Comp-store sales at Natural Grocers edge up in third quarter

Natural Grocers by Vitamin Cottage extended its run of quarterly net-sales increases to four in its fiscal 2022 third quarter.

For the quarter ended June 30, net sales totaled $266.3 million, up 3% from $258.6 million a year earlier, Natural Grocers reported after yesterday’s market close. The Lakewood, Colo.-based specialty grocer attributed the gain to upticks of $6.4 million in comparable-store sales and $2.1 million in new-store sales, partially offset by a $0.8 million sales decrease from a store closing at the start of the quarter.

Retail price inflation, the customer response to pandemic trends, marketing initiatives, promotional campaigns and higher engagement in the {N}power loyalty program also lifted sales in the quarter, Natural Grocers said.

Net sales declined 2.4% in the 2021 third quarter but have since risen 3.2% in the 2021 fourth quarter, 4.6% in the 2022 first quarter and 4.9% in the 2022 second quarter.

“We are pleased with our results in the third quarter, which were in line with our expectations,” Natural Grocers Co-President Kemper Isely said in a statement. “Consumers continue to be drawn to the quality and value of our offering, along with our convenient shopping experience, making us a leading destination for natural and organic products in our markets.” 

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As of yesterday, Natural Grocers said it has signed leases for another five new stores, due to open in fiscal 2022 and beyond.

Fiscal 2022 Q3 daily average comp-store sales were up 2.5%, reflecting a 2.7% increase in daily average transaction size and a 0.2% dip in daily average transaction count, according to the retailer.

At the bottom line, 2022 third-quarter net income came in at $3.9 million, or 17 cents per diluted share, down from $5 million, or 22 cents per diluted share, a year ago.

“Since the third quarter of fiscal 2019, our daily average comparable-store sales have increased 14.1%, and diluted earnings per share have grown 88.9%, underscoring the strength of our differentiated model as well as our emphasis on operational excellence,” Isely noted.

In the year to date, net sales rose 4.2% to $815.4 million from $782.9 million. Daily average comp-store sales for the nine months advanced 3.5% year over year and include gains of 2% in daily average transaction size and 1.5% in daily average transaction count.

Fiscal 2022 net earnings through the third quarter were $19.2 million, or 84 cents per diluted share, versus $13.4 million, or 59 cents per diluted share, in the prior-year period.

Looking ahead, Natural Grocers raised the lower end of its fiscal 2022 guidance. The company now projects daily average comp-sales growth of 2% to 3% (1% to 3% previously) and diluted earnings per share of 87 cents to 96 cents (85 cents to 96 cents previously).

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“We remain confident in our fiscal 2022 outlook and continue to focus on driving profitable growth and enhancing shareholder value,” Isely added.

Natural Grocers said it opened one new store in Colorado during the third quarter, ending the period with 162 stores in 20 states. Since June 30, the retailer opened another new store in South Dakota. As of Aug. 4, the company said it has signed leases for an additional five new stores, slated to open in fiscal 2022 and thereafter.