Natural Grocers set records in fiscal year 2024

It was a record-breaking fiscal year for Natural Grocers by Vitamin Cottage, and it seems the specialty grocer knows exactly what it wants to do for an encore in 2025.

For the full fiscal year, net sales increased 8.9% year-over-year to $1.24 billion, the Lakewood, Colo.-based company announced during a fourth-quarter earnings call on Thursday. Over the last five years, net sales have grown by 37%. Meanwhile, daily average comparable-store sales increased 7% and 10.6% on a two-year basis. This marked the 21st consecutive year of positive comparable-store sales growth.

“We continue to benefit from consumers’ increasing prioritization of products that support health and sustainability,” said Natural Grocers Co-President Kemper Isely during the call, according to a transcript from financial services site AlphaSense.

In the fourth quarter, net sales increased 9.3% to $322.7 million, and daily average comparable-store sales rose 7.1% year-over-year; 14% on a two-year basis.

Net income increased by 53.2% to $9 million, and adjusted EBITDA reached $22.6 million.

Natural Grocers’ daily average comparable transaction count rose 3.6%, marking the seventh consecutive quarter with positive customer traffic. Additionally, daily average comparable transaction size increased 3.4%, which included an increase of approximately two percentage points in items per basket. It was the third consecutive quarter that Natural Grocers saw an increase in items per basket.

Isely credited Natural Grocers’ {N}power rewards program for the healthy earnings growth over the last year and said the grocer will continue to leverage the program moving forward. {N}power penetration was 81% in the fourth quarter, up from 77% a year ago.

“We’re really focused on driving revenue through marketing to our {N}power customers because that’s the most cost-effective way for us to market,” said Isely. “And so, getting a higher percentage of our customer base signed up as {N}power members is super effective in driving top-line sales.”

The departments showing the highest sales growth in the fourth quarter were meat, dairy, and produce, Isely said. Natural Grocers’ private-label line accounted for 8.4% of total sales, up from 7.8% a year ago. The company launched 19 new products, and for the year, it introduced 80 new private-label products.

The company opened four new stores during the fourth quarter and relocated or remodeled four others. Its goal moving forward is to open six to eight new stores each year.

Natural Grocers’ outlook includes the benefits of new store growth, targeted marketing, a focus on its value proposition, differentiation, customer engagement, and operating initiatives aimed at driving high productivity in stores. The grocer expects comparable sales to be at the high end of its outlook range during the first half of 2025 before moderating somewhat in the second half.

“We expect modest inflation throughout the year in line with current trends,” said Natural Grocers CFO Todd Dissinger during his final earnings call. Dissinger will retire at the end of the year and will be replaced by Richard Halle, who has served as a member of Natural Grocers’ Board of Directors and Audit Committee since 2012. “Considering fiscal 2025 and beyond, we believe we have opportunities for growth from our alignment with consumer trends, strong customer engagement through our {N}power rewards program, the expansion of Natural Grocers-branded products, new store development, and driving existing store productivity.”