Natural Grocers by Vitamin Cottage (NGVC) Q1 2025 earnings summary

Executive summary

• Net sales rose 9.4% year-over-year to $330.2 million for Q1 FY2025, driven by higher comparable store sales, new store openings, and positive trends across product categories and regions.

• Daily average comparable store sales increased 8.9%, with a two-year increase of 15.1%, reflecting higher transaction counts and transaction size.

• Net income increased 28.1% to $9.9 million, with diluted EPS of $0.43, and Adjusted EBITDA grew 21.7% to $22.8 million.

• The company operated 167 stores in 21 states at quarter-end, with plans to open 4–6 new stores and relocate/remodel 2–4 stores in fiscal 2025.

• Growth was supported by increased sales of private label products and enhanced customer engagement with the rewards program.

Financial highlights

• Gross profit increased 11.3% to $98.8 million, with gross margin up 50 basis points to 29.9%.

• Operating income rose 23.6% to $13.3 million; operating margin improved to 4.0%.

• Store expenses increased 8.1% to $73.5 million, but as a percentage of sales, they declined to 22.3%.

• Administrative expenses rose 22.4% to $11.5 million, mainly due to higher compensation and technology/CFO transition costs.

• Cash and equivalents at quarter-end were $6.3 million, with $61.4 million available under the revolving credit facility.

Outlook and guidance

• Fiscal 2025 daily average comparable store sales growth outlook raised to 5–7% (from 4–6%), and diluted EPS guidance increased to $1.57–$1.65 (from $1.52–$1.60).

• Plans for 4–6 new store openings and 2–4 relocations/remodels; capital expenditures expected at $36–$44 million.

• Sales comps expected at high end of range in Q2, moderating in second half; gross margin and store expenses as % of sales expected to remain relatively flat year-over-year.

• Management expects continued sales and profitability growth, but notes potential variability due to competitive and economic conditions.

• Capital expenditures for the remainder of fiscal 2025 expected to be $26.6–$34.6 million.