Breaking Down Village Super Market, Inc. (VLGEA) Financial Health: Key Insights for Investors

You're looking at Village Super Market, Inc. (VLGEA) and seeing the grocery sector's classic tug-of-war: solid top-line growth against persistent margin pressure, so the question is whether their operational efficiency can win out. Honestly, the fiscal year 2025 results give us a clear map, but also a warning sign. The company delivered strong annual sales of $2.32 billion, representing a healthy 3.76% increase, driven by a 2.1% rise in same-store sales and an impressive 10% surge in same-store digital sales. That's a clear signal their renovation and digital strategy is paying off. But here's the quick math on the risk: while net income jumped 12% to $56.4 million for the full year, the fourth quarter adjusted net income actually fell 8% to $15.6 million, with gross profit as a percentage of sales dipping to 28.57% for the year due to higher promotional spending and cost inflation. We need to dig into the details to see if the 23.92% operating and administrative expense ratio-a slight improvement-is enough to offset the continued squeeze on their gross margin. The path to maximizing returns here is defintely in understanding that trade-off.

Revenue Analysis

When you look at a grocery chain like Village Super Market, Inc. (VLGEA), the first question is always: where is the money actually coming from? The top-line revenue number tells you the overall scale, but the breakdown shows you the health and the trajectory. For the fiscal year ending July 26, 2025, Village Super Market, Inc. reported total sales of $2,320.69 million. That's a solid number, but the real insight is in the growth drivers and the product mix.

The company is not just treading water; it's growing. Village Super Market, Inc. achieved a year-over-year revenue growth rate of 3.76% in fiscal 2025, up from the prior year. This growth is defintely not accidental. It's a direct result of two key factors: expanding their physical footprint with new and replacement stores, and a strong performance in their existing locations, which is captured in the 2.1% rise in same-store sales. Same-store sales growth is the best indicator of operational execution in retail-it means they are getting more out of the assets they already have.

The revenue streams themselves are what you'd expect from a traditional supermarket operator, but the percentages reveal where the focus is. As a member of the Wakefern Food Corporation cooperative, Village Super Market, Inc. operates 34 supermarkets under the ShopRite and Fairway banners, plus three Gourmet Garage specialty markets. Their sales are categorized into four main segments, which is crucial for understanding margin pressures, since not all products are created equal in terms of profitability.

Here is the breakdown of how each segment contributed to total sales in fiscal 2025:

• Center Store: 59.7% of total sales, covering your typical packaged goods, dry groceries, frozen foods, and non-food items like health and beauty care.
• Fresh: 35.9% of sales, which includes produce, meat, deli, seafood, and bakery-the high-touch, high-margin departments.
• Pharmacy: 4.0% of sales, a segment that often offers higher margins and drives repeat customer traffic.
• Other: 0.4% of sales, a minor component.

The big changes driving the 2025 revenue increase were a mix of physical expansion and strategic category strength. The opening of the Watchung, NJ replacement store in April 2025, plus the Old Bridge, NJ replacement store from the prior year, added capacity. More importantly, the same-store sales growth was fueled by three specific areas: continued growth in digital sales, higher pharmacy sales, and inflation in the meat and dairy departments. What this estimate hides is the cannibalization effect from the new Watchung store, which slightly offset the overall gains in existing locations. Still, the underlying trend is positive, showing customers are buying more, both online and in-store.

To be fair, the grocery industry is tough, characterized by narrow profit margins. But the company's ability to drive digital sales and capitalize on higher-margin areas like pharmacy is a clear action point for investors to watch. You can see how these operational decisions tie back to the core strategy in their foundational documents: Mission Statement, Vision, & Core Values of Village Super Market, Inc. (VLGEA).

Profitability Metrics

You want to know if Village Super Market, Inc. (VLGEA) is actually making money, or if its sales growth is just a vanity metric. The direct takeaway is that VLGEA's profitability in fiscal year 2025 is solid for the thin-margin grocery sector, with a slight dip in gross margin offset by better operational cost control, keeping the net margin competitive.

For the full fiscal year ending July 26, 2025, Village Super Market, Inc. reported total revenue of approximately $2.32 billion, representing a 3.76% increase from the prior year. The key is what they kept from that revenue, which is where the margins come in. Here's the quick math on the core profitability ratios for FY 2025, which you can use as your baseline for future analysis:

Operational Efficiency and Cost Management

In the grocery business, a few basis points (bps) can make or break a year. While the Gross Profit Margin for VLGEA saw a slight decrease to 28.57% in FY 2025 from 28.70% in the prior year, the company defintely showed discipline in managing costs further down the income statement. The primary pressure on the gross margin came from higher promotional spending and an unfavorable shift in product mix, which is common when consumers trade down due to inflation.

But here's the good news: Village Super Market, Inc. managed to shrink its Operating and Administrative Expense as a percentage of sales to 23.92% for the full year, down from 24.34% in the previous fiscal year. That's a 42-basis-point improvement in cost control, which is significant. This efficiency gain is what protected the bottom line, driving net income up 12% to $56.4 million.

• Lower employee costs were a major contributor to the expense reduction.
• Sales leverage on occupancy and facility costs also helped, meaning sales grew faster than those fixed costs.
• Patronage dividends and rebates from the Wakefern cooperative membership continued to provide a crucial offset to margin pressures.

Industry Comparison: VLGEA's Competitive Edge

The supermarket industry is notoriously challenging, operating on razor-thin net margins. For the broader grocery sector, the average net profit margin is often cited in the range of 1.6% (after-tax) to 2.2% (pre-tax), with larger chains sometimes hitting closer to 3%. VLGEA's Net Profit Margin of 2.43% for FY 2025 puts it squarely in the upper-middle tier of this competitive landscape. It's a respectable number that shows they are managing the cost-of-goods-sold (COGS) and operating expenses better than many of their peers.

The key difference is their Gross Profit Margin. VLGEA's 28.57% Gross Margin is far higher than what many conventional grocers see, largely thanks to its membership in the Wakefern cooperative, which provides better buying power and rebates. This co-op model gives them a structural advantage over non-co-op peers, allowing them to absorb some of the pricing pressure you see in the market while still investing in growth, like the new replacement store in Watchung, NJ. If you want to dig into the full context of their financial position, you can read the rest of the analysis here: Breaking Down Village Super Market, Inc. (VLGEA) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

If you're looking at Village Super Market, Inc. (VLGEA), the immediate takeaway is that their balance sheet is defintely conservative. They rely far more on shareholder equity than on borrowing, which is a big green flag for financial stability. This is a low-leverage model for a capital-intensive business.

As of the most recent reporting periods for the 2025 fiscal year, Village Super Market, Inc.'s total debt stood at approximately $341.02 million. This total is split between long-term obligations, like mortgages on their store properties, and shorter-term needs. Here's the quick math on their debt composition:

• Long-Term Debt (FY 2025): $67.27 million.
• Short-Term Debt (Calculated): $273.75 million.

The bulk of their debt, around 80%, is classified as short-term, which often includes the current portion of long-term debt or working capital lines. Still, the overall level of debt is quite manageable when you look at their equity base.

The key metric here is the Debt-to-Equity (D/E) ratio, which measures how much debt a company uses to finance its assets relative to the value of shareholders' equity. Village Super Market, Inc.'s Total Debt-to-Equity ratio sits at about 0.69, or 69%. This means for every dollar of equity, the company uses only 69 cents of debt.

To be fair, that 0.69 ratio is significantly lower than the grocery store industry median, which typically runs around 1.44 as of 2024 data. This tells you the company is less leveraged than most of its peers, making it less vulnerable to interest rate hikes or a sudden drop in sales. It's a sign of a strong financial position, further supported by an Altman Z-Score of 3.80 in November 2025, which puts them firmly in the 'Safe Zones' for credit risk.

Their financing strategy is clearly focused on organic growth and debt reduction, not aggressive debt-fueled expansion. The company has explicitly pursued a debt reduction strategy, which has resulted in decreased interest expense in the first half of the 2025 fiscal year. They are balancing capital expenditures-like opening and remodeling stores-with internally generated cash flow and a conservative use of debt, prioritizing equity funding as the primary capital source. You can read more about their operational performance in our full analysis: Breaking Down Village Super Market, Inc. (VLGEA) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know if Village Super Market, Inc. (VLGEA) has enough short-term cash to cover its bills, and the 2025 fiscal year data shows a typical grocery store liquidity profile: tight, but manageable. The company's liquidity ratios are a little lean, but their strong operating cash flow is the real safety net.

Assessing Village Super Market, Inc.'s Liquidity Ratios

Liquidity ratios tell us how easily a company can convert assets into cash to pay off its current obligations (liabilities due within one year). For a grocer like Village Super Market, Inc., which moves inventory fast, you expect these ratios to be lower than, say, a software company.

Here's the quick math from the most recent reporting period (MRQ):

• Current Ratio: The current ratio for Village Super Market, Inc. stands at 1.13. This means they have $1.13 in current assets for every dollar of current liabilities. While a ratio of 2.0 is often considered ideal, a ratio just above 1.0 is common for supermarkets because their inventory turns over so quickly.
• Quick Ratio (Acid-Test Ratio): The quick ratio, which excludes inventory (since it's less liquid than cash or receivables), is 0.72. This is lower than the current ratio, which is expected for a retailer, and shows that without selling inventory, they can't cover all short-term debt. This is defintely something to watch, but not an immediate crisis, given the nature of the business.

The key takeaway? Their day-to-day operations rely on constant sales to generate the cash needed to pay suppliers. That's just how the grocery business works.

Working Capital Trends and Analysis

Working capital (Current Assets minus Current Liabilities) is the cash available for daily operations. For Village Super Market, Inc., the latest reported working capital is $23.84 million.

The trend in working capital is influenced by the core mechanics of the grocery business, specifically inventory and accounts payable. In the trailing twelve months (TTM) ended July 2025, the company saw a decline in other working capital of $-8 million. This modest decline is often driven by managing supplier payments (accounts payable) efficiently, which can temporarily reduce working capital but is a sign of good cash management.

The company's capital structure also includes a substantial cash position, with Total Cash at the most recent quarter (MRQ) being $110.70 million, which provides a strong buffer against any short-term operational hiccups. Plus, don't forget the value of their membership in the Wakefern Food Corporation cooperative, which is a significant, often less-visible, financial strength. You can read more about their operational structure here: Mission Statement, Vision, & Core Values of Village Super Market, Inc. (VLGEA).

Cash Flow Statements Overview (FY 2025)

Cash flow is the most honest measure of financial health. It shows where the money is actually coming from and where it's going. The 2025 fiscal year (FY 2025) cash flow statement for Village Super Market, Inc. paints a clear picture of a company investing heavily in its future growth.

The $93.22 million in Operating Cash Flow is a very positive sign; it means the core business is generating a lot of cash. This cash is then being deployed into the Investing Cash Flow, which shows a significant outflow of $75.58 million. The bulk of this outflow is due to Capital Expenditures (CapEx) of $58.77 million, which is tied to the company's strategy of replacing and upgrading older stores-a necessary, but costly, move for long-term competitiveness.

Potential Liquidity Strengths and Concerns

The primary strength is the robust OCF, which comfortably covers the CapEx. This is a self-funding growth model. The company is not issuing new long-term debt (Long-Term Debt Issued was $0 in FY 2025) to finance its store upgrades, which is a major positive for solvency. The Total Debt (MRQ) is $341.02 million, but the OCF provides a solid cushion for servicing this debt.

The only real concern is the low quick ratio of 0.72. If there were a sudden, unexpected disruption to the supply chain or a sharp drop in sales, the company would have to liquidate inventory quickly to meet its short-term obligations. However, the high cash balance of $110.70 million and the defensive nature of the grocery business mitigate this risk. They are a trend-aware realist: they are spending now to ensure future revenue.

Valuation Analysis

You're looking at Village Super Market, Inc. (VLGEA) and trying to figure out if you're buying a bargain or a potential headache. The short answer is that, based on key metrics as of November 2025, Village Super Market, Inc. appears to be undervalued compared to the broader market and its sector peers, signaling a solid value proposition.

As a seasoned analyst, I look at three core multiples-Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA)-to quickly gauge market sentiment against a company's fundamental value. For Village Super Market, Inc., these numbers tell a clear story of a stable, income-producing asset trading at a discount.

Here's the quick math on the trailing 12-month (TTM) figures:

• Price-to-Earnings (P/E) Ratio: The TTM P/E is approximately 8.97. This is defintely low, especially when the S&P 500's P/E ratio is often double that. It suggests investors are paying less than nine times earnings for the company.
• Price-to-Book (P/B) Ratio: At about 1.01, the stock is trading essentially at its book value-meaning the market cap is roughly equal to the company's net asset value. This is a classic sign of a value stock.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric, which is better for comparing capital-intensive retailers, sits at approximately 6.59. This is also quite conservative and indicates a strong valuation relative to its core operating profitability.

A P/B ratio near 1.01 is a strong indicator of undervaluation; you're buying the assets for what they're worth on paper.

To put this in context, let's look at the specific data points:

The stock's performance over the last 12 months has been strong, with the price rising by 28.17%. The 52-week trading range of $29.64 to $40.15 shows volatility, but the current price of around $34.30 as of November 2025 is well within that range and closer to the low end than the high. This recent upward trend, plus the low valuation multiples, suggests the market is starting to recognize the value, but hasn't fully priced it in yet.

In terms of income, Village Super Market, Inc. is a reliable dividend payer. The forward annual dividend payout is $1.00 per share, which translates to a healthy dividend yield of approximately 2.96%. Crucially, the payout ratio is a very sustainable 25.72%. This low payout ratio means the company is only using a quarter of its earnings to cover the dividend, leaving plenty of cash flow for reinvestment or future dividend hikes. You get a solid yield with a high margin of safety.

Finally, the Wall Street consensus on the stock is a 'Buy'. While only one analyst has issued a formal rating recently, that single rating is optimistic. This aligns with the quantitative metrics, suggesting that the stock is an attractive option for value-oriented investors. For a deeper dive into the company's long-term strategy, you should review the Mission Statement, Vision, & Core Values of Village Super Market, Inc. (VLGEA).

Next Step: Review the company's Q4 2025 earnings report, estimated for December 2, 2025, to confirm the sustainability of the current earnings per share (EPS) of $3.81.

Risk Factors

You're looking at Village Super Market, Inc. (VLGEA) and seeing solid revenue-$2,320.69 million in sales for fiscal year 2025-but the reality of the grocery business is that margins are razor-thin, and the risks are structural. You need to understand where the company is most exposed, especially as they navigate heavy capital expenditure and a tight labor market.

The biggest near-term risk isn't a single store failing; it's the intense, multi-front competition that keeps the gross profit percentage at a modest 28.57%. Village Super Market, Inc. competes with everyone from national chains and supercenters to online grocers. This is a constant battle for every dollar of the consumer's food budget, and it forces higher promotional spending, which chipped away at the gross profit margin in fiscal 2025.

• Competitive Pressure: National, regional, and online rivals constantly squeeze prices.
• Economic Concentration: Operations are heavily focused in New Jersey, New York, Pennsylvania, and Maryland, meaning a serious regional economic downturn or a spike in local unemployment hits them harder than a national chain.
• Cybersecurity Exposure: Like any retailer, the risk of a breach of customer or associate data is real, and the resulting reputational damage and litigation costs could be significant.

A unique and critical operational risk is the company's reliance on Wakefern Food Corporation. Village Super Market, Inc. is the second largest member of this retailer-owned cooperative, which is great for purchasing power and distribution. But, this relationship is a double-edged sword. If Wakefern's operations materially change, or if a significant member fails to meet their obligations, Village Super Market, Inc.'s costs could jump. That's a key vulnerability you just don't see with a fully independent chain.

Labor is another area of financial exposure. Honestly, this is a major headwind for the entire sector. Approximately 91% of Village Super Market, Inc.'s employees are covered by collective bargaining agreements. This is a huge number. While this provides stability, it also means the company faces the continuous risk of work stoppages and, more defintely, rising operating expenses from escalating health care and pension costs negotiated under these contracts. Labor costs are a constant pressure point.

Here's the quick math on their capital strategy versus their cash flow:

The company is actively mitigating these risks through a clear strategy of store upgrades and replacement stores, which is driving their capital expenditure budget of $75 million for fiscal 2026. This spending, which includes a replacement store in East Orange, NJ, is their direct action to combat competition by improving the customer experience and increasing sales efficiency, as seen by the 2.1% rise in same-store sales in 2025. Plus, their centralized commissary helps maintain product quality and production efficiency across all 37 stores. You can review their strategic focus in detail here: Mission Statement, Vision, & Core Values of Village Super Market, Inc. (VLGEA).

Growth Opportunities

You're looking at Village Super Market, Inc. (VLGEA) and asking the right question: can this regional grocer keep growing in a tough market? The direct takeaway is yes, but the growth is strategic, not explosive. It's driven by a clear, capital-intensive plan to modernize its footprint and double down on digital sales, which is a smart move for long-term stability.

The company's future revenue growth isn't about opening dozens of new stores; it's about making its existing locations much better. This is the store replacement strategy. For the fiscal year 2025, Village Super Market, Inc. reported total sales of $2,320.69 million, fueled in part by a 2.1% rise in same-store sales. The real action is in the capital budget: they've budgeted $75 million in capital expenditures for fiscal year 2026, primarily for a new replacement store in East Orange, New Jersey, and other significant remodels. That's a concrete commitment to growth.

Here's the quick math: a new, larger store in a proven market immediately boosts sales per square foot, which for fiscal year 2025 was already strong at $1,524. This focus on quality over quantity is defintely a key growth driver.

• Replace old stores with modern, larger formats.
• Invest in digital platforms for customer convenience.
• Grow high-margin departments like Fresh and Pharmacy.

The other major growth engine is their digital strategy. In the grocery business, convenience is a product innovation. Village Super Market, Inc. has been enhancing its online shopping and delivery services, which resulted in a solid 10% growth in digital sales during the third quarter of fiscal 2025. This expansion of e-commerce capabilities is crucial for capturing the younger, time-constrained customer base. Plus, their focus on fresh departments, which make up 35.9% of their sales mix, is a smart way to drive traffic and differentiate from discount competitors.

What this estimate hides is the lag between capital spending and revenue impact. A store replacement budgeted in 2026 won't yield its full sales benefit until late 2026 or 2027. Still, analysts project fiscal year 2026 same-store sales to increase between 1.0% and 3.0%, which is steady and realistic.

The company's most significant competitive advantage isn't something they own outright, but their partnership with Wakefern Food Corp. As a member of this retailer-owned cooperative, Village Super Market, Inc. benefits from massive collective purchasing power and shared distribution infrastructure. This allows them to offer competitive pricing under the ShopRite banner while retaining local operational control. Also, the company's real estate portfolio, where it owns the land and buildings for 8 of its 37 locations, provides a valuable, though illiquid, hidden asset.

In terms of earnings, the store replacement strategy has already paid off. Net income for fiscal year 2025 was $56.38 million, and diluted earnings per share (Class A) hit $3.81. This profitability growth, even with a stable number of locations, shows the power of the modernization strategy. For a deeper dive into the company's ethos that guides these decisions, you can read their Mission Statement, Vision, & Core Values of Village Super Market, Inc. (VLGEA).

The table below summarizes the core financial drivers of this growth story, based on the most recent fiscal year data:

Your next step should be to look closely at the upcoming Q4 2025 earnings report, estimated for December 2, 2025, to see if the momentum from the replacement stores and digital sales has continued to accelerate.