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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 28, 2002.
Or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ______to______.

Commission File Number                                              1-5039

WEIS MARKETS, INC.
(Exact name of registrant as specified in its charter)

                                PENNSYLVANIA                                                                     24-0755415
  (State or other jurisdiction of incorporation or organization)                    (I.R.S. Employer Identification No.)

                      1000 S. Second Street
                              P. O. Box 471
                      Sunbury, Pennsylvania                                                                            17801-0471
              (Address of principal executive offices)                                                            (Zip Code)

(570) 286-4571
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes          X                                        No                       

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, No Par Value                                                                              27,203,362 shares
                                                                                                                   (Outstanding at end of period)

TABLE OF CONTENTS

Table of Contents

WEIS MARKETS, INC.

INDEX

Page 1 of 12 (Form 10-Q)

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WEIS MARKETS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(1) Significant Accounting Policies
Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The operating results for the periods presented are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in the company's latest annual report on Form 10-K.

Impact of Recently Issued Accounting Standards: As of December 30, 2001, the company adopted Emerging Issues Task Force Issue Nos. 00-14, "Accounting for Certain Sales Incentives;" 00-22, "Accounting for 'Points' and Certain Other Time-Based or Volume-Based Sales Incentives Offers, and Offers for Free Products or Services to Be Delivered in the Future;" and 00-25, "Vendor Income Statement Characterization of Consideration from a Vendor to a Retailer" (EITF Issues). These EITF Issues establish new rules for accounting for certain sales incentives, loyalty programs and vendor contracts; however, the adoption of these EITF Issues have not had an impact on the company's net income or shareholders' equity. These EITF Issues require certain sales incentives, which prior to adoption were reported as expenses or costs of goods sold, to be classified as a reduction of revenue. Prior year financial statements have been reclassified to conform to the requirements of t hese EITF Issues.

In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, "Business Combinations" (Statement No. 141) and No. 142, "Goodwill and Other Intangible Assets" (Statement No. 142) effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subjected to annual impairment tests in accordance with the statements. Other intangible assets continue to be amortized over their useful lives.

The company applied Statement No. 142 in the first quarter of fiscal 2002. Application of the statement is expected to result in an increase in pre-tax net income of approximately $1.6 million for fiscal 2002 due to the elimination of amortization of goodwill. The company has performed the required impairment tests of goodwill and has determined that the company's goodwill is not impaired.

(2) Goodwill and Other Intangible Assets - Adoption of Statement 142
The effect of goodwill on net income and earnings per share, for period ended September 28, 2002 and September 29, 2001, is as follows:

		Three Months Ended				Nine Months Ended
(dollars in thousands)		09/28/2002		09/29/2001		09/28/2002		09/29/2001
Reported net income	$	14,846	$	11,703	$	43,176	$	37,603
Add: Goodwill amortization (net of tax)		---		323		---		969
Adjusted net income	$	14,846	$	12,026	$	43,176	$	38,572

		Three Months Ended				Nine Months Ended
		09/28/2002		09/29/2001		09/28/2002		09/29/2001
Reported basic and diluted earnings per share	$	0.55	$	0.43	$	1.59	$	1.11
Add: Goodwill amortization (net of tax)		---		0.01		---		0.03
Adjusted basic and diluted earnings per share	$	0.55	$	0.44	$	1.59	$	1.14

Page 5 of 12 (Form 10-Q)

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WEIS MARKETS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(continued)

(3) Comprehensive Income
The components of comprehensive income, net of related tax, for the period ended September 28, 2002 and September 29, 2001 are as follows:

(4) Property and Equipment
Property and equipment, as of September 28, 2002 and December 29, 2001, consisted of :

Page 6 of 12 (Form 10-Q)

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WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OPERATING RESULTS

          Total sales for the third quarter ended September 28, 2002 increased .5% to $495.9 million as compared to sales of $493.4 million generated in the third quarter of 2001. For the first three quarters of 2002, the company's sales increased 1.6% to $1.492 billion compared to the previous year's total of $1.468 billion. Identical store sales increased .6% for the quarter and 1.5% year-to-date. The company's third quarter sales results were affected by a softening economy; deflation in key categories, particularly beef, pork and poultry; and intensifying competition throughout its market.

          Gross profit of $132.1 million at 26.6% of sales, increased $1.7 million or 1.3% versus the same quarter last year. The increase in gross profit dollars was generated primarily from the higher sales volume, as the gross profit rate increased .2% compared to the third quarter of last year. The year-to-date gross profit of $395.5 million at 26.5% of sales, increased $10.6 million or 2.8%, and increased as a percentage of sales by .3%.

          The third quarter operating, general and administrative expenses of $114.6 million increased $1.1 million or 1.0% compared to the same quarter in 2001. As a percentage of sales, third quarter operating expenses remained virtually unchanged at 23.1% of sales versus 23.0% of sales in 2001. Year-to-date operating expenses of $339.1 million at 22.7% of sales compared to $340.7 million at 23.2% of sales in the first three quarters of last year. On May 7, 2001, the company repurchased approximately 14.5 million shares of its common stock from the family of the late Sigfried Weis for $434.3 million in cash. Due to this transaction, the company incurred $5.3 million in non-recurring expenses in the second quarter of last year. Without this transaction, the 2001 year-to-date operating expenses as a percent of sales would equal 22.8%.

          In the third quarter, the company's investment income totaled $211 thousand compared to $373 thousand a year ago. Year-to-date, the company's investment income decreased $9.1 million or 93.2% to $661 thousand. During the second quarter of 2001, the company sold the majority of its investment portfolio at a small gain in order to complete the all cash stock repurchase transaction.

          Other income for the quarter of $6.1 million at 1.2% of sales increased $3.8 million compared to the same quarter last year. The fluctuation between other income for the third quarter 2002 and 2001 is mainly attributable to the sale of two closed store properties, which generated $2.9 million in gains. Year-to-date other income of $11.9 million at .8% of sales has increased $5.2 million versus a year ago. The difference in gains and losses on closed store property disposals was $4.1 million year-to-date.

          The effective tax rate for the third quarter of 2002 was 37.6% compared with 40.1% in 2001. Year-to-date, the effective tax rate was 37.3% compared to 38.0% in the same period last year. The company's federal income tax returns for 1997-99 are under audit by the Internal Revenue Service. The Internal Revenue Service has provided the company with a number of preliminary notices of proposed adjustment. The Internal Revenue Service has not completed its audit; however, if it were to propose a deficiency, the amount may be material. The company believes that it has meritorious defenses and would contest these matters vigorously.

          For the three month period ending September 28, 2002, the company generated $14.8 million in net income, an increase of 26.9% compared to last year. The company's third quarter basic and diluted earnings per share totaled $.55 compared to $.43 per share in 2001, an increase of 27.9%. Year-to-date earnings were $43.2 million or $1.59 per diluted share, compared to $37.6 million, or $1.11 per diluted share in 2001. The increased year-to-date earnings per share are partially related to the 34.8% reduction in shares after the large stock purchase in the second quarter of last year.

          As of September 28, 2002, Weis Markets, Inc. was operating 160 retail food stores, with locations in Pennsylvania, Maryland, New Jersey, New York, Virginia and West Virginia. The company was operating three less stores at the end of the third quarter of 2002, compared to the same period a year ago. The company also owns SuperPetz II, Inc., a chain of 33 pet supply stores with locations in Alabama, Georgia, Indiana, Kentucky, Maryland, Michigan, North Carolina, Ohio, Pennsylvania, South Carolina and Tennessee.
 

Page 7 of 12 (Form 10-Q)

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WEIS MARKETS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)

LIQUIDITY AND CAPITAL RESOURCES

          During the first nine months of 2002, the company generated $88.3 million in cash flows from operating activities compared to $100.3 million for the same period in 2001. Working capital increased $4.8 million or 4.7% since the beginning of the year.

          Net cash used in investing activities amounted to $40.8 million for the first three quarters of the year as compared to cash provided by investing activities of $348.8 million in 2001. Year-to-date capital expenditures totaled $28.6 million as compared to $34.6 million in the first three quarters of 2001. The capital expa