Natural Grocers by Vitamin Cottage Announces First Quarter Fiscal 2025 Results

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].