Natural Grocers Posts Strong Quarter, Fiscal Year
Natural Grocers by Vitamin Cottage Inc. wrapped its fourth quarter and fiscal year in positive territory, with metrics that reflect a growing business. Net sales, while fueled by inflationary conditions, rose 9.3% during the fourth quarter to $322.7 million and were up 8.9% for the fiscal year to $1.24 billion. Comps increased 7.1% for the quarter and a similar 7% for the year.
The retailer’s solid performance was evident in other measures. Gross profit climbed 13.1% during the fourth quarter to hit $95.4 million and was up 11.6% on a year-over-year (YoY) basis, reaching $364.8 million. Adjusted EBITDA likewise was on the upswing, moving from $16.1 million to $22.6 million for the quarter and from $63.4 million to $83.3 million for FY2024.
The strong numbers were attributed to a variety of factors, including the addition of four new stores and the remodeling or relocation of another four locations that contributed to the bottom line. The company also cited enhanced customer engagement with its {N}power rewards program, market-specific campaigns, and increased sales of Natural Grocers brand products. In an earning call, the company reported that its branded products accounted for 8.4% of total sale in the fourth quarter, above the 7.8% share last year and the company launched 80 new private label items in the fiscal year.
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“Our outstanding fourth quarter and fiscal year results underscore our customers' appreciation for our commitment to the exceptional quality, value and convenience provided by our innovative business model along with consumers' increasing prioritization of products that support health and sustainability," said Kemper Isely, co-president, adding, “We are particularly pleased with the balanced nature of our sales growth in fiscal 2024, including increases in transaction counts and items per transaction, modest price inflation and sales contribution from new stores."
Isley said that the grocer is poised for continued success, following the 37% boost in net sales over the last five years. “As we look forward to fiscal 2025, we expect to build upon our momentum by continuing to execute to our founding principles, leveraging our differentiated model and emphasizing operational excellence to drive profitable growth,” he remarked.
More specifically, Natural Grocers’ outlook for FY2025 includes the addition of four to six new stores, two to four relocations or remodels and a 4% to 6% lift in sales comps.
“Our current expectation is that sales comps will be at the high end of our outlook range in the first half of the year, while moderating somewhat in the second half of the year, as we continue to cycle relatively strong comps in the prior year,” asserted retiring CFO Todd Dissinger in the earnings call. “We expect modest inflation throughout the year in line with current trends. Our outlook anticipates that year-over-year gross margin will be relatively flat. Lastly, we expect that year-over-year store expenses as a percentage of sales will be relatively flat to slightly lower.”
Family-operated Natural Grocers by Vitamin Cottage Inc. operates 169 stores in 21 states. The Lakewood, Colo.-based natural and organic grocer is No. 95 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America.
