NEW YORK ( TheStreet) -- Village Super Market Incorporated (Nasdaq: VLGEA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • VLGEA's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 1011.64% to $13.94 million when compared to the same quarter last year. In addition, VILLAGE SUPER MARKET has also vastly surpassed the industry average cash flow growth rate of -20.68%.
  • VLGEA's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
  • VILLAGE SUPER MARKET has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, VILLAGE SUPER MARKET reported lower earnings of $1.88 versus $2.06 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Food & Staples Retailing industry. The net income has significantly decreased by 68.0% when compared to the same quarter one year ago, falling from $5.21 million to $1.67 million.

Village Super Market, Inc., together with its subsidiaries, operates a chain of ShopRite supermarkets in the United States. The company has a P/E ratio of 16.4, below the average retail industry P/E ratio of 27 and below the S&P 500 P/E ratio of 17.7. Village Super Market has a market cap of $185.5 million and is part of the services sector and retail industry. Shares are down 23.1% year to date as of the close of trading on Wednesday.

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