Group 1 - The analyst rated Natural Grocers by Vitamin Cottage (NYSE: NGVC) a "Hold" despite a valuation showing a 12% upside, anticipating discounted prices for the upcoming earnings release [1] - The analyst's investment strategy combines a top-down view of the global economy with a bottom-up analysis of individual companies, focusing on strong economies and quality companies with solid momentum [1] - The analyst has five years of experience in the investment field and holds an MBA in Macroeconomics and Portfolio Management, indicating a strong foundation in economic analysis [1] Group 2 - The article does not contain any specific financial data or performance metrics related to Natural Grocers or the broader industry [2][3]

Core Insights - Natural Grocers is celebrating its 70th anniversary with a special coffee launch, the Pecan Caramel Pie coffee, priced at $7.99 for a limited time during the anniversary event [1][4]. - The coffee is made from Fair Trade™ certified and organic ingredients, emphasizing the company's commitment to quality and ethical sourcing [2][6]. - The anniversary celebration includes various promotions, giveaways, and a sweepstakes with over $194,000 in prizes, including a Mustang Mach-E® Premium [4][11]. Product Details - The Pecan Caramel Pie coffee is described as rich, smooth, and perfect for various occasions, crafted by a trusted employee-owned roaster [2][6]. - The coffee will be available in a limited-edition 10 oz package featuring a disco-inspired design and a 70th anniversary seal [3][6]. - The product is made from 100% Arabica beans and is free from synthetic colors, artificial additives, and preservatives [7]. Company Overview - Natural Grocers, founded in 1955, operates 169 stores across 21 states, focusing on natural and organic groceries, body care products, and dietary supplements [6]. - The company adheres to strict quality guidelines, ensuring that its products do not contain artificial flavors, preservatives, or sweeteners [6]. - Natural Grocers is committed to community and employee welfare, having invested over $15 million in employee compensation in fiscal year 2024 [6].

Financial Data and Key Metrics Changes - Third quarter net sales increased by 6.3% year-over-year to $328.7 million, with daily average comparable store sales rising by 7.4% [11] - Operating income grew by 21.3% to $15.6 million, while net income increased by 26% to $11.6 million [13] - Diluted earnings per share rose by 25% to $0.50, and adjusted EBITDA increased by 10.1% to $24.4 million [13] Business Line Data and Key Metrics Changes - Daily average comparable transaction count increased by 4.8%, and transaction size grew by 2.4%, primarily due to modest product cost inflation [12] - Net sales penetration of the Empower Rewards program reached 82%, up from 80% a year ago, indicating improved customer loyalty [8] Market Data and Key Metrics Changes - Sales performance was strong across geographies and product categories, particularly in differentiated offerings like meat, dairy, and produce [6] - The company faced a temporary disruption in product distribution due to a cybersecurity incident with its primary distributor, UNFI, which adversely impacted net sales by approximately $3.5 million to $4 million [7] Company Strategy and Development Direction - The company plans to accelerate store unit growth, aiming to open six to eight new stores in fiscal 2026, with five future new stores already signed and negotiations ongoing for another five sites [9][10] - The revised outlook includes two new store openings and three store relocations or remodels, with capital expenditures projected between $30 million and $33 million [14] Management's Comments on Operating Environment and Future Outlook - Management has not observed any indicators of softer demand or trade down in consumer behavior despite monitoring trends closely [12] - The company remains focused on enhancing customer engagement through the Empower Rewards program and expanding its selection of Natural Grocers brand products [14] Other Important Information - The company ended the third quarter with $13.2 million in cash and cash equivalents, no outstanding borrowings, and $69.5 million available on its revolving credit facility [13] - The company celebrated its 70th anniversary, encouraging community engagement during the anniversary period [18] Q&A Session Summary - No questions were raised during the Q&A session, leading to a conclusion of the call [16]

Core Viewpoint - Natural Grocers By Vitamin Cottage reported strong profitability and comparable store performance in Q3 FY2025, despite a temporary supply chain disruption impacting sales [1][5][13] Financial Performance - Diluted earnings per share (GAAP) for Q3 FY2025 were $0.50, exceeding analyst expectations of $0.49, and representing a 25% increase year-over-year [2][5] - Revenue (GAAP) was $328.7 million, which was below the consensus estimate of $335.0 million, but showed a 6.3% increase from $309.1 million in Q3 FY2024 [2][5] - Adjusted EBITDA rose to $24.4 million, a 10.1% increase from the previous year [7] - Operating margin improved to 4.7%, up from 4.2% in Q3 FY2024 [7] - Net income (GAAP) grew 26% to $11.6 million [7] Operational Insights - Comparable store sales increased by 7.4%, driven by a 4.8% rise in transaction count and a 2.4% increase in average transaction size [6] - The company faced a one-time cybersecurity incident that reduced sales by approximately $3.5 million to $4.0 million, impacting daily average comparable store sales by 1.0–1.5 percentage points [5][11] Strategic Focus - Natural Grocers operates 169 stores across 21 states, emphasizing natural and organic products with strict product standards [3][4] - The company is focused on expanding free nutrition education programs and promoting environmental practices [4] - The Npower loyalty program achieved 81% penetration in sales in Q2 FY2025, contributing to customer engagement [10] Future Outlook - Management raised fiscal 2025 guidance, projecting comparable store sales growth of 7.25–7.75% and diluted EPS (GAAP) of $1.90–$1.95 [13] - Planned capital expenditures for FY2025 were adjusted to $30–33 million, reflecting a reduction in new store openings [13] - Six to eight new store openings are anticipated for FY2026 [13]

Executive Summary [Third Quarter Fiscal 2025 Highlights](index=1&type=section&id=Highlights%20for%20Third%20Quarter%20Fiscal%202025%20Compared%20to%20Third%20Quarter%20Fiscal%202024) Natural Grocers exceeded expectations in Q3 FY25, delivering strong results across key metrics including a 7.4% increase in daily average comparable sales and a 25% increase in diluted EPS, leading to an upward revision of the fiscal 2025 outlook. The company also managed a temporary disruption from a distributor's cybersecurity incident - Third quarter performance exceeded expectations with outstanding results across all key metrics, including daily average comparable sales growth of **7.4%** and a **25%** increase in diluted earnings per share[3](index=3&type=chunk) - The company raised its fiscal 2025 outlook for daily average comparable store sales growth and diluted earnings per share based on strong Q3 results[3](index=3&type=chunk) - A temporary cybersecurity incident at primary distributor United Natural Foods, Inc. (UNFI) adversely impacted Q3 FY25 daily average comparable store sales by **1.0 to 1.5 percentage points** and diluted EPS by **$0.04 to $0.05**, but operations have substantially normalized[3](index=3&type=chunk) Key Financial Highlights (Q3 FY25 vs Q3 FY24) | Metric | Q3 FY25 | Change YoY | | :-------------------------------- | :---------- | :--------- | | Net sales | $328.7 million | +6.3% | | Daily average comparable store sales growth | 7.4% | N/A | | Net income | $11.6 million | +26.0% | | Diluted earnings per share | $0.50 | +25.0% | | Adjusted EBITDA | $24.4 million | +10.1% | Operating Results [Third Quarter Fiscal 2025 Performance](index=1&type=section&id=Operating%20Results%20%E2%80%94%20Third%20Quarter%20Fiscal%202025%20Compared%20to%20Third%20Quarter%20Fiscal%202024) The company reported robust third-quarter results with significant increases in net sales, comparable store sales, gross profit, and net income, demonstrating strong operational leverage and effective promotional strategies despite a minor impact from a cybersecurity incident Third Quarter Fiscal 2025 Key Financials | Metric | Q3 FY25 (in millions) | Q3 FY24 (in millions) | YoY Change | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Net sales | $328.7 | $309.1 | +6.3% | | Daily average comparable store sales growth | 7.4% | N/A | N/A | | Gross profit | $98.3 | $90.3 | +8.8% | | Gross margin | 29.9% | 29.2% | +70 bps | | Operating income | $15.6 | $12.8 | +21.3% | | Operating margin | 4.7% | 4.2% | +50 bps | | Net income | $11.6 | $9.2 | +26.0% | | Diluted earnings per share | $0.50 | $0.40 | +25.0% | | Adjusted EBITDA | $24.4 | $22.2 | +10.1% | - The increase in gross margin was primarily attributed to **effective promotions**[5](index=5&type=chunk) - Store expenses as a percentage of net sales decreased to **21.8%** from **21.9%**, reflecting expense leverage[6](index=6&type=chunk) - Administrative expenses increased **14.7%** to **$10.9 million**, driven by higher technology and compensation expenses, rising to **3.3% of net sales** from **3.1%**[8](index=8&type=chunk) [First Nine Months Fiscal 2025 Performance](index=2&type=section&id=Operating%20Results%20%E2%80%94%20First%20Nine%20Months%20Fiscal%202025%20Compared%20to%20First%20Nine%20Months%20Fiscal%202024) For the first nine months of fiscal 2025, the company achieved substantial growth in net sales, comparable store sales, gross profit, and net income, reflecting sustained strong performance and improved operating efficiency First Nine Months Fiscal 2025 Key Financials | Metric | 9M FY25 (in millions) | 9M FY24 (in millions) | YoY Change | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Net sales | $994.7 | $918.9 | +8.2% | | Daily average comparable store sales growth | 8.4% | N/A | N/A | | Gross profit | $298.9 | $269.4 | +10.9% | | Gross margin | 30.0% | 29.3% | +70 bps | | Operating income | $46.5 | $34.9 | +33.2% | | Operating margin | 4.7% | 3.8% | +90 bps | | Net income | $34.6 | $24.9 | +39.0% | | Diluted earnings per share | $1.49 | $1.08 | +37.9% | | Adjusted EBITDA | $73.5 | $60.6 | +21.2% | - The increase in gross margin was driven by **higher product margin** primarily attributed to effective promotions, and **store occupancy cost leverage**[12](index=12&type=chunk) - Store expenses as a percentage of net sales decreased to **21.9%** from **22.3%**, reflecting expense leverage[13](index=13&type=chunk) - Administrative expenses increased **17.6%** to **$33.5 million**, primarily driven by higher compensation and technology expenses, rising to **3.4% of net sales** from **3.1%**[14](index=14&type=chunk) Financial Position and Capital Allocation [Balance Sheet and Cash Flow Summary](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) As of June 30, 2025, the company reported a healthy cash balance and no outstanding borrowings on its revolving credit facility, supported by strong cash generation from operations which funded capital expenditures for store growth - The Company had **$13.2 million** in cash and cash equivalents as of June 30, 2025[17](index=17&type=chunk) - There were no outstanding borrowings on its **$72.5 million** revolving credit facility[17](index=17&type=chunk) - During the first nine months of fiscal 2025, the Company generated **$39.7 million** in cash from operations[17](index=17&type=chunk) - Net capital expenditures for the first nine months of fiscal 2025 were **$22.9 million**, primarily for new and relocated/remodeled stores[17](index=17&type=chunk) [Dividend Announcement](index=2&type=section&id=Dividend%20Announcement) The company announced the declaration of a quarterly cash dividend of $0.12 per common share, payable in September 2025 - A quarterly cash dividend of **$0.12 per common share** was declared[18](index=18&type=chunk) - The dividend will be paid on September 17, 2025, to stockholders of record as of September 2, 2025[18](index=18&type=chunk) Growth and Outlook [Store Growth and Development](index=2&type=section&id=Growth%20and%20Development) The company ended the third quarter with 169 stores across 21 states and has recently remodeled one store, indicating ongoing investment in its retail footprint - The Company ended the third quarter with **169 stores** in **21 states**[19](index=19&type=chunk) - Since June 30, 2025, one store has been remodeled[19](index=19&type=chunk) [Fiscal 2025 and 2026 Outlook](index=3&type=section&id=Outlook) Natural Grocers has raised its fiscal 2025 outlook for comparable store sales growth and diluted EPS, while adjusting its store development plans and providing initial new store targets for fiscal 2026 Updated Fiscal 2025 and New Fiscal 2026 Outlook | Metric | Prior Outlook (FY25) | Updated Outlook (FY25) | Outlook (FY26) | | :--------------------------------- | :------------------- | :--------------------- | :------------- | | Number of new stores | 3 to 4 | 2 | 6 to 8 | | Number of relocations/remodels | 2 to 4 | 3 | N/A | | Daily average comparable store sales growth | 6.5% to 7.5% | 7.25% to 7.75% | N/A | | Diluted earnings per share | $1.78 to $1.86 | $1.90 to $1.95 | N/A | | Capital expenditures (in millions) | $36 to $44 | $30 to $33 | N/A | Company Overview and Disclosures [About Natural Grocers by Vitamin Cottage](index=3&type=section&id=About%20Natural%20Grocers%20by%20Vitamin%20Cottage) Natural Grocers is an expanding specialty retailer focused on natural and organic products, adhering to strict quality guidelines, offering nutrition education, and operating in a flexible, smaller-store format - Natural Grocers by Vitamin Cottage, Inc. is an expanding specialty retailer of natural and organic groceries, body care products, and dietary supplements[22](index=22&type=chunk) - The company adheres to **strict quality guidelines**, selling only USDA certified organic produce, exclusively pasture-raised, non-confinement dairy products, and free-range eggs, and avoiding artificial ingredients[22](index=22&type=chunk) - Natural Grocers offers **affordable prices** in a shopper-friendly retail environment and provides extensive **free science-based nutrition education programs**[22](index=22&type=chunk) - The company, founded in 1955, currently operates **169 stores** in **21 states**[22](index=22&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The release contains forward-looking statements based on management's current expectations, which are subject to various risks and uncertainties that could cause actual results to differ materially. The company disclaims any obligation to update these statements - Statements in the release are 'forward-looking statements' based on management's current expectations and are subject to uncertainty and changes in circumstances[24](index=24&type=chunk) - Actual results could differ materially due to various factors including political, economic, inflationary, competitive, market, and regulatory risks detailed in the Company's SEC filings (Form 10-K and 10-Q)[24](index=24&type=chunk)[25](index=25&type=chunk) - The Company undertakes no obligation to publicly update forward-looking statements, except as required by securities laws[24](index=24&type=chunk) Consolidated Financial Statements (GAAP) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) The consolidated statements of income show the company's revenues, expenses, and net income for the three and nine months ended June 30, 2025, highlighting significant year-over-year growth in profitability Consolidated Statements of Income (Selected Data) | Metric (in thousands) | Q3 FY25 | Q3 FY24 | 9M FY25 | 9M FY24 | | :-------------------- | :------ | :------ | :------ | :------ | | Net sales | $328,705 | $309,082 | $994,695 | $918,924 | | Gross profit | $98,279 | $90,331 | $298,851 | $269,448 | | Operating income | $15,587 | $12,847 | $46,488 | $34,911 | | Net income | $11,605 | $9,209 | $34,644 | $24,925 | | Diluted EPS | $0.50 | $0.40 | $1.49 | $1.08 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets provide a snapshot of the company's assets, liabilities, and stockholders' equity as of June 30, 2025, and September 30, 2024, indicating a stable financial structure with increased equity Consolidated Balance Sheets (Selected Data) | Metric (in thousands) | June 30, 2025 | September 30, 2024 | | :-------------------- | :------------ | :----------------- | | Total assets | $658,997 | $655,476 | | Total liabilities | $456,496 | $481,222 | | Total stockholders' equity | $202,501 | $174,254 | | Cash and cash equivalents | $13,178 | $8,871 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows detail the cash generated from operating, investing, and financing activities for the nine months ended June 30, 2025, showing positive cash flow from operations Consolidated Statements of Cash Flows (Selected Data) | Metric (in thousands) | 9M FY25 | 9M FY24 | | :-------------------------------- | :------ | :------ | | Net cash provided by operating activities | $39,677 | $49,280 | | Net cash used in investing activities | $(22,942) | $(31,808) | | Net cash used in financing activities | $(12,428) | $(21,899) | | Net increase (decrease) in cash | $4,307 | $(4,427) | | Cash and cash equivalents, end of period | $13,178 | $13,915 | Non-GAAP Financial Measures [EBITDA and Adjusted EBITDA Reconciliation](index=7&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) The company reconciles net income to EBITDA and Adjusted EBITDA, showing significant year-over-year growth in both non-GAAP measures for the third quarter and first nine months of fiscal 2025, reflecting improved operational performance EBITDA and Adjusted EBITDA Reconciliation | Metric (in thousands) | Q3 FY25 | Q3 FY24 | 9M FY25 | 9M FY24 | | :-------------------- | :------ | :------ | :------ | :------ | | Net income | $11,605 | $9,209 | $34,644 | $24,925 | | EBITDA | $23,540 | $20,692 | $70,279 | $57,909 | | Adjusted EBITDA | $24,385 | $22,156 | $73,500 | $60,635 | - EBITDA increased **13.8%** to **$23.5 million** for Q3 FY25 and **21.4%** to **$70.3 million** for 9M FY25[35](index=35&type=chunk) - Adjusted EBITDA increased **10.1%** to **$24.4 million** for Q3 FY25 and **21.2%** to **$73.5 million** for 9M FY25[36](index=36&type=chunk) [Management's Rationale and Limitations](index=7&type=section&id=Management%20believes%20some%20investors'%20understanding%20of%20our%20performance%20is%20enhanced%20by%20including%20EBITDA%20and%20Adjusted%20EBITDA) Management uses EBITDA and Adjusted EBITDA as supplemental measures to assess operating performance and compare store performance consistently, but acknowledges their limitations as analytical tools that do not represent cash expenditures or substitute for GAAP results - Management believes EBITDA and Adjusted EBITDA enhance understanding of operating performance by removing non-cash depreciation/amortization and items not directly from core operations, assisting in consistent store performance comparison[37](index=37&type=chunk)[38](index=38&type=chunk) - EBITDA is a component of a measure in the company's financial covenants under its credit facility[37](index=37&type=chunk) - Limitations include not reflecting cash expenditures for capital, working capital, debt service, or taxes, and not accounting for asset replacement costs, thus they should not be considered in isolation or as a substitute for GAAP results[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)

Core Viewpoint - Natural Grocers by Vitamin Cottage, Inc. reported strong third-quarter results for fiscal 2025, leading to an increase in its fiscal outlook for daily average comparable store sales growth and diluted earnings per share [2][19]. Financial Performance - Net sales for the third quarter of fiscal 2025 increased by $19.6 million, or 6.3%, to $328.7 million compared to the same period in fiscal 2024, driven by a $19.0 million increase in comparable store sales [3][7]. - Daily average comparable store sales grew by 7.4%, with a 4.8% increase in daily average transaction count and a 2.4% increase in daily average transaction size [3]. - Net income rose by 26.0% to $11.6 million, resulting in diluted earnings per share of $0.50, compared to $9.2 million and $0.40 per share in the third quarter of fiscal 2024 [8][7]. Operating Results - Gross profit for the third quarter increased by $7.9 million, or 8.8%, to $98.3 million, with a gross margin of 29.9%, up from 29.2% in the prior year [4]. - Operating income increased by 21.3% to $15.6 million, with an operating margin of 4.7%, compared to 4.2% in the third quarter of fiscal 2024 [8]. - Adjusted EBITDA for the third quarter was $24.4 million, a 10.1% increase from $22.2 million in the same quarter of fiscal 2024 [9][34]. Expense Management - Store expenses rose by 6.1% to $71.7 million, but as a percentage of net sales, they decreased to 21.8% from 21.9% in the prior year, indicating expense leverage [5]. - Administrative expenses increased by 14.7% to $10.9 million, with a rise in technology and compensation costs, leading to an increase in administrative expenses as a percentage of net sales to 3.3% from 3.1% [6][12]. Outlook - The company raised its fiscal 2025 outlook for daily average comparable store sales growth to a range of 7.25% to 7.75% and diluted earnings per share to $1.90 to $1.95 [19]. - The updated outlook for the number of new stores is now 2, down from a previous estimate of 3 to 4, while the number of relocations/remodels is updated to 3 [19]. Balance Sheet and Cash Flow - As of June 30, 2025, the company had $13.2 million in cash and cash equivalents, with no outstanding borrowings on its $72.5 million revolving credit facility [16]. - The company generated $39.7 million in cash from operations during the first nine months of fiscal 2025 [16]. Growth and Development - The company ended the third quarter with 169 stores across 21 states and has remodeled one store since June 30, 2025 [18].

PART I. Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements, including balance sheets, income statements, cash flows, and equity changes, are presented with detailed accounting notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) **Consolidated Balance Sheet Highlights (Dollars in thousands):** | Metric | June 30, 2025 | September 30, 2024 | | :-------------------------- | :-------------- | :----------------- | | Total Assets | $658,997 | $655,476 | | Total Liabilities | $456,496 | $481,222 | | Total Stockholders' Equity | $202,501 | $174,254 | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) **Consolidated Statements of Income Highlights (Dollars in thousands, except per share data):** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net sales | $328,705 | $309,082 | $994,695 | $918,924 | | Gross profit | $98,279 | $90,331 | $298,851 | $269,448 | | Operating income | $15,587 | $12,847 | $46,488 | $34,911 | | Net income | $11,605 | $9,209 | $34,644 | $24,925 | | Basic EPS | $0.51 | $0.40 | $1.51 | $1.09 | | Diluted EPS | $0.50 | $0.40 | $1.49 | $1.08 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) **Consolidated Statements of Cash Flows Highlights (Nine months ended June 30, Dollars in thousands):** | Metric | 2025 | 2024 | | :------------------------------------------ | :------- | :------- | | Net cash provided by operating activities | $39,677 | $49,280 | | Net cash used in investing activities | $(22,942) | $(31,808) | | Net cash used in financing activities | $(12,428) | $(21,899) | | Net increase (decrease) in cash and cash equivalents | $4,307 | $(4,427) | | Cash and cash equivalents, end of period | $13,178 | $13,915 | [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) **Total Stockholders' Equity (Dollars in thousands):** | Date | Amount | | :-------------------- | :------- | | June 30, 2025 | $202,501 | | September 30, 2024 | $174,254 | [Notes to Unaudited Interim Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) [1. Organization](index=10&type=section&id=Note%201.%20Organization) Natural Grocers operates 169 retail stores across 21 states, specializing in natural and organic products - Operates **169 stores** in **21 states** as of June 30, 2025[26](index=26&type=chunk) - Specializes in natural and organic groceries, dietary supplements, and body care products[26](index=26&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Financial statements adhere to GAAP, with the company operating as a single segment, adopting recent ASUs without material impact - Financial statements prepared in accordance with U.S. GAAP for interim statements[27](index=27&type=chunk) - Company has a single reporting segment: natural and organic retail stores[29](index=29&type=chunk) - Adopted ASU 2023-01 (Common Control Arrangements) and ASU 2016-13 (Credit Losses) with no material impact[31](index=31&type=chunk)[32](index=32&type=chunk) - Evaluating impact of ASU 2023-07 (Segment Disclosures), ASU 2023-09 (Income Tax Disclosures), and ASU 2024-03 (Income Statement Expense Disaggregation) for future periods[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [3. Revenue Recognition](index=11&type=section&id=Note%203.%20Revenue%20Recognition) Revenue is recognized at point of sale; gift cards and rewards are liabilities, with grocery sales as the largest segment - Revenue recognized at point of sale when control of goods is transferred[37](index=37&type=chunk)[38](index=38&type=chunk) - Gift card proceeds recorded as liability until redemption[39](index=39&type=chunk) **Contract Liabilities for Unredeemed Gift Cards (Dollars in thousands):** | Date | Amount | | :-------------------- | :------- | | June 30, 2025 | $1,700 | | September 30, 2024 | $1,500 | **Revenue by Product Category (Three months ended June 30, Dollars in thousands):** | Category | 2025 Amount | 2025 % of Net Sales | 2024 Amount | 2024 % of Net Sales | | :-------------------------- | :---------- | :------------------ | :---------- | :------------------ | | Grocery | $235,286 | 72% | $219,040 | 71% | | Dietary supplements | $61,988 | 19% | $59,966 | 19% | | Body care, pet care and other | $31,431 | 9% | $30,076 | 10% | | **Total** | **$328,705** | **100%** | **$309,082** | **100%** | [4. Earnings Per Share](index=12&type=section&id=Note%204.%20Earnings%20Per%20Share) Basic EPS uses weighted average shares, while diluted EPS includes potential dilution from unvested restricted stock units **Earnings Per Share (EPS) (Dollars in thousands, except per share data):** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income | $11,605 | $9,209 | $34,644 | $24,925 | | Basic EPS | $0.51 | $0.40 | $1.51 | $1.09 | | Diluted EPS | $0.50 | $0.40 | $1.49 | $1.08 | [5. Debt](index=13&type=section&id=Note%205.%20Debt) The $72.5 million credit facility, amended in November 2023, has no outstanding loans and includes dividend restrictions - Credit Facility aggregate revolving commitment: **$72.5 million** as of June 30, 2025[44](index=44&type=chunk) - No revolving loan amounts outstanding under the Credit Facility as of June 30, 2025 and September 30, 2024[47](index=47&type=chunk) **Available for Borrowing under Credit Facility (Dollars in millions):** | Date | Amount | | :-------------------- | :------- | | June 30, 2025 | $69.5 | | September 30, 2024 | $72.8 | - Credit Facility amended in November 2023 to increase revolving commitments to **$75.0 million** and extend maturity to November 16, 2028[46](index=46&type=chunk) - Company was in compliance with all covenants under the Credit Facility as of June 30, 2025 and September 30, 2024[48](index=48&type=chunk) **Gross Interest Expense (Dollars in thousands):** | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three months ended June 30 | $800 | $1,200 | | Nine months ended June 30 | $2,500 | $3,400 | [6. Stockholders' Equity](index=15&type=section&id=Note%206.%20Stockholders'%20Equity) Share repurchase program extended to May 2026 with $8.1 million remaining; quarterly dividends increased, and a special dividend was paid - Share repurchase program extended to May 31, 2026, with **$8.1 million** remaining[52](index=52&type=chunk) - No share repurchases during the three and nine months ended June 30, 2025 and 2024[53](index=53&type=chunk) - Quarterly cash dividend: **$0.12 per share** in FY2025, up from **$0.10 per share** in FY2024[54](index=54&type=chunk) - Special cash dividend of **$1.00 per share** paid in the first quarter of fiscal year 2024[54](index=54&type=chunk) - Accelerated vesting of restricted stock units for former CFO resulted in **$0.5 million** incremental share-based compensation expense[55](index=55&type=chunk) [7. Leases](index=15&type=section&id=Note%207.%20Leases) The Company leases most stores and facilities, classifying them as operating or finance leases, with related party leases totaling $8.6 million in assets - Leases most of its stores, a bulk food repackaging facility, and administrative offices[56](index=56&type=chunk) - Lease terms generally range from **10 to 25 years**, with renewal options typically in **5 to 10-year increments**[56](index=56&type=chunk)[58](index=58&type=chunk) - Related party operating leases with Chalet Properties, LLC, Isely Family Land Trust LLC, and FTVC, LLC[65](index=65&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) **Related Party Operating Leases (Dollars in thousands):** | Metric | June 30, 2025 | | :-------------------------- | :-------------- | | Operating lease assets | $8,600 | | Operating lease liabilities | $8,800 | **Total Lease Cost (Dollars in thousands):** | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three months ended June 30 | $15,654 | $15,400 | | Nine months ended June 30 | $46,543 | $46,129 | **Weighted-Average Remaining Lease Term (in years):** | Lease Type | June 30, 2025 | September 30, 2024 | | :-------------------- | :-------------- | :----------------- | | Operating leases | 9.4 | 9.8 | | Finance leases | 14.0 | 13.7 | **Future Undiscounted Lease Payments (Dollars in thousands):** | Lease Type | Total Future Undiscounted Lease Payments | | :-------------------- | :------------------------------------- | | Operating leases | $350,074 | | Finance leases | $65,997 | [8. Property and Equipment](index=18&type=section&id=Note%208.%20Property%20and%20Equipment) Net property and equipment increased to $181.0 million as of June 30, 2025, with total depreciation and amortization expense at $23.8 million **Property and Equipment, Net (Dollars in thousands):** | Date | Amount | | :-------------------- | :------- | | June 30, 2025 | $181,037 | | September 30, 2024 | $178,609 | **Total Depreciation and Amortization Expense (Dollars in thousands):** | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three months ended June 30 | $7,953 | $7,845 | | Nine months ended June 30 | $23,791 | $22,998 | [9. Other Assets](index=19&type=section&id=Note%209.%20Other%20Assets) Total other assets significantly increased to $4.2 million, primarily due to higher implementation costs for software hosting arrangements **Total Other Assets (Dollars in thousands):** | Date | Amount | | :-------------------- | :------- | | June 30, 2025 | $4,218 | | September 30, 2024 | $458 | **Amortizable Other Assets, Net (Implementation costs for software hosting arrangements, Dollars in thousands):** | Date | Amount | | :-------------------- | :------- | | June 30, 2025 | $3,950 | | September 30, 2024 | $171 | [10. Goodwill and Other Intangible Assets](index=19&type=section&id=Note%2010.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill and other intangible assets, net, decreased to $12.2 million due to amortization, while goodwill remained constant **Total Goodwill and Other Intangibles, Net (Dollars in thousands):** | Date | Amount | | :-------------------- | :------- | | June 30, 2025 | $12,195 | | September 30, 2024 | $13,488 | **Amortizable Intangible Assets, Net (Dollars in thousands):** | Date | Amount | | :-------------------- | :------- | | June 30, 2025 | $6,592 | | September 30, 2024 | $7,832 | - Goodwill remained constant at **$5,198 thousand** for both periods[73](index=73&type=chunk) [11. Accrued Expenses](index=20&type=section&id=Note%2011.%20Accrued%20Expenses) Total accrued expenses decreased to $31.5 million, mainly due to reductions in payroll and tax-related liabilities **Total Accrued Expenses (Dollars in thousands):** | Date | Amount | | :-------------------- | :------- | | June 30, 2025 | $31,481 | | September 30, 2024 | $35,847 | **Key Components of Accrued Expenses (Dollars in thousands):** | Component | June 30, 2025 | September 30, 2024 | | :------------------------------------ | :-------------- | :----------------- | | Payroll and employee-related expenses | $18,688 | $21,874 | | Accrued property, sales, and use tax payable | $8,029 | $9,607 | [12. Income Taxes](index=20&type=section&id=Note%2012.%20Income%20Taxes) Income taxes are accounted for under ASC 740, with the OBBBA not expected to materially impact financial statements for the period - Income taxes are accounted for in accordance with FASB ASC Topic 740[75](index=75&type=chunk) - The U.S. federal government enacted the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, which is being evaluated but not expected to have a material impact on consolidated financial statements for the periods ended June 30, 2025[76](index=76&type=chunk) [13. Related Party Transactions](index=20&type=section&id=Note%2013.%20Related%20Party%20Transactions) The Company has ongoing operating lease agreements with related parties, with rent payments totaling $0.6 million for the three and nine months ended June 30 - Has five operating leases with Chalet Properties, LLC, owned by the Company's non-independent Board members and other related family members[77](index=77&type=chunk) - Has one operating lease with Isely Family Land Trust LLC[78](index=78&type=chunk) - Has one operating lease with FTVC, LLC, owned by the Company's non-independent Board members and other related family members[79](index=79&type=chunk) **Rent Paid to Related Parties (Dollars in millions):** | Related Party | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Chalet Properties, LLC | $0.2 | $0.2 | $0.6 | $0.6 | | Isely Family Land Trust LLC | $0.1 | $0.1 | $0.2 | $0.2 | | FTVC, LLC | < $0.1 | < $0.1 | < $0.1 | < $0.1 | [14. Commitments and Contingencies](index=20&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) The Company is self-insured for certain losses and involved in legal proceedings, but management anticipates no material adverse effects - The Company is self-insured for certain losses, liabilities, and employee benefit costs[80](index=80&type=chunk) - Periodically involved in various legal proceedings, including labor and employment-related claims and customer injury claims[81](index=81&type=chunk) - Management does not believe any currently pending legal proceeding will have a material adverse effect on its financial statements[81](index=81&type=chunk) [15. Subsequent Event](index=22&type=section&id=Note%2015.%20Subsequent%20Event) On August 6, 2025, the Board approved a quarterly cash dividend of $0.12 per share, payable on September 17, 2025 - On August 6, 2025, the Board approved the payment of a quarterly cash dividend of **$0.12 per share** of common stock, to be paid on September 17, 2025[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, including business overview, performance, industry trends, outlook, and key metrics [Company Overview](index=23&type=section&id=Company%20Overview) The Company operates 169 stores in 21 states, focusing on natural and organic products, with plans for new store openings and remodels - Operates **169 stores** in **21 states** as of June 30, 2025, specializing in natural and organic groceries, dietary supplements, and body care products[85](index=85&type=chunk) - Increased store count at a compound annual growth rate of **2.0%** over the five fiscal years ended September 30, 2024[87](index=87&type=chunk) - Plans to open **two new stores** and relocate/remodel **three existing stores** in fiscal year 2025[87](index=87&type=chunk) - During the nine months ended June 30, 2025, opened **two new stores**, relocated/remodelled **two existing stores**, and closed **two stores**[87](index=87&type=chunk) [Performance Highlights](index=23&type=section&id=Performance%20Highlights) Key performance highlights include net sales growth of 6.3% and 8.2% for the three and nine months ended June 30, 2025, respectively **Key Performance Highlights (YoY Growth):** | Metric | Three months ended June 30, 2025 | Nine months ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :------------------------------ | | Net sales growth | 6.3% | 8.2% | | Daily average comparable store sales growth | 7.4% | 8.4% | | Net income growth | 26.0% | 39.0% | | EBITDA growth | 13.8% | 21.4% | | Adjusted EBITDA growth | 10.1% | 21.2% | - Net sales for the three months ended June 30, 2025, were adversely impacted by approximately **$3.5 million to $4.0 million** due to a UNFI cybersecurity incident[108](index=108&type=chunk)[96](index=96&type=chunk) - Diluted earnings per share for the three months ended June 30, 2025, was adversely impacted by **$0.04 to $0.05** due to the UNFI cybersecurity incident[96](index=96&type=chunk) [Industry Trends and Economics](index=24&type=section&id=Industry%20Trends%20and%20Economics) Sales are influenced by economic conditions, labor challenges, supply chain issues, and intense competition in the natural and organic industry - The grocery industry and Company sales are affected by general economic conditions, including consumer spending, disposable income, interest rates, inflation/deflation, and the political environment[89](index=89&type=chunk) - Experienced labor market challenges and increased wages for store Crew members due to labor shortages in the retail industry[89](index=89&type=chunk) - Global supply chain issues have led to product shortages and delivery delays, with mitigation efforts underway[89](index=89&type=chunk) - The natural and organic grocery and dietary supplements industry continues to grow, driven by increased public interest in health and nutrition[91](index=91&type=chunk) - Faces intense competition in a large, fragmented, and highly competitive industry, including from industry consolidation and expansion by existing competitors[91](index=91&type=chunk) [Outlook](index=25&type=section&id=Outlook) The Company anticipates continued growth driven by its loyal customer base, increasing transaction size, and differentiated shopping experience - Believes key factors like a loyal customer base, increasing transaction size, growing consumer interest in nutrition, and a differentiated shopping experience will drive comparable store sales and profitable expansion[93](index=93&type=chunk) - New store unit growth rate in the foreseeable future will depend on economic and business conditions, construction permitting, and availability of materials, equipment, and labor[94](index=94&type=chunk) - Identifies opportunities for increased leverage of costs and economies of scale in sourcing products[94](index=94&type=chunk) [Key Financial Metrics in Our Business](index=25&type=section&id=Key%20Financial%20Metrics%20in%20Our%20Business) This section defines key financial metrics such as net sales, daily average comparable store sales, cost of goods sold, and gross profit - Net sales are comprised of gross sales net of discounts, in-house coupons, returns, and allowances[96](index=96&type=chunk) - Daily average comparable store sales include sales from stores in the comparable store base for a reporting period against sales from the same stores for the same number of operating months in the prior fiscal year, including remodeled or relocated stores[97](index=97&type=chunk) - A cybersecurity incident at primary distributor UNFI in June 2025 adversely impacted daily average comparable store sales by **1.0 to 1.5 percentage points** and diluted EPS by **$0.04 to $0.05** for the three months ended June 30, 2025[96](index=96&type=chunk) - Cost of goods sold and occupancy costs include inventory cost, shipping and handling, distribution, buying, shrink expense, third-party delivery fees, and store occupancy costs[99](index=99&type=chunk) - Gross profit is net sales less cost of goods sold and occupancy costs; gross margin is gross profit as a percentage of net sales[100](index=100&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) **Statements of Income Data as a Percentage of Net Sales:** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net sales | 100.0% | 100.0% | 100.0% | 100.0% | | Cost of goods sold and occupancy costs | 70.1% | 70.8% | 70.0% | 70.7% | | Gross profit | 29.9% | 29.2% | 30.0% | 29.3% | | Store expenses | 21.8% | 21.9% | 21.9% | 22.3% | | Administrative expenses | 3.3% | 3.1% | 3.4% | 3.1% | | Pre-opening expenses | 0.0% | 0.1% | 0.1% | 0.1% | | Operating income | 4.7% | 4.2% | 4.7% | 3.8% | | Interest expense, net | (0.2)% | (0.3)% | (0.2)% | (0.3)% | | Income before income taxes | 4.5% | 3.8% | 4.4% | 3.5% | | Provision for income taxes | (1.0)% | (0.8)% | (1.0)% | (0.7)% | | Net income | 3.5% | 3.0% | 3.5% | 2.7% | **Other Operating Data:** | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Number of stores at end of period | 169 | 168 | | Twelve-month store unit growth rate | 0.6% | 2.4% | | Change in daily average comparable store sales | 7.4% | 7.2% | [Three months ended June 30, 2025 vs. 2024](index=28&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20three%20months%20ended%20June%2030%2C%202024) Net sales rose **6.3%** to **$328.7 million**, driven by **7.4%** comparable store sales growth, leading to **26.0%** net income increase **Key Financial Results (Three months ended June 30, Dollars in thousands, except per share data):** | Metric | 2025 | 2024 | Change (Dollars) | Change (%) | | :-------------------------- | :------- | :------- | :--------------- | :--------- | | Net sales | $328,705 | $309,082 | $19,623 | 6.3% | | Gross profit | $98,279 | $90,331 | $7,948 | 8.8% | | Operating income | $15,587 | $12,847 | $2,740 | 21.3% | | Net income | $11,605 | $9,209 | $2,396 | 26.0% | | Diluted EPS | $0.50 | $0.40 | $0.10 | 25.0% | - Daily average comparable store sales increased **7.4%**, driven by a **4.8%** increase in daily average transaction count and a **2.4%** increase in daily average transaction size[108](index=108&type=chunk) - Gross margin increased to **29.9%** (2025) from **29.2%** (2024), primarily attributed to higher product margin from effective promotions[109](index=109&type=chunk) - Administrative expenses increased **14.7%** to **$10.9 million**, driven by higher technology expenses and compensation expenses[111](index=111&type=chunk) [Nine months ended June 30, 2025 vs. 2024](index=29&type=section&id=Nine%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20nine%20months%20ended%20June%2030%2C%202024) Net sales increased **8.2%** to **$994.7 million**, with **8.4%** comparable store sales growth, driving **39.0%** net income surge **Key Financial Results (Nine months ended June 30, Dollars in thousands, except per share data):** | Metric | 2025 | 2024 | Change (Dollars) | Change (%) | | :-------------------------- | :------- | :------- | :--------------- | :--------- | | Net sales | $994,695 | $918,924 | $75,771 | 8.2% | | Gross profit | $298,851 | $269,448 | $29,403 | 10.9% | | Operating income | $46,488 | $34,911 | $11,577 | 33.2% | | Net income | $34,644 | $24,925 | $9,719 | 39.0% | | Diluted EPS | $1.49 | $1.08 | $0.41 | 37.9% | - Daily average comparable store sales increased **8.4%**, resulting from a **5.4%** increase in daily average transaction count and a **2.9%** increase in daily average transaction size[117](index=117&type=chunk) - Gross margin increased to **30.0%** (2025) from **29.3%** (2024), driven by higher product margin from effective promotions and store occupancy cost leverage[118](index=118&type=chunk) - Administrative expenses increased **17.6%** to **$33.5 million**, driven by higher compensation expenses (including costs related to the Chief Financial Officer transition) and technology expenses[120](index=120&type=chunk) [Non-GAAP Financial Measures (EBITDA and Adjusted EBITDA)](index=30&type=section&id=Non-GAAP%20financial%20measures) This section defines and presents EBITDA and Adjusted EBITDA, key non-GAAP financial measures used to assess the Company's operating performance **EBITDA and Adjusted EBITDA (Dollars in thousands):** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | EBITDA | $23,540 | $20,692 | $70,279 | $57,909 | | Adjusted EBITDA | $24,385 | $22,156 | $73,500 | $60,635 | **EBITDA and Adjusted EBITDA as a Percentage of Net Sales:** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | EBITDA % of Net Sales | 7.2% | 6.7% | 7.1% | 6.3% | | Adjusted EBITDA % of Net Sales | 7.4% | 7.2% | 7.4% | 6.6% | - EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, and amortization[125](index=125&type=chunk) - Adjusted EBITDA further excludes impairment charges, store closing costs, share-based compensation, and amortization of software hosting arrangement (SaaS) implementation costs[125](index=125&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The Company's liquidity position includes $13.2 million in cash and $69.5 million available under its credit facility, with changes in cash flows detailed **Liquidity Position (Dollars in millions):** | Metric | June 30, 2025 | | :-------------------------- | :-------------- | | Cash and cash equivalents | $13.2 | | Available for borrowing under Credit Facility | $69.5 | **Cash Flow Summary (Nine months ended June 30, Dollars in thousands):** | Activity | 2025 | 2024 | | :------------------------------------------ | :------- | :------- | | Net cash provided by operating activities | $39,677 | $49,280 | | Net cash used in investing activities | $(22,942) | $(31,808) | | Net cash used in financing activities | $(12,428) | $(21,899) | - Net cash provided by operating activities decreased by **$9.6 million (19.5%)** for the nine months ended June 30, 2025, compared to the prior year[139](index=139&type=chunk) - Net cash used in investing activities decreased by **$8.9 million (27.9%)** for the nine months ended June 30, 2025, primarily due to decreases in acquisitions of property and equipment and other intangibles[140](index=140&type=chunk) - Plans to spend approximately **$7.1 million to $10.1 million** on capital expenditures during the remainder of fiscal year 2025, primarily for new store openings and relocations/remodels[141](index=141&type=chunk) [Critical Accounting Policies](index=34&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies, including income taxes, asset impairment, and leases, involve significant judgments and estimates - Critical accounting policies include accounting for income taxes, impairment of long-lived assets, and leases, which involve significant judgments and estimates[152](index=152&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes have occurred in the Company's market risk position since the information provided in its annual Form 10-K - No material changes regarding the Company's market risk position from the information provided in its Annual Report on Form 10-K[153](index=153&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[155](index=155&type=chunk) - No material changes in internal control over financial reporting during the most recent fiscal quarter[156](index=156&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in various legal proceedings, but management does not anticipate any material adverse effects on its financial condition - Periodically involved in various legal proceedings, including labor and employment-related claims, customer personal injury claims, and investigations[159](index=159&type=chunk) - Management does not believe any currently pending legal proceeding will have a material adverse effect on its business, prospects, financial condition, cash flows, or results of operations[159](index=159&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight potential adverse impacts of new or increased tariffs on foreign-sourced goods, affecting costs and competitive position - New or increased tariffs on foreign-sourced goods or materials could have a material adverse effect on the Company's business, financial condition, and results of operations[161](index=161&type=chunk) - Tariffs may cause higher costs to procure products, potentially requiring price increases and adversely affecting competitive position[161](index=161&type=chunk) - A prolonged trade conflict could result in adverse and uncertain economic conditions and negatively impact demand for products[161](index=161&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including corporate governance documents, executive certifications, and Inline XBRL financial statements - Includes certifications of principal executive officers and principal financial officer required under the Sarbanes-Oxley Act of 2002[163](index=163&type=chunk) - Consolidated financial statements are formatted in Inline XBRL (eXtensible Business Reporting Language)[163](index=163&type=chunk) [SIGNATURES](index=37&type=section&id=SIGNATURES) The report is signed by Kemper Isely, Co-President, and Richard Hallé, CFO, on behalf of Natural Grocers by Vitamin Cottage, Inc - Signed by Kemper Isely, Co-President (Principal Executive Officer)[167](index=167&type=chunk) - Signed by Richard Hallé, Chief Financial Officer (Principal Financial and Accounting Officer)[167](index=167&type=chunk) - Report signed on August 7, 2025[165](index=165&type=chunk)

Company Overview - Natural Grocers, founded in 1955, is a specialty retailer of natural and organic groceries, body care products, and dietary supplements, with a commitment to high-quality standards [8] - The company operates 169 stores across 21 states, including its expansion into Missouri, where it has established seven stores since 2011 [11] Expansion in Missouri - Natural Grocers opened its first store in Missouri in Columbia in 2011 and has since added six more locations, with the latest store opening in Springfield in 2021 [1] - The company emphasizes its family-operated nature and community roots, aligning its values with the culture and community spirit of Missouri [2] Customer Engagement and Promotions - To celebrate Missouri Statehood Day, Natural Grocers will offer promotions for {N}power members, including a free reusable shopping bag and a $5-off coupon from August 10 to August 12, 2025 [3][9] - The {N}power program is a free customer rewards initiative that provides exclusive discounts and rewards points for members [4] Employee Commitment - Natural Grocers employs approximately 125 crew members in Missouri and is dedicated to their physical, emotional, and financial well-being through various support programs and benefits [5] - In fiscal year 2024, the company invested over $15 million in compensation and discretionary payments for its crew [8] Product Standards - The company adheres to strict quality guidelines, ensuring that its grocery products do not contain artificial ingredients and are USDA-certified organic [8]

Core Points - Natural Grocers is celebrating the 10-year anniversary of its Scottsdale Rd. store with exclusive offers for {N}power members from August 8 to 10, 2025 [1][2] - The company has been serving Arizona communities since its expansion in 2012, with the Scottsdale Rd. store opening in August 2015 [3] - The anniversary celebration includes special deals and in-store festivities as a thank you to the community for their support over the past decade [4] Exclusive Offers - On August 8, {N}power members will receive a surprise offer via email or mobile app, valid from August 8 to 10 [5] - From August 8 to 10, customers can access $10 deals and can sign up for {N}power for free through various methods [6] - Specific offers include 2 for $10 on selected Natural Grocers Brand products and 6 for $10 on organic beverages [8][10] Company Overview - Natural Grocers, founded in 1955, is a specialty retailer of natural and organic groceries, body care products, and dietary supplements, with strict quality guidelines [7] - The company operates 169 stores across 21 states and is committed to its Five Founding Principles, including community and crew commitments [7] - In fiscal year 2024, Natural Grocers invested over $15 million in compensation and discretionary payments for its crew [7]

Core Insights - Natural Grocers is celebrating its 70th anniversary, emphasizing its commitment to quality products and community values established by its founders in 1955 [1][2][3] - The company operates 169 stores across 21 states, maintaining a focus on organic and natural products that meet strict quality standards [3][10] Anniversary Celebration Details - The anniversary event will take place from August 14 to 16, featuring discounts of up to 60% on over 500 products [7] - Customers can participate in various giveaways, including a chance to win a Mustang Mach-E® Premium or $47,000 cash, along with other prizes totaling over $194,000 [5][16] - Special promotions include free snow cones, popcorn, and limited-edition products like the Pecan Caramel Pie coffee blend priced at $7.99 for 10 ounces [6][7] Community Engagement - On August 14, 1% of all sales will be donated to the Heroes in Aprons Fund, supporting Natural Grocers employees facing unexpected hardships [8][12] - The company continues to uphold its Five Founding Principles, including a commitment to community and crew, with significant investments in employee compensation [10]