VILLAGE SUPER MARKET INC 10-Q

ITEM 1. FINANCIAL STATEMENTS VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) January 24, 2026 July 26, 2025 ASSETS Current assets: Cash and cash equivalents $ 160,105 $ 110,699 Merchandise inventories 45,182 51,424 Patronage dividend receivable 6,132 14,144 Income taxes receivable 110 5,265 Other current assets 23,080 19,223 Assets held for sale — 4,354 Total current assets 234,609 205,109 Property, equipment and fixtures, net 321,083 322,889 Operating lease assets 239,705 252,291 Notes receivable from Wakefern 115,357 111,205 Investment in Wakefern 32,207 32,207 Investments in real estate partnerships 21,527 21,701 Goodwill 24,190 24,190 Other assets 38,571 34,119 Total assets $ 1,027,249 $ 1,003,711 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Operating lease obligations $ 21,737 $ 21,585 Finance lease obligations 1,091 1,037 Notes payable to Wakefern 479 541 Current portion of long-term debt 9,370 9,370 Accounts payable to Wakefern 90,765 83,258 Accounts payable and accrued expenses 36,607 33,177 Accrued wages and benefits 30,024 32,004 Income taxes payable 1,396 297 Total current liabilities 191,469 181,269 Operating lease obligations 228,996 241,216 Finance lease obligations 17,565 18,243 Notes payable to Wakefern and other related parties 395 405 Long-term debt 49,510 48,621 Pension liabilities 2,999 3,284 Other liabilities 19,645 18,709 Total liabilities 510,579 511,747 Commitments and contingencies (Note 5) Shareholders' Equity: Preferred stock, no par value: Authorized 10,000 shares, none issued — — Class A common stock, no par value: Authorized 20,000 shares; issued 11,624 shares at January 24, 2026 and 11,627 shares at July 26, 2025 85,428 83,616 Class B common stock, no par value: Authorized 20,000 shares; issued and outstanding 4,125 shares at January 24, 2026 and July 26, 2025 670 670 Retained earnings 446,911 423,690 Accumulated other comprehensive income 4,126 4,453 Treasury stock, Class A, at cost: 997 shares at January 24, 2026 and July 26, 2025 ( 20,465 ) ( 20,465 ) Total shareholders' equity 516,670 491,964 Total liabilities and shareholders' equity $ 1,027,249 $ 1,003,711 See notes to consolidated financial statements. 3 VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) 13 Weeks Ended 26 Weeks Ended January 24, 2026 January 25, 2025 January 24, 2026 January 25, 2025 Sales $ 640,959 $ 599,651 $ 1,223,552 $ 1,157,347 Cost of sales 461,081 429,645 878,723 825,463 Gross profit 179,878 170,006 344,829 331,884 Operating and administrative expense 147,886 139,254 289,332 276,774 Depreciation and amortization expense 8,529 8,602 16,934 16,985 Operating income 23,463 22,150 38,563 38,125 Interest expense 847 982 1,709 1,972 Interest income ( 3,176 ) ( 3,356 ) ( 6,444 ) ( 6,972 ) Income before income taxes 25,792 24,524 43,298 43,125 Income taxes 7,920 7,628 13,425 13,428 Net income $ 17,872 $ 16,896 $ 29,873 $ 29,697 Net income per share: Class A common stock: Basic $ 1.34 $ 1.27 $ 2.25 $ 2.23 Diluted 1.21 1.14 2.02 2.01 Class B common stock: Basic $ 0.87 $ 0.82 $ 1.46 $ 1.45 Diluted 0.87 0.82 1.46 1.45 See notes to consolidated financial statements. 4 VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited) 13 Weeks Ended 26 Weeks Ended January 24, 2026 January 25, 2025 January 24, 2026 January 25, 2025 Net income $ 17,872 $ 16,896 $ 29,873 $ 29,697 Other comprehensive income (loss): Unrealized gains (losses) on interest rate swaps, net of tax (1) 162 283 ( 478 ) ( 110 ) Amortization of pension actuarial gain, net of tax (2) ( 27 ) ( 68 ) ( 54 ) ( 135 ) Pension settlement loss, net of tax (3) — — 205 — Total other comprehensive income (loss) 135 215 ( 327 ) ( 245 ) Comprehensive income $ 18,007 $ 17,111 $ 29,546 $ 29,452 (1) Amounts are net of tax of $ 79 and $ 128 for the 13 weeks ended January 24, 2026 and January 25, 2025, respectively, and $ 215 and $ 50 for the 26 weeks ended January 24, 2026 and January 25, 2025, respectively. (2) Amounts are net of tax of $ 12 and $ 31 for the 13 weeks ended January 24, 2026 and January 25, 2025, respectively, and $ 24 and $ 62 for the 26 weeks ended January 24, 2026 and January 25, 2025, respectively. All amounts are reclassified from accumulated other comprehensive income to operating and administrative expense. (3) Amount is net of tax of $ 93 for the 26 weeks ended January 24, 2026. All amounts are reclassified from accumulated other comprehensive income to operating and administrative expense. See notes to consolidated financial statements. 5 VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands) (Unaudited) 13 Weeks Ended January 24, 2026 and January 25, 2025 Class A Common Stock Class B Common Stock Accumulated Other Comprehensive Income (Loss) Treasury Stock Class A Total Shareholders' Equity Shares Issued Amount Shares Issued Amount Retained Earnings Shares Amount Balance, October 25, 2025 11,626 $ 84,529 4,125 $ 670 $ 432,366 $ 3,991 997 $ ( 20,465 ) $ 501,091 Net income — — — — 17,872 — — — 17,872 Other comprehensive income, net of tax of $ 67 — — — — — 135 — — 135 Dividends — — — — ( 3,327 ) — — — ( 3,327 ) Restricted shares forfeited ( 2 ) ( 30 ) — — — — — — ( 30 ) Share-based compensation expense — 929 — — — — — — 929 Balance, January 24, 2026 11,624 $ 85,428 4,125 $ 670 $ 446,911 $ 4,126 997 $ ( 20,465 ) $ 516,670 Balance, October 26, 2024 11,634 $ 81,067 4,125 $ 670 $ 390,097 $ 6,119 998 $ ( 20,491 ) $ 457,462 Net income — — — — 16,896 — — — 16,896 Other comprehensive income, net of tax of $ 97 — — — — — 215 — — 215 Dividends — — — — ( 3,330 ) — — — ( 3,330 ) Restricted shares forfeited ( 14 ) ( 150 ) — — — — — — ( 150 ) Share-based compensation expense — 875 — — — — — — 875 Balance, January 25, 2025 11,620 $ 81,792 4,125 $ 670 $ 403,663 $ 6,334 998 $ ( 20,491 ) $ 471,968 26 Weeks Ended January 24, 2026 and January 25, 2025 Class A Common Stock Class B Common Stock Accumulated Other Comprehensive Income (Loss) Treasury Stock Class A Total Shareholders' Equity Shares Issued Amount Shares Issued Amount Retained Earnings Shares Amount Balance, July 26, 2025 11,627 $ 83,616 4,125 $ 670 $ 423,690 $ 4,453 997 $ ( 20,465 ) $ 491,964 Net income — — — — 29,873 — — — 29,873 Other comprehensive loss, net of tax of $ 146 — — — — — ( 327 ) — — ( 327 ) Dividends — — — — ( 6,652 ) — — — ( 6,652 ) Restricted shares forfeited ( 3 ) ( 48 ) — — — — — — ( 48 ) Share-based compensation expense — 1,860 — — — — — — 1,860 Balance, January 24, 2026 11,624 $ 85,428 4,125 $ 670 $ 446,911 $ 4,126 997 $ ( 20,465 ) $ 516,670 Balance, July 27, 2024 11,559 $ 80,186 4,204 $ 683 $ 380,618 $ 6,579 999 $ ( 20,507 ) $ 447,559 Net income — — — — 29,697 — — — 29,697 Other comprehensive loss, net of tax of $ 112 — — — — — ( 245 ) — — ( 245 ) Dividends — — — — ( 6,652 ) — — — ( 6,652 ) Exercise of stock options — 5 — — — — ( 1 ) 16 21 Restricted shares forfeited ( 18 ) ( 194 ) — — — — — — ( 194 ) Share-based compensation expense — 1,782 — — — — — — 1,782 Conversion of Class B shares to Class A shares 79 13 (79) (13) — — — — — Balance, January 25, 2025 11,620 $ 81,792 4,125 $ 670 $ 403,663 $ 6,334 998 $ ( 20,491 ) $ 471,968 See notes to consolidated financial statements. 6 VILLAGE SUPER MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) 26 Weeks Ended January 24, 2026 January 25, 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 29,873 $ 29,697 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 17,943 18,149 Share-based compensation expense 1,812 1,588 Deferred taxes 757 ( 47 ) Provision to value inventories at LIFO 496 344 Gain on sale of property, equipment and fixtures ( 22 ) — Changes in assets and liabilities: Merchandise inventories 5,746 ( 3,502 ) Patronage dividend receivable 8,012 10,255 Accounts payable to Wakefern 9,031 8,279 Accounts payable and accrued expenses 3,359 964 Accrued wages and benefits ( 1,980 ) ( 2,142 ) Income tax receivables and payables 6,254 2,486 Other assets and liabilities ( 2,501 ) ( 5,119 ) Net cash provided by operating activities 78,780 60,952 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 17,709 ) ( 27,548 ) Proceeds from the sale of assets 4,494 — Investment in notes receivable from Wakefern ( 4,152 ) ( 4,298 ) Investment in notes receivable related to New Markets Tax Credit financing ( 4,431 ) — Investment in real estate partnership — ( 339 ) Net cash used in investing activities ( 21,798 ) ( 32,185 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options — 21 Proceeds from issuance of long-term debt 6,000 — Debt issuance costs ( 437 ) — Proceeds from issuance of notes payable to related parties 222 — Principal payments of long-term debt ( 5,602 ) ( 5,468 ) Dividends ( 6,652 ) ( 6,652 ) Net cash used in financing activities ( 6,469 ) ( 12,099 ) NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 50,513 16,668 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD 110,699 117,261 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 161,212 $ 133,929 SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS MADE FOR: Interest $ 1,709 $ 1,972 Income taxes $ 6,415 $ 10,989 NONCASH SUPPLEMENTAL DISCLOSURES: Capital expenditures included in accounts payable and accrued expenses $ 7,897 $ 9,762 Lease obligations obtained in exchange for right-of-use assets $ 175 $ 10,239 See notes to consolidated financial statements. 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) (Unaudited) 1. BASIS OF PRESENTATION and ACCOUNTING POLICIES In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly the consolidated financial position as of January 24, 2026 and July 26, 2025 and the consolidated statements of operations, comprehensive income and cash flows for the 13 and 26 weeks ended January 24, 2026 and January 25, 2025 of Village Super Market, Inc. ("Village" or the “Company"). The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements in the July 26, 2025 Village Super Market, Inc. Annual Report on Form 10-K, which should be read in conjunction with these financial statements. The results of operations for the 13 and 26 weeks ended January 24, 2026 are not necessarily indicative of the results to be expected for the full year. Disaggregated Revenues The following table presents the Company's sales by product categories during each of the periods indicated: 13 Weeks Ended 26 Weeks Ended January 24, 2026 January 25, 2025 (4) January 24, 2026 January 25, 2025 (4) Amount % Amount % Amount % Amount % Center Store (1) $ 384,500 60.0 % $ 364,942 60.9 % $ 727,202 59.4 % $ 698,274 60.4 % Fresh (2) 227,150 35.4 % 209,420 34.9 % 438,134 35.8 % 407,514 35.2 % Pharmacy 26,272 4.1 % 22,616 3.8 % 52,549 4.3 % 46,610 4.0 % Other (3) 3,037 0.5 % 2,673 0.4 % 5,667 0.5 % 4,949 0.4 % Total Sales $ 640,959 100.0 % $ 599,651 100.0 % $ 1,223,552 100.0 % $ 1,157,347 100.0 % (1) Consists primarily of grocery, dairy, frozen, health and beauty care, general merchandise and liquor. (2) Consists primarily of produce, meat, deli, seafood, bakery, prepared foods and floral. (3) Consists primarily of sales related to other income streams, including service fees related to digital sales, wholesale sales and gift card, lottery and other 3rd party commissions. (4) Fiscal 2025 revenues by category have been reclassified to conform to the fiscal 2026 current presentation by product category. 2. MERCHANDISE INVENTORIES Approximately 67 % and 64 % of the Company's merchandise inventories were valued by the last-in, first-out ("LIFO") method at January 24, 2026 and July 26, 2025, respectively, while the remaining balances were valued by the first-in, first-out ("FIFO") method. If the FIFO method had been used for the entire inventory, inventories would have been $ 22,878 and $ 22,382 higher than reported at January 24, 2026 and July 26, 2025, respectively. 3. NET INCOME PER SHARE The Company has two classes of common stock. Class A common stock is entitled to cash dividends as declared 54 % greater than those paid on Class B common stock. Shares of Class B common stock are convertible on a share-for-share basis for Class A common stock at any time. The Company utilizes the two-class method of computing and presenting net income per share. The two-class method is an earnings allocation formula that calculates basic and diluted net income per share for each class of common stock separately based on dividends declared and participation rights in undistributed earnings. Under the two-class method, Class A common stock is assumed to receive a 54 % greater participation in undistributed earnings than Class B common stock, in accordance with the classes' respective dividend rights. Unvested share-based payment awards that contain nonforfeitable rights to dividends are treated as participating securities and therefore included in computing net income per share using the two-class method. 8 Diluted net income per share for Class A common stock is calculated utilizing the if-converted method, which assumes the conversion of all shares of Class B common stock to Class A common stock on a share-for-share basis, as this method is more dilutive than the two-class method. Diluted net income per share for Class B common stock does not assume conversion of Class B common stock to shares of Class A common stock. The table below reconciles Net income to Net income available to Class A and Class B shareholders: 13 Weeks Ended 26 Weeks Ended January 24, 2026 January 25, 2025 January 24, 2026 January 25, 2025 Net income $ 17,872 $ 16,896 $ 29,873 $ 29,697 Distributed and allocated undistributed Net income to unvested restricted shareholders 572 572 956 1,006 Net income available to Class A and Class B shareholders $ 17,300 $ 16,324 $ 28,917 $ 28,691 The tables below reconcile the numerators and denominators of basic and diluted Net income per share for all periods presented. January 24, 2026 13 Weeks Ended 26 Weeks Ended Class A Class B Class A Class B Numerator: Net income allocated, basic $ 13,701 $ 3,599 $ 22,901 $ 6,016 Conversion of Class B to Class A shares 3,599 — 6,016 — Net income allocated, diluted $ 17,300 $ 3,599 $ 28,917 $ 6,016 Denominator: Weighted average shares outstanding, basic 10,200 4,125 10,200 4,125 Conversion of Class B to Class A shares 4,125 — 4,125 — Weighted average shares outstanding, diluted 14,325 4,125 14,325 4,125 January 25, 2025 13 Weeks Ended 26 Weeks Ended Class A Class B Class A Class B Numerator: Net income allocated, basic $ 12,924 $ 3,400 $ 22,661 $ 6,030 Conversion of Class B to Class A shares 3,400 — 6,030 — Net income allocated, diluted $ 16,324 $ 3,400 $ 28,691 $ 6,030 Denominator: Weighted average shares outstanding, basic 10,182 4,125 10,144 4,163 Conversion of Class B to Class A shares 4,125 — 4,163 — Weighted average shares outstanding, diluted 14,307 4,125 14,307 4,163 Non-vested restricted Class A shares of 425 and 437 , which are considered participating securities, and their allocated net income were excluded from the diluted net income per share calculation at January 24, 2026 and January 25, 2025, respectively, due to their anti-dilutive effect. 9 4. RELATED PARTY INFORMATION – WAKEFERN A description of the Company’s transactions with Wakefern Food Corporation ("Wakefern"), its principal supplier, and with other related parties is included in the Company's Annual Report on Form 10-K for the year ended July 26, 2025. 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 Secured Overnight Financing Rate ("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. Included in cash and cash equivalents at January 24, 2026 and July 26, 2025 are $ 129,427 and $ 92,003 , respectively, of demand deposits invested at Wakefern at overnight money market rates. The Company is required to invest in Wakefern's common stock. At January 24, 2026, the Company's indebtedness to Wakefern for the outstanding amount of stock subscriptions was $ 652 , of which $ 479 is recorded in notes payable to Wakefern and $ 173 is recorded in notes payable to Wakefern and other related parties in the consolidated balance sheet. 5. COMMITMENTS and CONTINGENCIES On May 2, 2025, the Company filed a Verified Complaint for Declaratory and Injunctive Relief (the "Complaint") against defendants Wakefern and certain members of its senior management ("Wakefern Management," and together with Wakefern, the "Defendants") in the Superior Court of New Jersey, Chancery Division, Middlesex County (the "Chancery Court"). The matter was captioned Village Super Market, Inc., et al. v. Wakefern Food Corp., et al . In the Complaint, the Company sought to enjoin Wakefern's acquisition of Morton Williams Supermarkets (the "Acquisition") on the basis that the Acquisition violates Wakefern's governing documents, which the Company believes prohibits Wakefern from acquiring and operating a retail chain that competes directly with its members. It also challenged certain actions and inactions by the Defendants in connection with the Acquisition. Subsequently, the Company filed an amended complaint in the Chancery Court on September 19, 2025 (the "First Amended Complaint") to include additional claims concerning the Defendant's actions against the Company that occurred in August 2025. The Acquisition closed on or about October 1, 2025. On January 16, 2026, the Chancery Court denied Wakefern Management's motion to dismiss the claims asserted against them for breach of fiduciary duty. The Chancery Court also entered an Order granting the Company's motion to transfer the matter to the Superior Court of New Jersey, Law Division, Middlesex County (the "Law Division"). Subsequently, the Company filed a second amended complaint and Jury Demand with the Law Division on February 6, 2026 (the "Second Amended Complaint") to seek monetary and punitive damages, and removed the request for injunctive relief as a result of the consummation of the Acquisition. The Company is in the process of evaluating its options for alternative relief with respect to Wakefern and the Acquisition. Notwithstanding the above, the Second Amended Complaint is pending resolution on the merits. In addition, there is currently a dispute that arose in August 2025 between the Company and Wakefern related to certain trademark and other agreements between the parties, which delayed the approval of new stores that the Company has planned. To date, this dispute has not significantly impacted the Company's operations or financial performance or significantly delayed the opening of any new stores. However, Wakefern has indicated that it could take additional actions against the Company if the matter in controversy is not resolved. At this time, the Company is unable to determine the probability of the outcome of these matters, or the range of reasonably possible loss, if any. The Company is involved in other litigation incidental to the normal course of business. Company management is of the opinion that the ultimate resolution of these legal proceedings should not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company. 10 6. DEBT Long-term debt consists of the following: January 24, 2026 July 26, 2025 Secured term loans $ 43,244 $ 45,378 Unsecured term loan 10,085 12,613 New Market Tax Credit financing 5,551 — Total debt 58,880 57,991 Less: current portion of long-term debt 9,370 9,370 Total long-term debt $ 49,510 $ 48,621 Credit Facility The Company has a credit facility (the "Credit Facility") with Wells Fargo National Bank, National Association ("Wells Fargo"). The principal purpose of the Credit Facility is to finance general corporate and working capital requirements, Village’s fiscal 2020 acquisition of certain Fairway assets and certain capital expenditures. Among other things, the Credit Facility provides for: • An unsecured revolving line of credit providing a maximum amount available for borrowing of $ 75,000 . Indebtedness under this agreement bears interest at the applicable SOFR plus 1.25 % and expires on April 30, 2030. • An unsecured $ 25,500 term loan issued on May 12, 2020, repayable in equal monthly installments based on a seven-year amortization schedule through May 4, 2027 and bearing interest at the applicable SOFR plus 1.46 %. An interest rate swap with notional amounts equal to the term loan fixes the base SOFR at .26 % per annum through May 4, 2027, resulting in a fixed effective interest rate of 1.72 % on the term loan. • A secured $ 50,000 term loan issued on September 1, 2020 repayable in equal monthly installments based on a fifteen-year amortization schedule through September 1, 2035 and bearing interest at the applicable SOFR plus 1.61 %. An interest rate swap with notional amounts equal to the term loan fixes the base SOFR at .57 % per annum through September 1, 2035, resulting in a fixed effective interest rate of 2.18 % on the term loan. The term loan is secured by real properties of Village Super Market, Inc. and its subsidiaries, including the sites of three Village stores. • A secured $ 7,350 term loan issued on January 28, 2022 repayable in equal monthly installments based on a fifteen-year amortization schedule through January 28, 2037 and bearing interest at the applicable SOFR plus 1.50 %. An interest rate swap with notional amounts equal to the term loan fixes the base SOFR at 1.41 % per annum through January 28, 2037, resulting in a fixed effective interest rate of 2.91 % on the term loan. The term loan is secured by the Galloway store shopping center. • An unsecured $ 10,000 term loan issued on September 1, 2022 repayable in equal monthly installments based on a seven-year amortization schedule through September 4, 2029 and bearing interest at the applicable SOFR plus 1.35 %. An interest rate swap for a notional amount equal to the term loan fixes the base SOFR at 2.95 % per annum through September 4, 2029, resulting in a fixed effective interest rate of 4.30 % on the term loan. 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 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 %. An interest rate swap for a notional amount equal to the term loan fixes the base SOFR at 3.59 % per annum through January 27, 2038, resulting in a fixed effective interest rate of 5.34 % on the term loan. 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 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 January 24, 2026. As of January 24, 2026, $ 65,979 remained available under the unsecured revolving line of credit. 11 New Markets Tax Credit Financing On December 19, 2025, the Company entered into a financing transaction with Valley National Bank Community Investment Fund, LLC ("Valley Bank") under a qualified New Markets Tax Credit ("NMTC") program related to the construction of a replacement store in East Orange, New Jersey. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the "Act") and is intended to induce capital investment in qualified lower income communities. The Act permits taxpayers to claim credits against their Federal income taxes for up to 39% of qualified investments in the equity of community development entities ("CDEs"). CDEs are privately managed investment institutions that are certified to make qualified low-income community investments. In connection with the financing, VSM New Markets II LLC (the "Leverage Lender") loaned $ 4,431 to DV-ShopRite QEI, LLC (the "Investment Fund) at an interest rate of 1.00 % per year and with a maturity date of December 10, 2051. Additionally, Valley Bank contributed $ 1,929 to the Investment Fund and, by virtue of such contribution, is entitled to substantially all of the tax benefits derived from the NMTC. The Investment Fund is a wholly owned subsidiary of Valley Bank. The Investment Fund then contributed $ 6,000 of the proceeds to a CDE, which, in turn, loaned combined funds of $ 5,563 , net of debt issuance costs of $ 437 , to Village Super Market of Brick Church LLC, a wholly-owned subsidiary of the Company, pursuant to a loan agreement with NJCC CDE 49 LLC (the "Loan Agreement") at an annual interest rate of approximately 1.24 %, payable quarterly, and with a maturity date of December 19, 2055. The loans payable related to the NMTC program, net of debt issuance costs, are recorded in long-term debt in the consolidated balance sheets. The proceeds of the loans from the CDE are restricted in use to funding the construction and store opening costs of the East Orange replacement store. As of January 24, 2026, the unused proceeds of the loans was $ 1,107 , which is classified as restricted cash and recorded in other current assets in the consolidated balance sheets. The NMTC is subject to 100% recapture for a period of seven years. The Company is required to maintain compliance with various regulations and contractual provisions that apply to the NMTC program. Noncompliance could result in Valley Bank's projected tax benefits not being realized and, therefore, require the Company to indemnify Valley Bank for any loss or recapture of NMTCs. The Company does not anticipate any credit recapture will be required in connection with this financing arrangement. The transaction includes a put/call provision whereby the Company may be obligated or entitled to repurchase Valley Bank's interest in the Investment Fund. The value attributed to the put/call is de minimis. The Company expects that Valley Bank will exercise the put option in December 2032, at the end of the recapture period, resulting in a pretax benefit to the Company of $ 1,569 . The Company is recognizing this benefit, together with the debt issuance costs, over the seven-year compliance period in operating and administrative expense and interest expense, respectively. The Company and its Chief Executive Officer, John J. Sumas, entered into a joint venture agreement to form the Leverage Lender. The Company and Mr. Sumas have a 95 % and 5 % ownership interest in the Leverage Lender, respectively. Pursuant to a promissory note entered into between Mr. Sumas and the Leverage Lender on December 19, 2025 (the "Promissory Note"), Mr. Sumas provided a $ 222 loan to the Leverage Lender to partially fund the $ 4,431 leverage loan between the Leverage Lender and the Investment Fund and the remainder of the funds required for the leverage loan were funded by the Company. The Promissory Note between Mr. Sumas and the Leverage Lender, an affiliate of the Company, bears an annual interest rate of 7.00 %, payable quarterly beginning in March 2026, matures on March 31, 2033 and is recorded in notes payable to Wakefern and other related parties in the consolidated balance sheets. The leverage loan receivable of $ 4,431 is recorded in other assets in the consolidated balance sheets and includes interest only quarterly payments commencing in March 2026. 7. DERIVATIVES and HEDGING ACTIVITIES The Company is exposed to interest rate risk arising from fluctuations in SOFR related to the Company's Credit Facility. The Company manages exposure to this risk and the variability of related cash flows primarily by the use of derivative financial instruments, specifically, interest rate swaps. The Company's objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of January 24, 2026, the Company had five interest rate swaps with an aggregate initial notional value of $ 99,975 to hedge the variable cash flows associated with variable-rate loans under the Company's Credit Facility. The interest rate swaps 12 were executed for risk management and are not held for trading purposes. The objective of the interest rate swaps is to hedge the variability of cash flows resulting from fluctuations in the reference rate. The swaps replaced the applicable reference rate with fixed interest rates and payments are settled monthly when payments are made on the variable-rate loans. The Company's derivatives qualify and have been designated as cash flow hedges of interest rate risk. The gain or loss on the derivative is recorded in accumulated other comprehensive income ("AOCI") and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives are reclassified to interest expense as interest payments are made on the variable-rate loans. The Company reclassified $ 395 and $ 577 during the 13 weeks ended January 24, 2026 and January 25, 2025, respectively, and $ 849 and $ 1,272 during the 26 weeks ended January 24, 2026 and January 25, 2025, respectively from AOCI to interest expense. The notional value of the interest rate swaps were $ 53,488 as of January 24, 2026. The fair value of interest rate swaps recorded in other assets in the consolidated balance sheets was $ 4,977 as of January 24, 2026. 8. SEGMENT REPORTING The Company operates a chain of supermarkets in New Jersey, New York, Maryland and Pennsylvania. The Company consists of one operating segment, the retail sale of food and nonfood products. The Company's supermarkets offer similar products to a similar base of customers. Processes for purchasing and distribution, and the regulatory environments they operate in, are all similar and predominantly centralized. The Company does not have any customer representing more than 10% of total revenues. The Company's Chief Executive Officer and its President, together as a group, are the chief operating decision maker ("CODM") as defined within Accounting Standards Codification Topic 280, "Segment Reporting." The CODM assesses performance and allocates resources using income before income taxes and net income. The CODM also uses these measures to evaluate and make decisions on budgets, opening, closing, remodeling or replacing stores, marketing decisions, and acquisitions. The CODM is provided asset information on a consolidated basis as is reported on the consolidated balance sheets. The following table summarizes sales, significant expenses, income before income taxes and net income on the Company’s single reportable segment: 13 Weeks Ended 26 Weeks Ended January 24, 2026 January 25, 2025 January 24, 2026 January 25, 2025 Sales: Net Merchandise Sales $ 637,922 $ 596,978 $ 1,217,885 $ 1,152,398 Other Sales (1) 3,037 2,673 5,667 4,949 Total Sales 640,959 599,651 1,223,552 1,157,347 Less: Cost of sales 461,081 429,645 878,723 825,463 Store labor 54,762 52,951 107,908 103,884 Other operating and administrative expense (2) 93,124 86,303 181,424 172,890 Depreciation and amortization expense 8,529 8,602 16,934 16,985 Interest expense 847 982 1,709 1,972 Interest income ( 3,176 ) ( 3,356 ) ( 6,444 ) ( 6,972 ) Income before income taxes 25,792 24,524 43,298 43,125 Income taxes 7,920 7,628 13,425 13,428 Net income $ 17,872 $ 16,896 $ 29,873 $ 29,697 Capital expenditures and payments for other long-lived assets $ 8,763 $ 15,847 $ 17,709 $ 27,548 (1) Other sales consist primarily of sales related to other income streams, including service fees related to digital sales, wholesale sales and gift card, lottery and other 3rd party commissions. (2) Other operating and administrative expense includes fringe payroll and benefit costs, occupancy expenses, utility costs, other facility costs, advertising, other operating expenses, non-store selling, general, and administrative expenses and income from equity method investments. The Company had equity method investments of $ 23,042 and $ 23,124 at January 24, 2026 and July 26, 2025, respectively. 13