{"url_path":"/sec/vlgea/10-q/2026/item-3","section_key":"item-3","section_title":"Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-06-03","source_url":"https://www.sec.gov/Archives/edgar/data/103595/0000103595-26-000010-index.html","accession_number":"0000103595-26-000010","cik":"0000103595","ticker":"VLGEA","issuer_name":"VILLAGE SUPER MARKET INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/103595/0000103595-26-000010-index.html","primary_entity_key":"0000103595","primary_entity_name":"VILLAGE SUPER MARKET INC"},"word_count":720,"has_tables":true,"body_markdown":"ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\n\nIn addition to the risks inherent in our operations, we are exposed to certain market risks, including interest rate risk associated with our credit facility, interest rate swaps and variable rate notes receivable due from Wakefern.\n\nThe Company is exposed to interest rate risk arising from fluctuations in Secured Overnight Financing Rate (\"SOFR\") related to the Company's Credit Facility. The Credit Facility includes an unsecured revolving line of credit providing a maximum amount available for borrowing of $75,000 that bears interest at the applicable SOFR plus 1.25% and expires on April 30, 2030. The unsecured revolving line of credit is exposed to interest rate fluctuations to the extent of changes in the SOFR. The Company believes this exposure is not material due to availability of liquid assets to eliminate the outstanding credit facility.\n\nThe Credit Facility includes variable-rate term loans that bear interest at SOFR plus an applicable spread. 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. The interest rate swaps eliminate the economic interest rate exposure on the term loans within the Credit Facility, however the value of the interest rate swaps is exposed to interests rate risk. Generally, the fair market value of our interest rate swaps will decrease as interest rates fall and increase as interest rates rise.\n\nAs of April 25, 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 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 to 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 $328 and $496 during the 13 weeks ended April 25, 2026 and April 26, 2025, respectively, and $1,178 and $1,768 for the 39 weeks ended April 25, 2026 and April 26, 2025, respectively from AOCI to interest expense.\n\nThe notional value of the interest rate swaps were $51,145 as of April 25, 2026. The fair value of interest rate swaps recorded in other assets in the consolidated balance sheets was $4,732 as of April 25, 2026.\n\n22\n\nAt April 25, 2026, the Company held variable rate notes receivable due from Wakefern of $38,759 that earn interest at the prime rate plus .50% and mature on August 15, 2027, $40,010 that earn interest at the prime rate plus .50% and mature on September 28, 2027 and $38,531 that earn interest at the SOFR plus 2.25% and mature on February 15, 2029. Changes in interest rates would impact the amount of interest income we realize on the variable rate notes receivable due from Wakefern. 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.     \n\nIncluded in cash and cash equivalents at April 25, 2026 and July 26, 2025 are $110,988 and $92,003, respectively, of demand deposits invested at Wakefern at overnight money market rates, which are exposed to the impact of interest rate changes."}