Natural Grocers sees sales, transaction count increase in Q2

Natural Grocers by Vitamin Cottage maintained its long tradition of steady growth in the second quarter of fiscal 2022 ended March 31, the company announced Thursday.

The Lakewood, Colo.-based natural retailer said the second quarter's financial results were stronger than expected, as net sales increased 4.9% to $271.8 million and daily average comparable store sales increased 4.3%. Among other highlights:

The board of directors announced shareholders of record as of May 31 would receive on June 15 a cash dividend of $0.10 per share.

"While comp sales were positively impacted by retail price inflation, it is important to note that transaction count comp has had a year-over-year increase for four consecutive quarters," Kemper Isely, co-president of Natural Grocers, said during Thursday afternoon's earnings call. The company has recorded 18 straight years of sales growth, he noted during the Q4 fiscal 2021 earnings call in November.

Looking ahead, the company is raising its outlook for the rest of fiscal 2022.

Related:Natural Grocers off to strong start in fiscal 2022

"Our updated outlook is based upon the strong first half results, current trends in our expectations for the second half of the fiscal year," said chief financial officer Todd Dissinger. "The outlook considers the uncertainty of the pandemic economic inflationary factors and supply chain trends, which are expected to impact our operations and financial performance through the balance of fiscal 2022."

Natural Grocers expects to see comparable store growth of 1.0% to 3.0% and diluted earnings per share of $0.85 to $0.96.

Loyalty program, private label see growth

"Our unique approach to marketing and promotional activity continues to drive high levels of customer engagement and sales growth," he said on Thursday. "For example, in the second quarter we offer '21 Days to a Healthier You' program, which features a free series of nutrition education classes, each with an accompanying seven-day challenge." The program is developed by in-house nutrition education experts, and customers receive coupon books that highlight the company's private-label products that correspond to each week's challenge.

"This cross-functional program was a good example of our differentiated marketing and offering," Isely said.

Related:Natural Grocers' GardenBox grows lettuce right at the store

Natural Grocers continues to see membership in its loyalty program, {N}Power, rise as well. At the end of the second quarter, 1.6 million consumers were members, a 19% increase from a year ago. Those shoppers account for 73% of the company's sales, up from 70% a year ago, he said.

Private-label sales continue to increase as a share of overall sales, reaching 7.7% compared with 7.3% at the end of Q2 2021. Natural Grocers introduced truffles made in France and more dietary supplements — a total of eight new products — to its private-label lineup during the second quarter.

Although construction and equipment delays have slowed Natural Grocers' plan to open additional locations, it still plans to open four or five new stores and relocate two others this year. As of the end of Q2, Natural Grocers operates 162 stores in 20 states.

This article originally appeared on New Hope Network, a Supermarket News sister website.