Natural Grocers: Rewards, store brands, and consumer interest in health drove strong Q1Natural Grocers: Rewards, store brands, and consumer interest in health drove strong Q1

Lakewood, Colo.-based Natural Grocers by Vitamin Cottage reported first-quarter earnings Thursday for the period ended Dec. 31. The specialty retailer had a big quarter, with net sales up 9.4% compared to the same period a year ago, to $330.2 million.  

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Natural Grocers executives credited continued consumer interest in health and sustainability for the lift, as well as growth in the retailer’s {N}power rewards program and a slight uptick in sales of new private-label products.

Natural Grocers’ first-quarter financial snapshot

·         Daily average comparable-store sales rose 8.9%, or 15.1% on a two-year basis. That growth was driven by a combination of increased transactions, plus higher transaction and basket sizes compared to a year ago.

·         Daily average transactions increased 5.3%, the eighth quarter in a row that metric has risen.

·         Daily average transaction size increased 3.4%.

·         Net income increased 28.1%, to $9.9 million.

·         Store expenses, however, jumped 8.1% to $73.5 million, largely driven by higher labor costs.

·         Administrative expenses also increased 23.6%, to $13.3 million, driven by higher labor costs, increased technology expenses, and costs related to the hiring of Richard Hallé as CFO.

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Raised fiscal forecast

Natural Grocers now expects:

·         Daily average comparable-store sales growth between 5% and 7%, up from 4% to 6%

·         Diluted earnings per share between $1.57 and $1.65, up from $1.52 to $1.60

Store growth

Natural Grocers ended Q1 with 167 stores in 21 states and has opened one new store in 2025. The retailer said it intends to open four to six new locations in 2025, with two to four relocations or remodels.

In their own words

“Consumers are increasingly prioritizing products that support health and sustainability, creating tailwinds for our business … During the quarter, we launched 23 new Natural Grocers brand items that all meet our high standards for nutritional health and sustainability, including organic varieties of tomato sauce, pasta and soup.” – Kemper Isley, Natural Grocers chairman, director and co-president, according to a transcript from financial services site AlphaSense.