sold by the time payments to Wakefern and other suppliers are due.

We have revised our budgeted capital expenditures downward from prior estimates to approximately $65,000 in fiscal 2026 due to delays in the timing of certain projects.

Planned expenditures include costs for construction of a replacement store in East Orange, NJ expected to open in fiscal 2026, construction of a replacement store in Galloway, NJ expected to open in fiscal 2027, several smaller store remodels and merchandising initiatives and various technology, equipment and facility upgrades.

The Company's primary sources of liquidity in fiscal 2026 are expected to be cash and cash equivalents on hand at January 24, 2026 and operating cash flow generated in fiscal 2026.

At January 24, 2026, the Company held variable rate notes receivable due from Wakefern of $38,078 that earn interest at the prime rate plus .50% and mature on August 15, 2027, $39,307 that earn interest at the prime rate plus .50% and mature on

September 28, 2027, and $37,972 that earn interest at the SOFR plus 2.25% and mature on February 15, 2029.

Wakefern has the right to prepay these notes at any time.

Credit Facility

16 unchanged sentences

This loan qualified for an interest rate subsidy program with Wakefern on financing related to certain capital expenditure projects.

Net of the subsidy, the Company will pay interest at a fixed effective rate of 2.30%.

Net of the subsidy, the Company pays interest at a fixed effective rate of 2.30%.

• A secured $7,125 term loan issued on January 27, 2023 repayable in equal monthly installments based on a fifteen-year amortization schedule through January 27, 2038 and bearing interest at the applicable SOFR plus 1.75%.

1 unchanged sentence

The term loan is secured by the Vineland store shopping center.

The Credit Facility also provides for up to $25,000 of letters of credit ($9,021 outstanding at October 25, 2025), which secure obligations for store leases and construction performance guarantees to municipalities.

The Credit Facility also provides for up to $25,000 of letters of credit ($9,021 outstanding at January 24, 2026), which secure obligations for store leases and construction performance guarantees to municipalities.

The Credit Facility contains covenants that, among other conditions, require a minimum tangible net worth, a minimum fixed charge coverage ratio and a maximum adjusted debt to EBITDAR ratio.

The Company was in compliance with all covenants of the credit agreement at October 25, 2025.

As of October 25, 2025, $65,979 remained available under the unsecured revolving line of credit.

Based on current trends, the Company believes cash and cash equivalents on hand at October 25, 2025, operating cash flow and availability under our Credit Facility are sufficient to meet our liquidity needs for the next twelve months and for the foreseeable future beyond the next twelve months.

There have been no other substantial changes as of October 25, 2025 to the contractual obligations and commitments discussed in the Company’s Annual Report on Form 10-K for the year ended July 26, 2025.

The Company was in compliance with all covenants of the credit agreement at January 24, 2026.

As of January 24, 2026, $65,979 remained available under the unsecured revolving line of credit.

Based on current trends, the Company believes cash and cash equivalents on hand at January 24, 2026, operating cash flow and availability under our Credit Facility are sufficient to meet our liquidity needs for the next twelve months and for the foreseeable future beyond the next twelve months.

There have been no other substantial changes as of January 24, 2026 to the contractual obligations and commitments discussed in the Company’s Annual Report on Form 10-K for the year ended July 26, 2025.

This Form 10-Q contains certain forward-looking statements about Village's future performance.

13 unchanged sentences

• We expect the increase in same store sales to range from 1.0% to 3.0% in fiscal 2026.

• We have budgeted $75,000 for capital expenditures in fiscal 2026.

The Company’s primary sources of liquidity in fiscal 2026 are expected to be cash and cash equivalents on hand at October 25, 2025 and operating cash flow generated in fiscal 2026.

• We have revised our budgeted capital expenditures downward from prior estimates to approximately $65,000 in fiscal 2026 due to delays in the timing of certain projects.

The Company's primary sources of liquidity in fiscal 2026 are expected to be cash and cash equivalents on hand at January 24, 2026 and operating cash flows generated in fiscal 2026.

• The Board's current intention is to continue to pay quarterly dividends in fiscal 2026 at the most recent rate of $.25 per Class A and $.1625 per Class B share.

• We believe cash and cash equivalents on hand, operating cash flow and the Company's Credit Facility will be adequate to meet anticipated requirements for working capital, capital expenditures and debt payments for the foreseeable future.

• We expect our effective income tax rate in fiscal 2026 to be in the range of 31.0% - 32.0%.

• We believe cash and cash equivalents on hand, operating cash flows and the Company's Credit Facility will be adequate to meet anticipated requirements for working capital, capital expenditures and debt payments for the foreseeable future.

• We expect our effective income tax rate in fiscal 2026 to be in the range of 30.5% to 31.5%.

Various uncertainties and other factors could cause actual results to differ from the forward-looking statements contained in this report.

46 unchanged sentences

At this time, we are unable to assess the impact of the litigation on our results of operations.

See note 4 to the unaudited consolidated financial statements for information on related party transactions.

See Note 5 of the accompanying consolidated financial statements for additional discussion regarding this litigation.

In connection with our participation in a New Markets Tax Credit program related to the construction of a replacement store in East Orange, New Jersey, on December 19, 2025, the Company and its Chief Executive Officer, John J.

Sumas, entered into a joint venture agreement to form the Leverage Lender (as defined in Note 6 to the accompanying consolidated financial statements), an affiliate of the Company.

The Company and Mr.

Sumas have a 95% and 5% ownership interest in the Leverage Lender, respectively.

In connection with this joint venture, Mr.

Sumas loaned the the Company $222.

See Note 6 to the accompanying consolidated financial statements for additional discussion regarding this related party transaction.

There have been no other significant changes in the Company's relationships or nature of transactions with related parties during the 26 weeks ended January 24, 2026.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis