Core Insights - Natural Grocers is promoting budget-friendly Valentine's Day deals, offering discounts of up to 43% on select products, encouraging customers to purchase gifts and meal ingredients [1][5] - The company is providing a free chocolate bar to {N}power members on Valentine's Day, enhancing customer loyalty and engagement [2][9] - Natural Grocers is emphasizing homemade meal options for Valentine's Day, with healthy meal ideas starting at under $20 for two people [3] - The company is celebrating Crew Appreciation Month in February, offering exclusive discounts and donating 1% of Valentine's Day sales to support employees facing economic hardships [4] - Post-Valentine's Day, Natural Grocers will continue to offer discounts until February 22, 2025, across various product categories [5] Company Overview - Natural Grocers by Vitamin Cottage, Inc. is a specialty retailer of natural and organic groceries, founded in 1955, with a commitment to quality and community [7] - The company operates 168 stores across 21 states, focusing on affordable prices and a clean shopping environment [7] - In fiscal year 2024, Natural Grocers invested over $15 million in employee compensation and discretionary payments, reflecting its commitment to its workforce [7]

Financial Data and Key Metrics Changes - For Q1 2025, net sales increased by 9.4% year-over-year to $330.2 million, with daily average comparable store sales rising by 8.9% and 15.1% on a two-year basis [18][21] - Diluted earnings per share increased by 26.5% to $0.43, while net income rose by 28.1% to $9.9 million [22] - Adjusted EBITDA increased by 21.7% to $22.8 million, reflecting strong operating leverage [23] Business Line Data and Key Metrics Changes - Sales growth was broad-based across product categories, with dairy, meat, and produce being the strongest performing departments [20] - Natural Grocers brand products accounted for 8.9% of total sales, up from 8.5% a year ago, aided by the launch of 23 new items [12] Market Data and Key Metrics Changes - The company reported eight consecutive quarters of positive transaction count comps and four consecutive quarters with increases in items per basket [9][11] - The penetration of the NPower Rewards program reached 81%, up from 78% a year ago, indicating strong customer loyalty [11] Company Strategy and Development Direction - The company plans to open four to six new stores and relocate or remodel two to four stores during fiscal 2025, with a focus on store unit growth and development [13][24] - The company aims to align with consumer trends prioritizing health and sustainability, which is expected to drive future growth [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business trends and execution, leading to an increase in fiscal 2025 guidance for daily average comparable store sales growth and diluted earnings per share [24][25] - The company anticipates modest inflation throughout the year and expects year-over-year gross margin to remain relatively flat [26] Other Important Information - The company ended the first quarter with a strong liquidity position, including $6.3 million in cash and cash equivalents [23] - The company is committed to offering high-quality, affordable products while maintaining a focus on environmental and social impact [15][16] Q&A Session Summary Question: What are the offsets for gross margin remaining relatively flat? - Management noted that while there was a 50 basis point improvement in gross margin, future benefits from store occupancy leverage may diminish due to strong prior year comps and uncertainty regarding tariffs [31][32] Question: What is the outlook for free cash flow? - Management indicated that free cash flow movements were timing-driven, primarily related to accounts payable and the timing of payments for goods and services [36] Question: Why is the operating margin not higher compared to competitors? - Management explained that while sales expansion should lead to margin improvement, the focus on affordable pricing may limit margin growth compared to competitors [40][41] Question: Could the company open more than the planned four to six stores? - Management stated that while the current focus is on four to six stores for this year, they hope to increase that to six to eight stores in the following year [43] Question: Is there an increased focus on healthy eating benefiting the industry? - Management agreed that there is likely to be an increased focus on healthy eating, which would benefit the industry [48][49]

Core Insights - Natural Grocers by Vitamin Cottage, Inc. reported strong first quarter results for fiscal 2025, with significant growth in sales and earnings, leading to an increased outlook for the fiscal year [2][13]. Financial Performance - Net sales increased by $28.5 million, or 9.4%, to $330.2 million compared to the first quarter of fiscal 2024, driven by a $26.7 million increase in comparable store sales and a $2.9 million increase in new store sales [3][6]. - Daily average comparable store sales rose by 8.9% in the first quarter, with a two-year growth of 15.1%, supported by a 5.3% increase in transaction count and a 3.4% increase in transaction size [3][6]. - Net income increased by 28.1% to $9.9 million, with diluted earnings per share of $0.43, compared to $7.8 million and $0.34 per share in the prior year [8][6]. Gross and Operating Margins - Gross profit increased by $10.1 million, or 11.3%, to $98.8 million, with a gross margin improvement of 50 basis points to 29.9% [4][6]. - Operating income rose by 23.6% to $13.3 million, with an operating margin of 4.0%, up from 3.6% in the previous year [8][6]. Expense Management - Store expenses increased by 8.1% to $73.5 million, primarily due to higher compensation expenses, but as a percentage of net sales, they decreased to 22.3% from 22.5% [5][6]. - Administrative expenses rose by 22.4% to $11.5 million, influenced by higher compensation and technology expenses, with administrative expenses as a percentage of net sales increasing to 3.5% from 3.1% [7][6]. Cash Flow and Capital Expenditures - The company generated $2.7 million in cash from operations and invested $9.4 million in net capital expenditures during the first quarter [10][6]. - As of December 31, 2024, the company had $6.3 million in cash and cash equivalents, with $8.9 million in outstanding borrowings on its revolving credit facility [10][6]. Growth Strategy - The company relocated two stores during the first quarter and ended with 167 stores across 21 states, with one new store opened since December 31, 2024 [12][6]. - The updated fiscal 2025 outlook includes expectations for daily average comparable store sales growth of 5.0% to 7.0% and diluted earnings per share of $1.57 to $1.65 [13][6]. Dividend Announcement - The company declared a quarterly cash dividend of $0.12 per common share, payable on March 19, 2025, to stockholders of record on March 3, 2025 [11][6].

Exhibit 99.1 Natural Grocers by Vitamin Cottage Announces First Quarter Fiscal 2025 Results Raises Fiscal 2025 Outlook Lakewood, Colorado, February 6, 2025. Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) today announced results for its first quarter of fiscal 2025 ended December 31, 2024. Highlights for First Quarter Fiscal 2025 Compared to First Quarter Fiscal 2024 "We are very pleased with the strong start to our fiscal year 2025. Our first quarter results saw accelerating growth and a continuation ...

PART I. Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company presents its unaudited interim consolidated financial statements for the quarter ended December 31, 2024 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to $648.9 million while stockholders' equity increased to $181.9 million as of December 31, 2024 Consolidated Balance Sheets (in thousands) | | December 31, 2024 | September 30, 2024 | | :--- | :--- | :--- | | **Total current assets** | $144,525 | $147,058 | | **Total assets** | **$648,879** | **$655,476** | | **Total current liabilities** | $150,127 | $164,130 | | **Total liabilities** | **$467,003** | **$481,222** | | **Total stockholders' equity** | **$181,876** | **$174,254** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Net sales grew 9.4% to $330.2 million, driving a 28.1% increase in net income to $9.9 million for the quarter Consolidated Statements of Income (in thousands, except per share data) | | Three months ended Dec 31, 2024 | Three months ended Dec 31, 2023 | | :--- | :--- | :--- | | **Net sales** | $330,221 | $301,750 | | **Gross profit** | $98,824 | $88,760 | | **Operating income** | $13,348 | $10,803 | | **Net income** | **$9,938** | **$7,755** | | **Diluted EPS** | **$0.43** | **$0.34** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased significantly to $2.7 million, contributing to a $2.6 million net decrease in cash Consolidated Statements of Cash Flows (in thousands) | | Three months ended Dec 31, 2024 | Three months ended Dec 31, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $2,682 | $16,624 | | **Net cash used in investing activities** | ($9,417) | ($11,807) | | **Net cash provided by (used in) financing activities** | $4,180 | ($9,539) | | **Net decrease in cash and cash equivalents** | ($2,555) | ($4,722) | | **Cash and cash equivalents, end of period** | $6,316 | $13,620 | [Notes to Unaudited Interim Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) These notes detail accounting policies, revenue disaggregation by product category, dividend payments, and lease data - The company operated **167 stores** as of December 31, 2024, a decrease from 169 stores as of September 30, 2024[28](index=28&type=chunk) - The company paid a quarterly cash dividend of **$0.12 per share** in Q1 fiscal 2025, compared to $0.10 per share in Q1 fiscal 2024, which also included a **$1.00 special cash dividend**[56](index=56&type=chunk) Revenue by Product Category (in thousands) | | Three months ended Dec 31, 2024 | % of Net Sales | Three months ended Dec 31, 2023 | % of Net Sales | | :--- | :--- | :--- | :--- | :--- | | Grocery | $236,624 | 72% | $212,135 | 70% | | Dietary supplements | $61,531 | 18% | $59,974 | 20% | | Body care, pet care and other | $32,066 | 10% | $29,641 | 10% | | **Total** | **$330,221** | **100%** | **$301,750** | **100%** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 fiscal 2025 performance, highlighting strong sales growth, improved margins, and liquidity [Company Overview](index=20&type=section&id=Company%20Overview) The company operates 167 stores in 21 states and plans for new store openings and remodels in fiscal 2025 - As of December 31, 2024, the company operated **167 stores in 21 states**[85](index=85&type=chunk) - In fiscal year 2025, the company plans to open **four to six new stores** and relocate/remodel **two to four existing stores**[87](index=87&type=chunk) [Performance Highlights](index=20&type=section&id=Performance%20Highlights) Q1 fiscal 2025 performance featured a 9.4% net sales increase and a 28.1% rise in net income Q1 FY2025 Performance Highlights vs. Q1 FY2024 | Metric | Q1 FY2025 | Change | | :--- | :--- | :--- | | Net sales | $330.2 million | +9.4% | | Daily average comparable store sales | N/A | +8.9% | | Net income | $9.9 million | +28.1% | | EBITDA | $21.3 million | +16.7% | | Adjusted EBITDA | $22.8 million | +21.7% | [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Net sales rose 9.4% driven by comparable store sales, while gross margin improved to 29.9% - The **8.9% increase** in daily average comparable store sales was driven by a **5.3% increase** in daily average transaction count and a **3.4% increase** in daily average transaction size[105](index=105&type=chunk) - **Gross margin increased to 29.9%** from 29.4% in the prior year, primarily due to store occupancy cost leverage and higher product margin[106](index=106&type=chunk) Results of Operations (in thousands) | | Three months ended Dec 31, 2024 | Three months ended Dec 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | **Net sales** | $330,221 | $301,750 | 9.4% | | **Gross profit** | $98,824 | $88,760 | 11.3% | | **Operating income** | $13,348 | $10,803 | 23.6% | | **Net income** | $9,938 | $7,755 | 28.1% | [Non-GAAP Financial Measures](index=26&type=section&id=Non-GAAP%20financial%20measures) Non-GAAP measures show Adjusted EBITDA rose 21.7% to $22.8 million with an expanded margin of 6.9% Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) | | Three months ended Dec 31, 2024 | Three months ended Dec 31, 2023 | | :--- | :--- | :--- | | **Net income** | $9,938 | $7,755 | | Interest expense, net | 923 | 894 | | Provision for income taxes | 2,487 | 2,154 | | Depreciation and amortization | 7,950 | 7,451 | | **EBITDA** | **$21,298** | **$18,254** | | Impairment and store closing costs | 87 | 90 | | Share-based compensation | 1,435 | 406 | | **Adjusted EBITDA** | **$22,820** | **$18,750** | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through operations and its credit facility, with $61.4 million available for borrowing - As of December 31, 2024, the company had **$6.3 million in cash** and cash equivalents and **$61.4 million available for borrowing** under its Credit Facility[120](index=120&type=chunk) - The company plans to spend approximately **$26.6 million to $34.6 million on capital expenditures** during the remainder of fiscal year 2025[127](index=127&type=chunk) - The share repurchase program has **$8.1 million remaining** for future repurchases and will terminate on May 31, 2026[121](index=121&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the company's market risk position have occurred since the last annual report - There have been **no material changes** regarding the company's market risk position from the information provided in the most recent Form 10-K[138](index=138&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Based on an evaluation, the principal executive and financial officers concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2024[140](index=140&type=chunk) - There were **no changes in internal control** over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[141](index=141&type=chunk) PART II. Other Information [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any legal proceedings expected to have a material adverse effect - The company is involved in ordinary course legal proceedings but does not believe any currently pending case will have a **material adverse effect** on its financial statements[143](index=143&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's latest Form 10-K - There have been **no material changes** from the risk factors disclosed in Part I, Item 1A, of the company's Form 10-K[144](index=144&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with the Form 10-Q, including corporate documents and certifications - The exhibits index lists key corporate documents, officer certifications (302 and 906), and **XBRL data files** submitted with the report[147](index=147&type=chunk)

Join the celebration with giveaways, special savings, a sweepstakes, free samples and more!LAKEWOOD, Colo., Feb. 5, 2025 /PRNewswire/ -- Natural Grocers®, the leading family-operated organic and natural grocery retailer in the U.S., is thrilled to announce the opening of its newest store in Waco, TX, on Wednesday, February 19, 2025. Located at 601 N. Valley Mills Drive, Waco, TX 76710, this will be Natural Grocers' 25th store in Texas. Community members are invited to join the celebration with special givea ...

Snag up to 44% off party-pleasing essentials Feb. 6-9, 2025LAKEWOOD, Colo., Feb. 5, 2025 /PRNewswire/ -- Natural Grocers®, the nation's leading family-operated organic and natural grocery retailer, is gearing up for game day with unbeatable savings on all your must-have snacks and party essentials. Catch Natural Grocers 'Big Game Specials' Feb. 6-9, 2025. With up to 44% off Natural Grocers’ Always Affordable Prices, customers can win with big savings. And speaking of winning, one lucky customer will win ...

By staying true to its Five Founding Principles, Natural Grocers aims to create lasting, positive change. "At Natural Grocers, we see grocery stores as a vital link in the food chain — integral to the health of people and the planet," said Kemper Isely, co-president of Natural Grocers. "For nearly 70 years, Natural Grocers has been committed to driving change in how food is grown, raised and sold — and we remain as dedicated as ever. This year's sustainability report highlights our rigorous product standard ...

LAKEWOOD, Colo., Jan. 23, 2025 /PRNewswire/ -- Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) today announced that the Company will release its first quarter fiscal year 2025 financial results after the market close on Thursday, February 6, 2025. Following the release via the wire services, the Company will host a conference call with financial analysts and investors at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time). To participate in the conference call, dial 1-888-347-6606 (U.S.); 1-855-669-9657 ...

COMPATIBLE, COMPOSTABLE, & DOWNRIGHT DELICIOUSNatural Grocers' new coffee pods are compatible with most single-serve coffee makers. They're made with plant-based mesh filters and paper lids and are certified compostable at local industrial composting facilities.[i] The line is also packaged in 100% recycled paperboard boxes crafted with 30% post-consumer recycled materials. Additionally, the pods are Certified Organic and Certified Fair Trade, reflecting the company's dedication to responsible and ethical p ...