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Natural Grocers sees uptick in Q1 sales
Net sales increased 7.6% to $301.8 million
Supermarket News Staff
February 9, 2024
3 Min Read
In addition to presenting the financial results of Natural Grocers by Vitamin Cottage, Inc. and its subsidiaries (collectively, the Company) in conformity with U.S. generally accepted accounting principles (GAAP), the Company is also presenting EBITDA and Adjusted EBITDA, which are non-GAAP financial measures.Natural Grocers
Natural Grocers by Vitamin Cottage has results for its first quarter of fiscal 2024 ended December 31, 2023.
Year-over year highlights:
Net sales increased 7.6% to $301.8 million
Daily average comparable store sales increased 6.2%
Net income was $7.8 million, with diluted earnings per share of $0.34
Adjusted EBITDA was $18.8 million
The grocer opened two new stores and relocated one store
“Our strong first quarter results reflect a continuation of the positive trends we experienced in recent quarters,” said Kemper Isely, Natural Grocers co-president. “Net sales grew 7.6% year-over-year to $301.8 million, driven by a 6.2% increase in daily average comparable store sales which included a 3.4% increase in transaction count. Sales strength continued to be broad-based across categories. Our differentiated offering of carefully vetted natural and organic products, and compelling value proposition, continue to resonate with today’s health-conscious consumers and distinguish us in the marketplace. Diluted earnings per share increased 78.9% to $0.34, reflecting strong sales growth, effective pricing and promotions, and expense leverage.”
Isely continued, “We are encouraged by our first quarter results, which have prompted us to raise our fiscal 2024 outlook for daily average comparable store sales growth and diluted earnings per share. We believe we are well positioned to leverage our momentum throughout the balance of the fiscal year.”
During the first quarter of fiscal 2024, net sales increased $21.3 million, or 7.6%, to $301.8 million, compared to the first quarter of fiscal 2023, due to a $17.3 million increase in comparable store sales and a $5.5 million increase in new store sales, partially offset by a $1.5 million decrease in net sales related to closed stores. Daily average comparable store sales increased 6.2% in the first quarter of fiscal 2024, comprised of a 3.4% increase in daily average transaction count and a 2.7% increase in daily average transaction size. The increase in net sales was driven by transaction count, retail price increases, new store sales, and marketing initiatives, including market-specific campaigns and {N}power rewards program offers that drove customer engagement.
Gross profit during the first quarter of fiscal 2024 increased $10.0 million, or 12.8%, to $88.8 million, compared to $78.7 million in the first quarter of fiscal 2023. Gross profit reflects earnings after product and store occupancy costs. Gross margin increased 130 basis points to 29.4% during the first quarter of fiscal 2024, compared to 28.1% in the first quarter of fiscal 2023. The increase in gross margin was driven by higher product margin attributed to effective pricing and promotions, and store occupancy cost leverage.
Store expenses during the first quarter of fiscal 2024 increased 6.9% to $68.0 million, primarily driven by higher compensation expense. Store expenses as a percentage of net sales were 22.5% during the first quarter of fiscal 2024, down from 22.7% in the first quarter of fiscal 2023. The decrease in store expenses as a percentage of net sales reflects expense leverage.
Administrative expenses during the first quarter of fiscal 2024 increased 14.0% to $9.4 million, driven by higher compensation expense. Administrative expenses as a percentage of net sales were 3.1% in the first quarter of fiscal 2024, up from 2.9% in the first quarter of fiscal 2023.
Operating income for the first quarter of fiscal 2024 was $10.8 million, compared to $6.4 million in the first quarter of fiscal 2023. Operating margin during the first quarter of fiscal 2024 was 3.6%, compared to 2.3% in the first quarter of fiscal 2023.
Net income for the first quarter of fiscal 2024 was $7.8 million, or $0.34 diluted earnings per share, compared to net income of $4.4 million, or $0.19 diluted earnings per share, for the first quarter of fiscal 2023.
Adjusted EBITDA for the first quarter of fiscal 2024 was $18.8 million, compared to $13.8 million in the first quarter of fiscal 2023.
The retailer also announced the declaration of a quarterly cash dividend of $0.10 per common share. The dividend will be paid on March 20, 2024 to stockholders of record at the close of business on March 4, 2024.
During the first quarter of fiscal 2024, the company opened two stores and relocated one store, ending the quarter with a total of 167 stores in 21 states. Since December 31, 2023, the company has opened one new store.
The company is raising its fiscal 2024 outlook for daily average comparable store sales growth and diluted earnings per share.
Natural Grocers was founded in 1955, has 168 stores in 21 states.
