WEIS MARKETS INC Annual Report Summary - Fiscal Year Ended December 27, 2025

Weis Markets, Inc. (NYSE: WMK), a familiar name in grocery retail across the Mid-Atlantic, operates over 190 supermarkets primarily in Pennsylvania, Maryland, New Jersey, New York, West Virginia, and Delaware. As a major publicly traded company, classified by the SEC as a "large accelerated filer," it held a public market value of approximately $682 million as of June 28, 2025. This summary offers a clear, concise look at Weis Markets' performance and key developments for the fiscal year ended December 27, 2025, including important restated financial information.

Business Overview Weis Markets operates a chain of retail food stores, providing communities with a wide variety of grocery, dairy, frozen food, meat, seafood, produce, deli, bakery, and pharmacy services. The company embraces a neighborhood grocer model, prioritizing competitive pricing, a diverse product assortment (including private brands and fresh offerings), and efficient supply chain management. It employs approximately 23,000 associates.

Key Financial Highlights (Restated Figures) For the fiscal year ended December 27, 2025, Weis Markets reported restated net sales of approximately $4.7 billion, a modest 2.5% increase from the prior restated year. Restated net income reached $85 million, or $3.15 per diluted share, showing a slight improvement in profitability despite persistent inflationary pressures. The company also maintained a solid financial position, generating strong cash flow from operations and managing its debt effectively to support capital expenditure plans.

Management's Discussion and Analysis (MD&A) Highlights Weis Markets' financial performance in fiscal 2025 reflected a mix of strategic investments, persistent inflationary pressures, and the significant impact of a financial restatement. The 2.5% net sales increase stemmed primarily from effective pricing strategies, higher customer traffic, and growth in online sales, though competitive market conditions partially offset these gains. Profitability saw a slight improvement, driven by operational efficiencies and disciplined expense management, even as product cost inflation kept the cost of goods sold elevated.

The company actively enhanced the customer experience through strategic capital investments. During the year, Weis Markets upgraded 15 stores and expanded its online grocery pickup and delivery services, which saw a 15% increase in utilization. These investments modernize store infrastructure, improve operational efficiency, and expand digital capabilities to meet evolving consumer demands.

Crucial for investors, the company announced restated financial statements for the fiscal years ended December 28, 2024, and December 30, 2023, along with several interim periods in 2024 and 2025.

• Reason for Restatement: Errors in inventory valuation and cost of goods sold (COGS) calculations at a single meat product manufacturing plant necessitated the restatement. The misconduct of a former employee (not an executive) caused these errors, which accumulated over several years.
• Impact on Past Results: The restatement revealed overstated previously reported profits. Specifically, the company reduced its retained earnings (accumulated profits kept in the business) by $5.5 million after taxes as of December 31, 2022, meaning it had less accumulated profit than initially reported.
• Executive Compensation Review: The Board of Directors is actively reviewing whether to recover incentive-based compensation paid to executives during the affected periods, a serious step demonstrating the company's commitment to accountability.
• Internal Control Deficiencies: Weis Markets also identified "material weaknesses" in its internal control over financial reporting as of December 27, 2025. This means the company's systems and processes designed to ensure accurate and reliable financial reporting were ineffective. The company is actively implementing a remediation plan to strengthen these controls and prevent similar issues in the future.

Financial Health and Liquidity Weis Markets maintained a solid financial position throughout fiscal 2025. The company generated strong cash flow from operations, its primary source of liquidity. This cash flow, along with existing cash and equivalents and available revolving credit, adequately funded ongoing operations, capital expenditures, and dividend payments. The company manages its debt prudently, maintaining flexibility. Effective working capital management remains a priority, ensuring adequate resources for inventory, payroll, and other operational needs. This strong liquidity position supports the company's capital expenditure plans, including store upgrades and technology investments.

Competitive Position The grocery retail industry is intensely competitive, marked by fierce price competition, diverse store formats, and rapidly evolving consumer preferences. Weis Markets competes with national and regional supermarket chains, discount retailers, club stores, specialty food stores, and online grocery providers. The company differentiates itself through its neighborhood grocer model, offering a broad assortment of quality products—including private brands and fresh offerings—and providing convenient services like online grocery pickup and delivery. Its established store base and strong brand recognition in its primary operating regions bolster its competitive standing. The company's strategy emphasizes building customer loyalty through value, quality, and service, aiming to maintain and grow its market share in this challenging environment.

Risk Factors Investors should consider several key risks. These include intense competition from other grocery chains, discount retailers, and online providers. Supply chain disruptions, inflation in product costs, and rising labor expenses could significantly impact profitability. Changes in consumer preferences and economic downturns affecting discretionary spending also present challenges. Furthermore, the identified material weaknesses in internal controls pose an ongoing risk to the reliability of future financial reporting until the company fully remediates them. Other risks encompass cybersecurity threats, regulatory changes, and the ability to attract and retain qualified employees.

Future Outlook Looking ahead, Weis Markets aims to focus on operational efficiencies, strategic capital investments, and enhancing its customer value proposition. The company commits to strengthening its internal controls and restoring investor confidence following the restatement, while also delivering value to its customers and shareholders. Management plans continued investments in its store base, technology, and supply chain to support long-term growth and adapt to the dynamic retail landscape.