Natural Grocers Raises Its Outlook for Fiscal 2022

Natural Grocers by Vitamin Cottage Inc. has raised its outlook for fiscal 2022, after reporting on May 5 increases in average same-store sales and net sales for its second quarter ending March 31.

Net sales increased 4.9% to $271.8 million compared to the second quarter of fiscal 2021, due to an $11.1 million increase in comparable store sales and a $1.5 million increase in new store sales, the Lakewood, Colo.-based grocer said. Daily average same-store sales increased 4.3%, spurred by a 2.5% increase in daily average transaction size and a 1.8% increase in daily average transaction count.

Natural Grocers said the lift in net sales was “primarily driven by our customers' response to COVID-19 pandemic trends early in the quarter, retail price inflation, marketing initiatives, promotional campaigns and increased engagement in our Npower customer loyalty program.”

Gross profit (earnings after product and occupancy expenses) during the second quarter of fiscal 2022 increased 6.9% to $76.8 million, primarily driven by increased sales volume. Gross margin, meanwhile, increased to 28.2% during the second quarter vs. 27.7% in the second quarter of fiscal 2021. The increase in gross margin was primarily driven by improved product margin and store occupancy leverage, Natural Grocers said.

Net income for the second quarter of fiscal 2022 increased 35.1% to $6.4 million, or 28 cents diluted earnings per share, compared to net income of $4.7 million, or 21 cents diluted earnings per share, for second-quarter 2021. And adjusted EBITDA increased 11.8% to $16.1 million in the second quarter vs. $14.4 million in second-quarter 2021.

"Our second-quarter results also underscore the agility of our operating model to quickly adapt to changes in the operating environment, including challenges related to the pandemic, labor availability and the supply chain constraints that many retailers also experienced during this time frame,” co-President Kemper Isely said in a release. “The strong financial performance in the first half of the fiscal year and our expectations for the second half of the fiscal year give us confidence in raising our fiscal year 2022 outlook."

During the first six months of fiscal 2022, net sales increased $24.9 million, or 4.7%, to $549.1 million, and daily average same-store sales increased 4.1% in the first six months. Gross profit during the first six months increased as well, by 7.4% to $155.5 million, primarily driven by increased sales volume, Natural Grocers said. Gross margin increased to 28.3% vs. 27.6% in the first six months of fiscal 2021.

Based on this year-to-date performance, Natural Grocers raising its fiscal 2022 same-store sales growth and diluted earnings per share outlook. It expects daily average comparable store sales growth will be between 1% and 3%, and diluted earnings per share between 85 cents and 96 cents.

The company also expects to have four to five new stores in fiscal 2022, as well as two relocations/remodels. This summer, Natural Grocer plans to open a new store in Idaho and a store in South Dakota.

Natural Grocers currently has 162 stores in 20 states.