Financial Performance - Net sales for the year ended September 30, 2025, increased to $1,330,836 thousand, a 7.2% increase from $1,241,585 thousand in 2024[315] - Gross profit rose to $397,877 thousand in 2025, up 9.1% from $364,810 thousand in 2024[315] - Net income for 2025 was $46,444 thousand, representing a 37% increase compared to $33,935 thousand in 2024[315] - Basic net income per share increased to $2.02 in 2025, up from $1.49 in 2024, reflecting a 35.6% growth[315] - For the year ended September 30, 2025, the company's total revenue reached $1,330.8 million, a 7.2% increase from $1,241.6 million in 2024[366] - Grocery sales accounted for 72% of total revenue in 2025, with $952.2 million, up from 71% in 2024[366] - Basic earnings per share (EPS) for 2025 was $2.02, an increase of 35.6% compared to $1.49 in 2024[368] - The company recorded net income of $46.4 million for the year ended September 30, 2025, compared to $33.9 million in 2024, reflecting a 37% increase[368] Assets and Liabilities - As of September 30, 2025, total assets increased to $670.5 million from $655.5 million in 2024, reflecting a growth of approximately 2%[312] - Total liabilities decreased to $458.1 million from $481.2 million, a reduction of approximately 5%[312] - Stockholders' equity grew to $212.4 million, up from $174.3 million, representing a 22% increase[312] - Long-lived assets, including property and equipment, totaled $182.7 million as of September 30, 2025[298] - Cash and cash equivalents rose significantly to $17.1 million, up from $8.9 million in 2024, marking an increase of 93%[312] - Merchandise inventory increased to $133.0 million, a rise of 10% from $120.7 million in 2024[312] - Operating lease assets decreased to $259.6 million from $275.1 million, a decline of about 6%[312] - The company reported total accrued expenses of $37.2 million as of September 30, 2025, an increase from $35.8 million in 2024[378] Cash Flow and Dividends - Net cash provided by operating activities decreased to $55,304 thousand in 2025 from $73,760 thousand in 2024, a decline of 25%[318] - The company reported cash dividends of $11,009 thousand in 2025, down from $31,866 thousand in 2024[320] - The Company paid a quarterly cash dividend of $0.12 per share in fiscal year 2025, up from $0.10 in fiscal years 2024 and 2023[413] - The company declared a quarterly cash dividend of $0.15 per share on November 19, 2025, to be paid on December 10, 2025[427] Expenses and Costs - Total advertising and marketing expenses for the years ended September 30, 2025, 2024, and 2023 were $7.0 million, $7.9 million, and $6.9 million, respectively, net of vendor reimbursements of $9.3 million, $7.9 million, and $7.1 million for the same periods[348] - Cost of goods sold and occupancy costs for 2025 totaled $932,959, up 6.4% from $876,775 in 2024 and 14.7% from $813,637 in 2023[424] - Direct operating costs increased to $316,661 in 2025, a rise of 6.5% from $296,385 in 2024 and 15.5% from $274,167 in 2023[424] - Interest expense, net, decreased to $3,063 in 2025 from $4,176 in 2024, suggesting better debt management[424] - Pre-opening expenses decreased to $1,043 in 2025 from $1,722 in 2024 and $2,007 in 2023, indicating improved cost management in new openings[424] Shareholder Information - The Company has increased its restricted payment capacity by $2.5 million, allowing for cash dividends and stock repurchases not to exceed $15.0 million during any fiscal year[382] - The Company has a share repurchase program with $8.1 million remaining for potential repurchases as of December 8, 2025[411] - Share-based compensation expense totaled $4.0 million for the year ended September 30, 2025, compared to $2.8 million in 2024 and $1.4 million in 2023[407] - The Company anticipates recognizing $7.5 million of unrecognized share-based compensation expense over a weighted average period of approximately 2.3 years as of September 30, 2025[408] Taxation - The total provision for income taxes for the year ended September 30, 2025, was $12.483 million, an increase from $8.866 million in 2024 and $5.127 million in 2023[417] - The Company had a current federal income tax expense of $12.575 million for the year ended September 30, 2025, compared to $10.413 million in 2024 and $5.291 million in 2023[417] Operational Insights - The company operated 169 retail stores as of September 30, 2025, maintaining the same number of stores as in 2024[323] - The largest vendor accounted for approximately 69% of all product purchases in 2025, slightly up from 68% in 2024[331] - The Company has one operating segment, which is natural and organic retail stores, deriving all revenue from grocery and related product sales in the United States[423] - The Company assesses its long-lived assets for possible impairment at least annually, with significant changes in performance or decisions to close stores triggering assessments[336] - The Company recorded no impairment charges related to goodwill or indefinite-lived intangibles as of September 30, 2025[337] Debt and Credit Facilities - The company has no amounts outstanding under its Credit Facility as of September 30, 2025[289] - The Company amended its Credit Facility on November 16, 2023, increasing aggregate revolving commitments from $50.0 million to $75.0 million and extending the maturity date to November 16, 2028[382] - As of September 30, 2025, the Company had $70.1 million available for borrowing under the Credit Facility, with no revolving loan amounts outstanding[383] - The Company incurred gross interest expense of $3.3 million for the year ended September 30, 2025, down from $4.5 million in 2024[386] Lease Information - Total lease cost for the year ended September 30, 2025, was $62.0 million, an increase from $61.5 million in 2024[397] - Operating cash flows from operating leases were $46.2 million for the year ended September 30, 2025, compared to $46.0 million in 2024[398] - The weighted-average remaining lease term for operating leases was 9.3 years as of September 30, 2025, down from 9.9 years in 2024[398] - Future undiscounted lease payments total $416.4 million as of September 30, 2025, with $282.3 million reported as lease liability[400] - The Company had 25 finance leases as of September 30, 2025, with no rent expense recorded for these leases[385] - The Company recognized sublease income of $0.4 million for the year ended September 30, 2025[397]

Core Insights - Natural Grocers emphasizes its commitment to responsible sourcing and exceptional flavor through its private-label coffee program, which has been in place since 2018, featuring organic and Fair Trade Certified beans [1] - The company offers seasonal small-batch coffees that serve as thoughtful gifts or self-care splurges, enhancing the holiday experience for consumers [2][3] - Natural Grocers is currently running its annual SMHolly Deals event, providing customers with significant savings and festive promotions until December 22 [4] Company Overview - Founded in 1955, Natural Grocers by Vitamin Cottage, Inc. is a specialty retailer focused on natural and organic groceries, body care products, and dietary supplements, with strict quality guidelines for its products [5] - The company operates 168 stores across 21 states, offering USDA-certified organic produce and pasture-raised dairy products, while also providing free science-based Nutrition Education programs [5] - In fiscal year 2025, Natural Grocers invested over $16 million in compensation and discretionary payments for its employees, reflecting its commitment to community and crew [5] Product Offerings - The company’s limited-edition Winter Seasonal Coffees include flavors like Organic Holiday Spice and Organic Dark Chocolate Mint, priced at $10.99 per 10 oz, with a member price of $9.99 [6] - The Organic Holiday Spice coffee features a blend of cinnamon, nutmeg, and hints of pine, while the Organic Dark Chocolate Mint offers a combination of peppermint and rich dark chocolate [6]

Core Insights - Natural Grocers is promoting a festive shopping experience with discounts, events, and special offers for the holiday season [1][2][6] Promotions and Discounts - From December 6 to 22, shoppers can enjoy discounts of up to 50% on select products, including party foods, holiday baking items, self-care gifts, and vitamins [2] - {N}power members receive additional benefits, including 10% off all alcohol and exclusive pricing on various products [3][17] Special Events - The company is hosting several family-friendly events from December 6 to 22, including a gift card giveaway, a scavenger hunt, and product sampling [5][11] - Customers can participate in a gingerbread cookie counting contest for a chance to win a $500 gift card [5] Gift Ideas and Recipes - Natural Grocers offers themed gift bags and a selection of holiday recipes to enhance the festive experience [6][12] Company Overview - Founded in 1955, Natural Grocers specializes in natural and organic groceries, body care products, and dietary supplements, with strict quality guidelines [8] - The company operates 168 stores across 21 states and is committed to community and employee welfare, investing over $16 million in employee compensation in fiscal year 2025 [8]

Core Points - Natural Grocers is celebrating the grand reopening of its new location in Grand Junction, Colorado, with various community events and promotions starting December 17 [1] - The new store features a larger layout, sustainable building practices, and an expanded selection of organic products [1][2] - The company emphasizes its commitment to providing high-quality natural and organic groceries at affordable prices, along with free nutrition education [1] Community Engagement - A $2,500 donation will be presented to the Grand Valley Catholic Outreach, the local food bank partner [1] - The grand reopening includes giveaways such as mystery gift cards valued between $5 and $500 for the first 150 customers [1] - Additional promotions include free handcrafted Ecuadorian ponchos and backpacks for the first 250 shoppers, and a prize wheel event [1] Promotions and Discounts - Customers can enjoy 25% off all organic produce from December 17 to 19, with further discounts on selected items through January 31 [1] - The store will host a grand reopening sweepstakes with prizes including an Aventon e-bike valued at $1,400 and a $500 gift card [1] - Up to 50% off select products will be available during the annual Holly Deals event from December 17 to 22 [1] Store Features - The new location includes a Nutrition Education Center for classes and demonstrations, a larger body care department, and an expanded supplement section with over 5,000 SKUs [1] - The store is designed with sustainable features, including non-toxic materials and 100% LED lighting [1] - A modernized checkout system aims to enhance customer experience and efficiency [1] Commitment to Quality - Natural Grocers continues to offer USDA-certified organic produce and a wide range of natural products without artificial additives [1] - The company maintains a focus on environmentally friendly practices and supports its employees with health and nutrition education programs [1]

Core Insights - Natural Grocers has released its Top Trends for 2026, focusing on health, beauty, food, and sustainability, marking the tenth year of this forecast [1][2][4] - The trends are based on insights from a team of nutrition experts and marketing professionals, aiming to guide consumers towards healthier and more ecologically friendly choices [3][4] Health and Wellness Trends - Emphasis on personalized guidance from nutrition experts rather than relying on apps and AI [5] - Increased use of creatine beyond workouts [5] - Simplified health optimization through five foundational supplements [5] Body Care and Beauty Trends - Introduction of magnesium-based body care for relaxation and refreshment [5] - Highlighting the benefits of vitamin E and jojoba oil for skin barrier health [5] - Everyday self-care is positioned as a necessary sensory escape [5] Food and Beverage Trends - Organic products are considered the gold standard for food quality [5] - Focus on consuming quality carbohydrates from vegetables to enhance health and happiness [5] - Strategies for eating healthily on a budget are emphasized [5] Ecologically Thoughtful Trends - Initiatives to clean up personal products for better health and environmental impact [5] - Recognition of the environmental and cognitive costs associated with AI [5] - Advocacy for organic and regenerative agriculture as a defense against climate change [5] Bonus Trend - Embracing cultural diversity is highlighted as a beneficial practice [5]

Core Insights - Natural Grocers has been awarded the 2025 Sustainability in the Food Industry Award for its leadership in environmental and social progress within the food supply chain [1][7] - The company was recognized specifically for its Nutrition Education Program, which promotes accessible nutrition education and sustainable practices [2][6] Company Overview - Founded in 1955, Natural Grocers is the largest family-operated natural and organic retailer in the U.S., with 168 stores across 21 states [8][10] - The company adheres to strict quality guidelines, ensuring that its grocery products do not contain artificial flavors, preservatives, or synthetic colors [10] Nutrition Education Program - The Nutrition Education Program is a core offering of Natural Grocers, emphasizing the importance of nutrition education for both customers and employees [2][4] - Each store features a full-time Nutritional Health Coach (NHC) who provides free, personalized nutrition education, contributing to informed health choices [3][5] - NHCs undergo over 160 hours of continuing education annually to stay updated on nutrition science and wellness trends [5] Commitment to Sustainability - Natural Grocers integrates sustainability into its operations by empowering individuals through education, fostering informed decision-making for healthier lifestyles [6][7] - The company's approach to sustainability is characterized by community outreach initiatives and a focus on human connection, contrasting with the fast-paced retail environment [6][7] Financial Commitment - In fiscal year 2024, Natural Grocers invested over $15 million in incremental compensation and discretionary payments for its employees, reflecting its commitment to community and crew [10]

Financial Data and Key Metrics Changes - The company reported fourth quarter net sales of $336.1 million, a 4.2% increase from the prior year period [11] - Diluted earnings per share for fiscal year 2025 reached a record $2.00, up 36.1% from $1.47 in fiscal year 2024 [13] - Adjusted EBITDA increased 7.7% to $24.4 million in the fourth quarter and 17.5% to $97.9 million for the full year [12][13] Business Line Data and Key Metrics Changes - Daily average comparable store sales increased 4.2% in the fourth quarter and 7.3% for the full year [11][13] - The penetration of Natural Grocers branded products rose to 8.8% of total sales, up from 8.4% a year ago [8] - The company opened two new stores, relocated two stores, and remodeled one store during fiscal 2025, with plans to open six to eight new stores in fiscal 2026 [8][9] Market Data and Key Metrics Changes - The company experienced a modest decline in SNAP EBT transactions, which represent approximately 2% of net sales, but this was deemed immaterial to overall sales [12] - Consumer behavior showed a shift towards more cautious retail spending, impacting sales growth [5][11] Company Strategy and Development Direction - The company aims for 4%-5% annual new store unit growth and is committed to enhancing shareholder value through a balanced capital allocation approach [9] - The focus remains on operational execution, targeted promotions, and enhancing the NPower Rewards program, which had a net sales penetration of 82% [7][8] - The company plans to invest $50-$55 million in capital expenditures to support growth initiatives in fiscal 2026 [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic uncertainty and a cautious consumer environment, with expectations for daily average comparable store sales growth between 1.5% and 4% for fiscal 2026 [14][15] - The company remains confident in its value proposition and the resilience of its core customer base, despite macro pressures affecting the broader retail landscape [6][30] - Management expects year-over-year gross margin to be relatively flat, depending on promotional activity [15] Other Important Information - The company ended the fourth quarter with $17.1 million in cash and cash equivalents and no outstanding borrowings [13] - A quarterly cash dividend was increased by 25% to $0.15 per common share, reflecting strong fiscal performance [9] Q&A Session Summary Question: Is this a good time to increase the penetration of Natural Grocers brands? - Management confirmed they are actively marketing their own brand and aim to increase penetration by one percentage point per year, targeting 10.8% to 11% in two years [20][22] Question: What challenges does the company face in the current economy? - Management noted that less loyal customers have pulled back on spending, leading to a cautious growth outlook, but they expect new marketing initiatives to drive growth in the upcoming quarters [27][28] Question: How does the company differentiate itself from traditional supermarkets? - Management emphasized their authentic brand story and high product standards, which foster customer loyalty and differentiate them from competitors [25][26] Question: What is the outlook for free cash flow in fiscal 2026? - Management expects positive free cash flow in fiscal 2026, supported by increased capital expenditures for new store openings and relocations [33]

Financial Data and Key Metrics Changes - In Q4, net sales increased by 4.2% year-over-year to $336.1 million, with diluted earnings per share reaching $0.51, a 31% increase [11][12] - For fiscal year 2025, total revenue rose by 7.2% to $1.33 billion, with diluted earnings per share increasing by 36.1% to $2.00 [13] - Adjusted EBITDA for Q4 increased by 7.7% to $24.4 million, while for the full year, it rose by 17.5% to $97.9 million [12][13] Business Line Data and Key Metrics Changes - Daily average comparable store sales increased by 4.2% in Q4 and 7.3% for the full year, with a two-year growth of 11.3% and 14.3% respectively [11][13] - The penetration of Natural Grocers branded products in total sales rose to 8.8% from 8.4% a year ago, reflecting strong growth in house-branded offerings [8] Market Data and Key Metrics Changes - The company noted a shift in consumer behavior towards more cautious retail spending, influenced by macroeconomic pressures [5][11] - A modest decline in SNAP EBT transactions was observed, representing approximately 2% of net sales, but it was deemed immaterial to overall sales [12] Company Strategy and Development Direction - The company plans to open six to eight new stores in fiscal 2026, maintaining a commitment to 4%-5% annual new store unit growth [9][14] - The focus remains on enhancing the NPower Rewards program and expanding the Natural Grocers branded products to drive long-term success [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumer prioritization of health and wellness, despite macroeconomic challenges [6][30] - The outlook for fiscal 2026 includes expectations for daily average comparable store sales growth between 1.5% and 4%, with diluted earnings per share projected between $2 and $2.15 [14][15] Other Important Information - The company announced a 25% increase in the quarterly cash dividend to $0.15 per common share, reflecting strong operating performance [9] - The company ended Q4 with $17.1 million in cash and cash equivalents and no outstanding borrowings, indicating a strong liquidity position [13] Q&A Session Summary Question: Is it a good time to increase the penetration of Natural Grocers brands? - Management confirmed that they are actively marketing their own brand and aim to increase penetration by one percentage point per year, targeting 10.8% to 11% in two years [20][22] Question: What challenges does the company face in the current economic environment? - Management acknowledged a pullback from less loyal customers and noted that economic uncertainty is affecting consumer sentiment, but they remain confident in their core customer base [27][30] Question: What is the expectation for free cash flow in 2026? - Management expects positive free cash flow in 2026, with significant investments in capital expenditures to support growth initiatives [33]

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Financial Data and Key Metrics Changes - The company reported fourth quarter net sales of $336.1 million, a 4.2% increase from the prior year period [11] - Diluted earnings per share for fiscal 2025 reached a record $2.00, up 36.1% from $1.47 in fiscal 2024 [13] - Adjusted EBITDA increased 7.7% to $24.4 million in the fourth quarter and 17.5% to $97.9 million for the full year [12][13] - Gross margin decreased by 10 basis points to 29.5% in the fourth quarter, while for fiscal 2025, it improved by 50 basis points compared to the prior year [12][13] Business Line Data and Key Metrics Changes - Daily average comparable store sales increased by 4.2% in the fourth quarter and 7.3% for the full year [11][13] - The penetration of Natural Grocers branded products rose to 8.8% of total sales, up from 8.4% a year ago [8] - The company opened two new stores, relocated two, and remodeled one during fiscal 2025, with plans to open six to eight new stores in fiscal 2026 [8][14] Market Data and Key Metrics Changes - The company noted a shift in consumer behavior towards more cautious retail spending in the fourth quarter, influenced by macroeconomic pressures [5][30] - SNAP transactions represented approximately 2% of net sales, with a modest decline noted in the fourth quarter [12] Company Strategy and Development Direction - The company aims for 4%-5% annual new store unit growth and plans to increase the penetration of its own brands by one percentage point per year [9][23] - The focus remains on enhancing the NPower Rewards program and maintaining affordable pricing to strengthen competitive positioning [6][31] - The company is committed to a balanced approach to capital allocation, increasing the quarterly cash dividend by 25% to $0.15 per share [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumer prioritization of health and wellness despite macro pressures [6][30] - The outlook for fiscal 2026 includes expectations for daily average comparable store sales growth between 1.5% and 4% and diluted earnings per share between $2 and $2.15 [14][16] - Management acknowledged economic uncertainty and its impact on consumer sentiment, particularly among lower and middle-income consumers [30][32] Other Important Information - The company ended the fourth quarter with $17.1 million in cash and cash equivalents and no outstanding borrowings [13] - Free cash flow is expected to remain positive in fiscal 2026, with planned capital expenditures of $50-$55 million [34] Q&A Session Summary Question: Is this a good time to increase the penetration of Natural Grocers brands? - Management confirmed that they are actively marketing their own brand and aim to increase penetration by one percentage point per year [21][23] Question: What challenges does the company face in the current economic environment? - Management noted that less loyal customers have pulled back on spending, leading to a cautious growth outlook [29] Question: How does the company differentiate itself from traditional supermarkets? - Management emphasized their authentic brand story and high product standards, which foster customer loyalty [26][28] Question: What is the expectation for free cash flow in 2026? - Management confirmed that free cash flow is expected to be positive, with significant investments in capital expenditures planned [34]