Natural Grocers by Vitamin Cottage (NGVC) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 rose 9.7% year-over-year to $309.1 million, with daily average comparable store sales up 7.2% and net income increasing 30.2% to $9.2 million, or $0.40 per diluted share.

• Adjusted EBITDA for Q3 2024 was $22.2 million, up 32.8% year-over-year, reflecting strong operational performance.

• Operating income increased 41.4% to $12.8 million, with margin expansion and strong EPS growth.

• The company operated 168 stores in 21 states as of June 30, 2024, opening three new stores and relocating/remodeling four during the nine-month period.

• The company raised its FY24 outlook for comparable store sales growth and EPS.

Financial highlights

• Gross profit for Q3 2024 increased 11.0% to $90.3 million, with gross margin rising 30 basis points to 29.2%.

• Store expenses as a percentage of net sales decreased to 21.9% in Q3 2024 from 22.2% a year ago.

• For the first nine months, net sales rose 8.7% to $918.9 million; net income was $24.9 million, or $1.08 per diluted share.

• Cash and cash equivalents at June 30, 2024 were $13.9 million, with $56.2 million available under the Revolving Facility.

• Adjusted EBITDA margin for Q3 2024 was 7.2%, up from 5.9% in Q3 2023.

Outlook and guidance

• FY24 daily average comparable store sales growth expected at 6.0% to 7.0%.

• FY24 diluted EPS guidance raised to $1.27–$1.34.

• Plans include opening four new stores and relocating/remodeling five existing stores in fiscal 2024, with capital expenditures projected at $35–$39 million.

• Management notes future growth may be affected by competitive pressures, inflation, and labor market trends.