VLGEA - Village Super Market: Margin Concerns Highlighted In Recent Quarter

2024-07-09 10:22:02 ET

Summary

• Village Super Market operates 38 supermarkets, with a history of slow store network expansion.
• Profitability weighs on VLGEA, as long-term SG&A inflation and very notable SG&A increases in Q3 make for a weak margin outlook in the thin-margin sector.
• The valuation seems attractive on the surface with the low overall risk level, but as I believe that better opportunities exist in the sector, I rate VLGEA stock at Hold.

Village Super Market, Inc. ( VLGEA ) operates supermarkets through the ShopRite, Fairway Markets, and Gourmet Garage brands in the U.S., with 38 total stores standing at the end of FY2023 . The company has historically slowly grown out its store footprint in certain markets, including mainly New Jersey, New York, Pennsylvania, and Maryland....

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