Natural Grocers by Vitamin Cottage, Inc. Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
Is Natural Grocers by Vitamin Cottage, Inc. a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $672.02m | Revenue (TTM) = $1.34b
Market Cap = $672.02m | Estimated Revenue = $1.39b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $699.50m | Revenue (TTM) = $1.34b
Enterprise Value = $699.50m | Forward Revenue = $1.39b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Natural Grocers by Vitamin Cottage, Inc. Stock Analysis
Analyst Opinions
9 Analysts have issued a Natural Grocers by Vitamin Cottage, Inc. forecast:
Analyst Opinions
9 Analysts have issued a Natural Grocers by Vitamin Cottage, Inc. forecast:
Natural Grocers by Vitamin Cottage, Inc. Events
Past Events
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AUG
6
Q3 2026 Earnings Call
about one month ago
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MAY
7
Q2 2026 Earnings Call
4 months ago
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Q1 2026 Earnings Call
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10 months ago
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Natural Grocers by Vitamin Cottage, Inc. — Q3 2026 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen. Welcome to the Natural Grocers Third Quarter Fiscal Year 2026 Earnings Conference Call.
[Operator Instructions]
As a reminder, today's call is being recorded. I'd now like to turn the conference over to Ms. Jessica Thiessen, Vice President, Treasurer for Natural Grocers. Ms. Thiessen, you may begin.
Good afternoon, and thank you for joining us for the Natural Grocers by Vitamin Cottage Third Quarter Fiscal Year 2026 Earnings Conference Call. On the call with me today are Kemper Isely, Co-President; and Richard Hallé, Chief Financial Officer.
As a reminder, certain information provided during this conference call, including the company's outlook for fiscal 2026, contains forward-looking statements based on current expectations and assumptions and are subject to risks and uncertainties.
Actual results could differ materially from those described in the forward-looking statements due to a variety of factors, including the risks and uncertainties detailed in the company's most recently filed Forms 10-Q and 10-K. The company undertakes no obligation to update forward-looking statements.
Our remarks today include references to adjusted EBITDA, which is a non-GAAP measure. Please see our earnings release for a reconciliation of adjusted EBITDA to net income. Today's earnings release will be available on the company's website, and a recording of this call will be available on the website at investors.naturalgrocers.com. Now I will turn the call over to Kemper.
Thank you, Jessica, and good afternoon, everyone.
During today's call, I will provide an overview of our financial results and highlight key initiatives supporting long-term growth. Rich will then review our third quarter results in greater detail and discuss our fiscal year guidance. We delivered positive daily average comparable store sales growth in the third quarter despite a challenging consumer environment, with comp growth accelerating to 1.2% from 0.5% in the second quarter. We believe third quarter sales trends reflected continued economic uncertainty and sustained focus on value among consumers, consistent with trends observed across the grocery retail sector.
In the third quarter, we continued to see strong membership gains in our {N}power Rewards program. Net sales penetration increased 2 percentage points from the prior year period to 84%, highlighting our customers' appreciation for the program's value and benefits. Sales engagement with {N}power members also outperformed in key metrics, generating growth in sales, traffic and basket size during the quarter. {N}power remains an effective tool for optimizing promotions, strengthening customer engagement and building loyalty.
As the value leader in natural and organic grocery retail, we continue to emphasize our always affordable pricing through initiatives such as our Even More Affordable campaign, which features rotating everyday staples, including our Natural Grocers brand products.
We believe growing consumer prioritization of health and wellness remains a durable trend and creates a meaningful long-term growth opportunity. By pairing rigorous product standards with our always affordable pricing strategy, we deliver exceptional value, strengthen customer loyalty and reinforce our competitive differentiation. Our unit growth strategy continues to gain momentum with 6 stores opened fiscal year-to-date.
During the third quarter, we opened three new stores, including our first store in Wisconsin and relocated one store. In July, we opened two new stores and expect to open one additional new store later in the fourth quarter. All six new store openings this year and the two from last year for that matter, rank among our strongest opening day sales performances, a testament to the effectiveness of our marketing efforts.
We see significant opportunities to expand our store footprint and remain focused on delivering annual unit growth of 4% to 5% for the foreseeable future.
A new initiative we are very excited about is our expanding e-commerce capabilities. In mid-July, we launched a new partnership with DoorDash, extending delivery access across our entire store base with in-store pricing on delivery orders made through DoorDash. Later this month, we will integrate our {N}power Rewards program into DoorDash and further enhance online shopping through the Natural Grocers website, creating additional opportunities to serve customers however they choose to shop.
In the coming months, we will phase in curbside pickup across all stores. We continue to partner with Instacart to offer delivery service and pickup at select stores. We believe these enhancements to our e-commerce offering will expand customer access to Natural Grocers, driving incremental transactions from existing customers and attracting new shoppers.
While we're still in the initial phase of this new partnership, we view these initiatives as an important step in supporting long-term sales growth and enhancing operating leverage while remaining committed to delivering the differentiated in-store experience that defines our brand. Finally, I want to thank our good4u Crew for their continued dedication to serving our customers.
Their commitment to delivering exceptional service is a cornerstone of our differentiated model and one of the key reasons customers choose Natural Grocers. Now I will turn our call over to Rich to discuss our financial results in greater detail and fiscal 2026 guidance.
Thank you, Kemper, and good afternoon.
Third quarter net sales increased 1.8% from the prior year period to $334.7 million. Daily average comparable store sales increased 1.2%, comprised of a 3.1% increase in basket size and a 1.8% decrease in transaction count. We saw a sequential improvement in comp through the quarter.
Our most differentiated categories, produce, dairy and meat continued to lead sales growth. Furthermore, Natural Grocers brand penetration increased 110 basis points year-over-year to 9.7% of total sales. Gross margin decreased 60 basis points to 29.3%, driven by lower product margin, primarily due to an unfavorable change in sales mix as well as higher merchandise inventory shrink and freight costs.
Our primary distributor cybersecurity incident in the third quarter of fiscal 2025 affected the year-over-year comparability of product margin mix and shrink for the current period. Higher shrink was also partially attributable to temporary operational impacts related to our ERP system upgrade completed in the previous quarter. Store expenses as a percentage of net sales decreased 20 basis points from the prior year, driven by expense management.
Administrative expenses were $9.5 million compared to $10.9 million in the third quarter of fiscal 2025. Administrative expenses during the third quarter of fiscal 2026 included a business interruption insurance recovery gain of $2 million related to the cybersecurity incident for the company's primary distributor in June and July of 2025.
Preopening expenses increased $1.3 million or 40 basis points as a percentage of net sales year-over-year, driven by the acceleration of new store openings. Our investment in preopening expenses impacted diluted earnings per share by approximately $0.04. Net income was $11.1 million or $0.48 diluted earnings per share compared to net income of $11.6 million or $0.50 diluted earnings per share for the third quarter of fiscal 2025.
Adjusted EBITDA decreased $1.8 million or 7.6% to $22.5 million, including a reduction for the $2 million business interruption recovery gain.
Turning to the balance sheet and cash flow. We ended the third quarter in a strong liquidity position, including $17.5 million in cash and cash equivalents, no outstanding credit facility borrowings and $67.3 million available for borrowing on our revolving credit facility. During the first nine months of fiscal 2026, we generated cash from operations of $55.1 million and invested $40.3 million in net capital expenditures, primarily for new and relocated stores and real property acquisitions, resulting in free cash flow of $14.8 million.
Today, we are refining the company's fiscal year outlook to reflect our third quarter results while remaining thoughtful about the evolving consumer environment. Our outlook includes the following: open 6 to 7 new stores compared to our prior outlook of between 6 and 8, relocate or remodel 2 existing stores compared to our prior outlook of between 2 and 3 stores; achieve daily average comparable store sales growth between 1.5% and 2% compared to our prior outlook of between 1.5% and 2.5%.
Diluted earnings per share between $2.07 and $2.11, including incremental investment related to new stores of $0.08 compared to our prior outlook of between $2.07 and $2.15. And capital expenditures of $45 million to $50 million, unchanged from our prior outlook. One additional note regarding our fourth quarter, we have elected to close stores on Labor Day this year, resulting in one fewer selling day in the fourth quarter compared to last year.
We expect the majority of sales that otherwise would have occurred on Labor Day to shift to adjacent days. In closing, based on our year-to-date performance and full year outlook, we are pleased with the comparable store sales growth achieved in a challenging consumer environment and the earnings growth delivered through disciplined expense management while continuing to invest in accelerated new store expansion.
We believe our differentiated customer value proposition, accelerating unit growth and exposure to favorable health and wellness trends position Natural Grocers to generate sustainable long-term growth and stockholder value. Now we'd like to open the line for questions. Thank you.
[Operator Instructions]
Our first question comes from Aaron Grey of Alliance Global.
2. Question Answer
First question for me, I just want to ask broader impacts you might be seeing from downtrade in the category and how we should think about the gross margin? It sounded like some of the impacts on the quarter might have been more onetime in nature. So how should we think about the evolution of the gross margin given some downtrade we might be seeing in the category and some price action you might be seeing from your competitors?
Well, as far as downtrading, we haven't really seen a lot of downtrading at our stores. I mean our products are pretty consistently of high quality and affordable price. There really isn't a lot of trading for lower quality or lower price items at our stores.
As far as promotional activity by our competitors, we've always been the price leader compared to our closest competitors in our industry, and we still are. And so we haven't really seen a lot of -- a whole lot of dramatic price changes. And we've always been focused on keeping prices on high-profile items like eggs and avocados at a very competitive and best price in the industry.
As far as the margin issue, yes, we think that it will be isolated to this quarter. We had some unusual circumstances that caused some comparisons to last year to be a little bit unfavorable.
Appreciate that color. Second one for me, just on some of the new store initial sales that you talked about being company records. Can you maybe provide some of the color you talked about in terms of attributing it to marketing?
And maybe bigger picture, if you would attribute that to some of the broader brand awareness that you're seeing for Natural Grocers, not just in existing markets, but maybe even in new markets such as Wisconsin that you called out?
Yes. Our marketing department is excellent, and they do a very good job of getting us well known in the communities before we open. And our brand resonates in new communities such as Wisconsin.
That store that opened there was our second best opening day ever and then it was our best opening day ever, and then it was opening in Rapid City eclipsed it a couple of weeks later. And that would be a new community in South Dakota. I mean we have one on the east end of South Dakota. Now we have a store on the west end of South Dakota.
We've been well received in both communities and then very well received in the Lake Geneva community in Wisconsin. And it just goes to show how our differentiated selling of products resonates with those communities.
Our next question comes from Scott Mushkin of R5 Capital.
So I wanted to dig into {N}power a little bit more. I actually got a question from an investor, and I was actually a little bit embarrassed because I couldn't actually answer it as well as I wanted to. So it was actually -- the question was, what do you think are the top things that differentiate {N}power from other programs that are out there? Why is it so effective, I guess, is the crux of the question?
It's so effective because we have learned what our customers want in a loyalty program. And we give them a little bit -- instead of just giving them a discount on gas like most of the supermarket programs do, we give them special discounts on certain commodities that like eggs and avocados that they value that's very valuable to them.
And then we give them special offers that are tailored toward their shopping patterns that they very much value. And then we offer games that they like to play and people enjoy playing games. And so it encourages shopping, the games that we offer to them.
And then my second question actually goes to just the environment in the industry. The economy is clearly complicated. Obviously, there's some pressures there with the gas prices. But on the flip side is you have a massive wealth effect going on. And so -- and then, of course, the industry dynamics are fairly complicated, too, right?
We got the GLP-1 craze, the population issues as far as growth in population. So I was just wondering like -- are you seeing different dynamics through it? It seems to me that you could make a case that the economy is actually better than a lot of people are -- or the news -- is in the news flow. And how much do you attribute to straight out the economy?
And how much is it some of the challenges related to what's going on in the industry with the different trends as far as the eating habits and other things? So I just wonder if you guys could dive into that a little bit. I know Kemper, you've been in the business forever. I'd love to hear your insights.
Well, our most loyal customers have stayed extremely loyal and everybody that we've added to {N}power is becoming loyal. And as you heard in the call, our penetration is increasing. And so with those customers, we're doing really well, and there doesn't seem to be any issues.
The people that we've lost a little bit on are the marginal customers. And they probably have some economic distress going on because of the price of gasoline, the price of heating and the summer air conditioning it's been really hot. And so those customers have pulled back a little bit.
But we're very optimistic that our differentiated brand will continue to attract people that are coming to the MAHA, Make America Healthy Again, sort of conclusion that they need to become healthy. And so as more and more people become aware of eating properly and taking nutritional supplements, they will naturally migrate towards our stores because we're really the only authentic national chain that has the offering for those type of people crave and want.
Yes, I keep waiting for you guys to open up a store in Florida, but I don't know, I might have to wait a bit.
Well, at least we got up into Wisconsin.
Exactly. Thanks.
You never know, it might get a little bit. I could even go a little bit farther east. You never know.
Our next question comes from Chuck Cerankosky of Northcoast Research.
Just a quick question because I didn't get your data point. How many cents per share did you say there would be a preopening costs in the year or the quarter or the fourth quarter?
Yes. It was $0.04 in the quarter, and it was $0.08 for the full year.
Okay. So we've seen half of it already.
Well, we’ve seen more than half. $0.04 was the quarter, $0.08’s the total year.
And then there'll be a couple more in the next quarter.
Okay. $0.04 in the third quarter. And then recently, there was a federal court ruling that's going to force a variety of mainstream products to disclose more GMO ingredients. Do you see that playing a role in interest in Natural Grocers products, especially in concert with the increased support of healthy eating?
Well, yes, I mean, we were the plaintiff in that case. So we definitely think that it was an important ruling that people will actually have to disclose that they have GMOs in their products because it's a concern to people that want to eat a clean diet. And so it really plays into our strength, the ruling does.
This concludes our question-and-answer session. I would like to turn the conference back over to Kemper Isely for any closing remarks.
Thank you. We are honored to be named the 2026 Sustainability Retailer of the Year by Produce Business, a leading trade publication serving the fresh produce industry. This recognition reflects our long-standing commitment to sustainability, including our 100% certified organic produce offering, support for regenerative agriculture and environmental stewardship initiatives.
This month marks our company's 71st year serving our communities. I encourage you to visit one of our locations between August 13 and 15 to celebrate our anniversary with us. Thank you for joining us. We look forward to updating you on our next call regarding the fourth quarter and full fiscal year 2026 results. Thank you, and have a great day. Goodbye.
This conference call has now concluded. Thank you for attending the Natural Grocers Third Quarter Fiscal Year 2026 Earnings Conference Call. You may now disconnect.
Natural Grocers by Vitamin Cottage, Inc. — Q2 2026 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen. Welcome to the Natural Grocers Second Quarter Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded.
I would now like to turn the conference over to Ms. Jessica Thiessen, Vice President, Treasurer for Natural Grocers. Ms. Thiessen, you may begin.
Good afternoon, and thank you for joining us for the Natural Grocers by Vitamin Cottage Second Quarter Fiscal Year 2026 Earnings Conference Call. On the call with me today are Kemper Isely, Co-President; and Richard Halle, Chief Financial Officer.
As a reminder, certain information provided during this conference call, including the company's outlook for fiscal 2026, contains forward-looking statements based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from those described in the forward-looking statements due to a variety of factors, including the risks and uncertainties detailed in the company's most recently filed Forms 10-Q and 10-K. The company undertakes no obligation to update forward-looking statements.
Our remarks today include references to adjusted EBITDA, which is a non-GAAP measure. Please see our earnings release for a reconciliation of adjusted EBITDA to net income. Today's earnings release will be available on the company's website, and a recording of this call will be available on the website at investors.naturalgrocers.com.
Now I will turn the call over to Kemper.
Thank you, Jessica, and good afternoon, everyone. During today's call, I will provide an overview of our financial results and highlight progress on initiatives driving long-term value creation. Then Rich will discuss the second quarter results in greater detail and review our fiscal year guidance.
We performed well in a challenging environment, driven by strong store-level execution and disciplined expense management, delivering diluted earnings per share growth of 3.6%. There are a few underlying trends I want to highlight. In the second quarter, comparable store sales increased 0.5% while cycling an 8.9% comp last year. On a 2-year basis, comps of 9.4% continued to demonstrate solid growth relative to the broader grocery retail industry. We believe the second quarter sales trends reflected continued economic uncertainty and value-seeking consumer spending behaviors observed broadly across the grocery retail sector.
Furthermore, in the second quarter, we continued to see strong membership gains in our {N}power rewards program and net sales penetration increased 3 percentage points to 84%, highlighting our customers' appreciation for the program's value and benefits. {N}power remains an effective tool for optimizing promotional activity and strengthening customer engagement. Natural Grocers is the value option in natural and organic grocery retail. Our marketing and communications continue to feature our always-affordable prices, including the even more affordable campaign, which highlights a rotating assortment of staples, including our Natural Grocers brand products.
We believe the consumer prioritization of health and wellness, including food and nutrition, is growing and enduring. Our differentiated natural and organic offering, supported by rigorous standards and our always-affordable pricing strategy continues to deliver strong value and reinforce our competitive positioning.
Next, I will highlight an important milestone, which is consistent with management's long-term focus. During the second quarter, we successfully completed a major upgrade to our enterprise resource planning system. The ERP platform supports the majority of our functional areas, making this the most comprehensive systems implementation the company has undertaken to date. The successful execution reflects the dedication and cross-functional collaboration of our teams. The upgraded system enhances operational efficiency, improves data visibility and provides a scalable foundation to support future growth and expand functionality, including data analytics and operational efficiencies, leveraging business intelligence tools.
We've also made progress on store development as another lever driving our long-term value. During the second quarter, we opened 1 new store and subsequent to the quarter, we relocated 1 store and opened an additional store. We're encouraged by the productivity of our new stores and relocations. We are on track to open 6 to 8 new stores in fiscal 2026. We believe we have significant opportunities to expand our store footprint and are targeting a 4% to 5% annual new store unit growth rate for the foreseeable future.
Finally, I would like to express my appreciation to our crew for their continued commitment to delivering an exceptional shopping experience. The best-in-class customer service provided by our good4u crew is a key element of our differentiated offering.
Now I will turn our call over to Rich to discuss our financial results in greater detail and our fiscal 2026 guidance.
Thank you, Kemper, and good afternoon. Second quarter net sales increased 0.5% from the prior year period to $337.4 million. Daily average comparable store sales increased 0.5%, comprised of a 1.6% increase in basket size and a 1.1% decrease in transaction count. The basket comp included a decline of less than half an item per basket. We continue to see the highest sales growth in dairy, produce and meat, which are some of our most differentiated offerings. And our Natural Grocers brand penetration was 9.8% of total sales, up 120 basis points from a year ago.
Gross margin increased 10 basis points to 30.4%, driven by lower store occupancy costs as a percentage of net sales and stable product margin, including inventory shrink. Store expenses decreased 1.6%, primarily driven by expense management. Administrative expenses increased 10%, primarily driven by higher technology expenses, including expenses related to the completion of the ERP upgrade project.
Net income increased 2.5% to $13.4 million and diluted earnings per share increased 3.6% to $0.58 in the second quarter. Adjusted EBITDA increased 4% to $27.4 million.
Turning to the balance sheet and cash flow. We ended the second quarter in a strong liquidity position, including $20.7 million in cash and cash equivalents, no outstanding borrowings and $67.6 million available for borrowing on our revolving credit facility. During the first 6 months of fiscal 2026, we generated cash from operations of $43.8 million and invested $30.3 million in net capital expenditures, primarily for new and relocated stores and real property acquisitions, resulting in free cash flow of $13.5 million.
Subsequent to the second quarter, we received a $2 million recovery from our insurance carrier for business interruption related to the June 2025 cybersecurity incident that temporarily impacted our main distributor's ability to fulfill orders and distribute products to our stores, resulting in product shortages and lost sales in June and July. The $2 million recovery equates to approximately $0.065 of diluted earnings per share impacting our expectations for Q3 and has been incorporated into our updated guidance that follows.
Today, we are refining the company's fiscal year outlook to reflect our second quarter results and the significant opportunities we see in our differentiated market position while remaining thoughtful about the evolving consumer environment. Our outlook includes the following: open 6 to 8 new stores and relocate or remodel 2 to 3 existing stores; achieve daily average comparable store sales growth between 1.5% and 2.5% compared to our prior outlook of between 1.5% and 4%; diluted earnings per share between $2.07 and $2.15 compared to our prior outlook of between $2 and $2.15; and capital expenditures of $45 million to $50 million compared to our prior outlook of $50 million to $55 million.
Capital expenditures primarily support growth initiatives such as new and relocated stores and include maintenance CapEx of approximately 75 basis points of net sales. In addition, our current expectation is that sales comps will be 2% to 4% in the second half of fiscal 2026, at the lower end of our outlook range in the third quarter as we cycle strong comps in the prior year and increasing slightly in the fourth quarter as we cycle moderated comps. Additionally, the comp range reflects consumer uncertainty in the current macro environment.
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, primarily depending on the level of promotional activity. We expect that year-over-year store expenses as a percentage of net sales will be relatively flat to slightly lower. Our outlook anticipates that year-over-year administrative expenses as a percentage of net sales will be relatively flat in the second half, excluding the impact of the insurance recovery. Lastly, in fiscal 2026, we have incremental investment of approximately $0.09 of diluted earnings per share in new store openings, primarily through higher preopening expenses and store expenses.
Now we'd like to open the line for questions. Thank you.
[Operator Instructions] The first question comes from Aaron Grey with Alliance Global Partners.
2. Question Answer
First question I want to ask about is the margin profile, which was good for you guys this quarter. And I want to think about how that is going forward, particularly given you utilize the ERP to drive some cost savings. You seem to have had one of the higher gross margins in a couple of years. So as we think about efficiencies going forward, do you reinvest those back into the business given the softer consumer environment, let that drop to the bottom line? So just how we think about the profit versus sales growth as we reinvest potentially those cost savings?
I would say that the cost savings immediately from our investment in the ERP are going to be minimal. It will take a little while to get efficiencies from the new system and to work out bugs to the new system. Any cost savings that we do see, we usually reinvest in competitive pricing. And we look at every item that we sell and compare it to our competitors and decide where we should be in pricing, and we like to be on the leading edge of affordable pricing.
Appreciate that commentary. Second question for me. Just as we think about the comps, I know a lot of the commentary in terms of the trends has been based off the 2-year stack and some of the softer comps you see in the back half of the year. But maybe outside of just thinking off the 2-year stack, anything that you're seeing to get more comfortability in terms of that stack starting to improve in the back half of the year and as you go into fiscal year 2027?
Yes. I mean the first 2 quarters of this year were particularly difficult to comp well against last year because they were -- we had such strong comps last year. Starting in June of this year, our comps were substantially softer for the last 4 months of the year -- of our fiscal year. And we're pretty confident that we will see sales similar to what we have been seeing currently through those months, which gives us confidence that we will have substantially better comps from June through September of this year.
The next question comes from Chuck Cerankosky with Northcoast Research.
I was wondering how you would describe the consumer behavior in the most recently reported quarter to what you saw a year earlier and how things have changed since war in Iran broke out and how it's been trending since then?
Well, March was a particularly difficult month, and I think that the conflict in Iran was not helpful to the consumer sentiment in March. April was much better than March. And I think as we get further away from the conflict, the consumer sentiment will improve. And as compared to last year, definitely, consumers were more -- there was more robust consumer enthusiasm last year at this time.
How did that, call it, consumer distress manifest itself? Was it fewer items, fewer trips, more price sensitivity? Any insight on that?
As we reported, there was a 0.3% -- wasn't it 0.3%?
0.3 items.
Yes, 0.3 items per basket that we lost, which works out to about 3% of comp sales. And then there was definitely on the -- on our less loyal customers, definitely some pullback from those consumers. Our loyal customers shopped as normal.
We continue to see very good growth from that customer base. As you know, our {N}power now makes up 84% of revenue, just continuing to see great success, and we had really good numbers out of that, as Kemper said, on less loyal customers where we're seeing really kind of a slowdown.
Yes. And just to add on, as we were starting a program where we're working on really getting the penetration of our {N}power sales higher and also the number of customers into the -- that are current -- the 30% of customers that aren't currently {N}power members enrolled in {N}power, and I think we'll have some really good results towards our goals in regards to that issue starting in June.
This concludes our question-and-answer session. I would like to turn the conference back over to Kemper Isely for any closing remarks.
Thank you for joining us. We are committed to maximizing value for our stockholders. We believe that our offering of high-quality natural and organic products supported by rigorous product standards and always-affordable prices is differentiated and will support growing consumer demand over the long term. Continued investment in store development, people, processes and system support operational -- system support, operational discipline and long-term value creation. Thank you, and have a great day. Goodbye.
Thank you. The conference call has now concluded. Thank you for attending the Natural Grocers Second Quarter Fiscal Year 2026 Earnings Conference Call. You may now disconnect. Thank you.
Natural Grocers by Vitamin Cottage, Inc. — Q1 2026 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen. Welcome to the Natural Grocers First Quarter Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded.
I would now like to turn the conference over to Ms. Jessica Thiessen, Vice President, Treasurer for Natural Grocers. Ms. Thiessen, you may begin.
Good afternoon, and thank you for joining us for the Natural Grocers by Vitamin Cottage First Quarter Fiscal Year 2026 Earnings Conference Call. On the call with me today are Kemper Isely, Co-President; and Richard Hall�, Chief Financial Officer.
As a reminder, certain information provided during this conference call, including the company's outlook for fiscal 2026, contains forward-looking statements based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from those described in the forward-looking statements due to a variety of factors, including the risks and uncertainties detailed in the company's most recently filed Forms 10-Q and 10-K. The company undertakes no obligation to update forward-looking statements.
Our remarks today include references to adjusted EBITDA, which is a non-GAAP measure. Please see our earnings release for a reconciliation of adjusted EBITDA to net income. Today's earnings release is available on the company's website, and a recording of this call will be available on the website at investors.naturalgrocers.com. Now I will turn the call over to Kemper.
Thank you, Jessica, and good afternoon, everyone. During today's call, I will provide an overview of our financial results, highlight the key drivers of our performance and share an update on our key operational initiatives. Then Rich will discuss the first quarter results in greater detail and review our fiscal year guidance.
Our first quarter results were in line with expectations, including daily average comparable store sales growth of 1.7% and diluted earnings per share growth of 14% to $0.49. Based on our first quarter performance and outlook for the remainder of the fiscal year, we are maintaining our full year guidance. There are several key underlying trends that I would like to highlight. The first quarter sales comp increase of 1.7% was cycling an 8.9% comp last year. The 2-year comp of 10.6% continues to reflect a robust growth rate relative to the broader grocery retail industry. While first quarter sales were consistent with our outlook, we believe these trends reflected cautious consumer spending behaviors observed broadly across the grocery retail sector.
Additionally, the sales comp primarily reflected trends with customers who do not participate in our rewards program. We continue to see stronger sales growth by our {N}power Rewards Program members. We believe that our differentiated offering of high-quality natural and organic products at always affordable prices continues to deliver strong value for our customers and reinforce our competitive position amid economic uncertainty. Furthermore, we believe that our company's initiatives position us well to achieve sustainable long-term growth.
Next, I will review the performance of key operational initiatives. During the first quarter, {N}power Rewards Program net sales penetration increased 2 percentage points to 83%, supported by strong membership gains and higher traffic by {N}power customers. The continued expansion of both membership and sales penetration highlights our customers' appreciation for the program's value and benefits. {N}power remains an effective tool for optimizing promotional activity and strengthening customer engagement. Our Natural Grocers brand products represent value through premium quality at compelling prices. In the first quarter, our private label products accounted for 9.6% of total sales, up 70 basis points from a year ago. The strong growth reflects rising customer awareness, driven in part by more prominent marketing efforts as well as the impact of new product introductions. During the first quarter, we relocated 1 store. Relocations are a key element of our store development strategy as they typically generate accelerated sales growth off a higher sales base. Additionally, today, we are affirming our plan of opening 6 to 8 new stores in fiscal 2026 and are targeting 4% to 5% annual new store unit growth for the foreseeable future.
Yesterday, our company released its fiscal year 2025 sustainability report. The featured topic is our differentiated nutrition education program. Since my parents founded our company in 1955, we have offered free nutrition education because we believe it empowers our customers, crew and communities to improve their well-being. This long-standing commitment earned us the Shelby Report 2025 Sustainability in the Food Industry Award for advancing sustainable practices in the food sector and driving meaningful change through our nutrition education program. For further information about our nutrition education program, our rigorous product standards and commitment to our crew and communities, please refer to our sustainability report or visit our company's website.
Last but not least, an important component of our differentiated model is the best-in-class customer service provided by our good4u crew. I wish to express my deep appreciation to our crew for their continued commitment to delivering an exceptional shopping experience. Now I will turn our call over to Rich to discuss our financial results in greater detail and fiscal 2026 guidance.
Thank you, Kemper, and good afternoon. Our first quarter net sales increased 1.6% from the prior year period to $335.6 million. Daily average comparable store sales increased 1.7% and on a 2-year basis increased 10.6%. Our daily average comparable transaction count increased 1%. The daily average comparable transaction size increase of 0.7% included annualized product inflation of approximately 2% to 2.5%. Items per basket were down less than 0.5 an item year-over-year.
We continue to see the greatest sales growth in meat, dairy and produce, which are some of our most differentiated offerings. We saw a modest decline in the number of transactions using SNAP EBT in the first quarter. SNAP represents approximately 2% of net sales and the reduction in SNAP transactions was immaterial to our overall sales comp for the quarter.
Gross margin decreased 40 basis points to 29.5%, driven by lower product margin, primarily due to higher inventory shrink, the majority of which was driven by isolated events. Store expenses decreased 0.7%, primarily driven by expense management. Administrative expenses decreased 5.9%, primarily driven by costs incurred in the prior year period related to the Chief Financial Officer transition. Operating income increased 9.7% to $14.6 million. Net income increased 14% to $11.3 million and diluted earnings per share increased 14% to $0.49 in the first quarter. Adjusted EBITDA increased 3.1% to $23.5 million.
Turning to the balance sheet and cash flow. We ended the first quarter in a strong liquidity position, including $23.2 million in cash and cash equivalents, no outstanding borrowings and $67.6 million available for borrowing on our revolving credit facility. During the first quarter, we generated cash from operations of $21.1 million and invested $9.6 million in net capital expenditures, primarily for new and relocated stores, resulting in free cash flow of $11.6 million.
Today, we are affirming the company's fiscal year outlook that we originally provided in November. It continues to reflect both the opportunities we see in our differentiated market position and appropriate caution given the current consumer environment. Our outlook includes the following: open 6 to 8 new stores with the pace of openings weighted towards the back half of the fiscal year; relocate or remodel 2 to 3 existing stores; achieve daily average comparable store sales growth between 1.5% and 4%; achieve diluted earnings per share between $2 and $2.15; and direct $50 million to $55 million towards capital expenditures to support our growth initiatives.
In addition, our current expectation is that sales comps will be at the low end of our outlook range through the second quarter as we cycle strong comps in the prior year, while increasing slightly in the second half of the year as we cycle lower comps. Additionally, the comp range reflects the uncertainty in the consumer environment. 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, primarily depending on the level of promotional activity. We expect that year-over-year store expenses as a percentage of net sales will be relatively flat to slightly lower.
Lastly, in fiscal 2026, we are investing approximately $0.12 of diluted earnings per share in new store openings, primarily through higher preopening expenses and store expenses.
Now we'd like to open the line for questions. Thank you.
[Operator Instructions] The first question will come from Scott Mushkin with R5 Capital.
2. Question Answer
So I actually wanted to start off where you guys left off on the $0.12 headwind from the new stores. As we think about that going forward, is it going to be as dramatic? I think it wouldn't be as dramatic kind of the headwind as we think about next year and the year after. How should we think about that type of drag as we move out beyond this year?
Well, this year, we're accelerating our growth from 2 new stores to 8. So that definitely gives us quite a bit of more preopening expense for 6 more stores with preopening expense. So that's where that 12 basis points came from. Next year, if we open consistent 8 new stores and do a couple of remodels, it should be fairly flat going forward. If we add -- if we accelerate it to 10 or 12, then there would be a little bit more headwind. But it will probably be flat next year to 8 -- again, 8 to 9 new stores again next year.
And was it $0.12 or 12 basis points? So I just want to make sure I...
12 basis points. 11 basis points to 12 basis points.
$0.12.
$0.12.
Okay. So conceivably a pretty good tailwind, I guess, as you look out, depending on what happens with the rest of the business. Okay. So then switching gears to get some more thoughts on the shrink. I know you guys said that was kind of the biggest issue with the gross margin. And you called out, I think, some onetime isolated events. Can you give any more color on that? And are those isolated events going to continue? Or is that -- it was just, hey, gross margins actually would have been a lot better if this hadn't happened?
Yes, Scott, this is Rich. And one of the big items is we're cycling fairly low shrink in Q1 of last year. So last year was probably running about 15% below our 3-year average. This quarter, we're probably running about 10% above our 3-year average. So I would say a lot of that is sales velocity. And then we had some onetime items related to weather-related power outages that were obviously unexpected. We had some incremental shrink related to store closures as well. So that would be -- and then I'd say, a little bit of execution, operational execution that you tend to see quarter-over-quarter, but nothing overly material.
So it sounds like a lot -- do you have any size of that of the percentage of the decline in gross margins that would be attributed to power outages and stuff like that or no?
Well, I think in terms of just the cycling, the cycling was about 50% of that variance. And then I would say some of these anomalies were probably another 25% and then the balance of it would have been, I'd say, just standard variances.
All right. That's great color. Then my final question is just around the environment. And I've been doing this a long time, and I think a stack comp is useful, but also not necessarily the end all be all when an industry should be generally growing faster than it is right now, and this is not a statement to you guys, just kind of a general thought. And I was just -- if you kind of look at your customer base and you guys gave some good color on the {N}power. But if you look at it by segment, by age, who is coming in and driving a lot of that growth, are there any consistencies there that you would say, hey, like this demographic has definitely pulled back a little bit.
Well, the demographic that's income constrained is pulled back. And that's where you're losing customers right now. They're just nervous and their paychecks aren't keeping up with the rate of inflation, and they're looking for as inexpensive of alternatives as they possibly can find. And so that's where we've lost customers right now.
Have you seen an age reflection there? We've seen some data that suggests that the younger households are the most impacted? Or are you guys not really seeing that?
Not really. I mean there's definitely -- if they're income constrained, then they're pulling back. Does that make sense, too?
Yes. But with demographic wise, I mean, great data. We haven't seen sort of a shift in our demographics from third-party data that we get. So nothing material there. And I think that the shrinking basket that we've been seeing is really all around sort of cautious consumers who are very much seeking value. And the pullback that we've seen has not been in our {N}power customers, but our less engaged customers.
Our {N}power customers actually were really robust.
Yes. In this tough environment out there. So I was glad to see the numbers you put up. So anyway. All righty. Appreciate it.
The next question will come from Chuck Cerankosky with Northcoast Research.
I want to dive in a little bit on the new store opening program for this year. You've got 6 to 8 new openings. You've done 1 relo so far. Now that would count as a new opening and a closure. Any net closures for the year? And what's your definition of a relo and a remodel? Are they coincident events as we look at the storing program for this year?
No. We've had the closure -- we had a closure in our Austin Harbor store in Texas in October. And we don't -- we won't have any more closures this year, probably not any next year either. Anyway, the one relocation, that's a relocation. So we'll have 6 to 8 actual new stores and 1 to 3 relocations or remodels this year. So overall, we'll be from 8 to 11 -- I mean 8 to 11 actual remodel -- moves and new stores.
Okay. That's helpful. And as you're talking about the 3 strongest categories, which tend to be some of the more expensive purchases, how does that square with the cautious consumer? Or is that reflected in the reduction in the items per basket?
Well, supplements, which is our highest margin category, had a slight decline in sales for the quarter, but there was 0 inflation in the supplement sector, which kind of explains the decline in the category. So we had a slight -- very slight drop in items sold in the supplement area because we had 0 inflation in that category. Our other I would guess -- what the other ones be the two?
Body care.
Body care was similar and grocery, we actually had good growth.
Growth in units?
Yes. So I mean, yes, it was definitely body care and supplements where we saw the biggest decline in units. And then also household items.
Okay. And with supplements being a high gross margin category that showed up in the overall P&L then?
Yes, it did. It had a slight impact. And I mean, overall, our cash register ring margin was flat for the quarter. So we got -- we had some pickup in margin in some of the other categories.
This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Kemper Isely for any closing remarks. Please go ahead.
Thank you for joining us. We are committed to our differentiated business model of offering high-quality natural and organic products at always affordable prices. And we are confident in our ability to continue to drive profitable long-term growth and enhance value for all our stakeholders. Thank you, and have a great day. Bye now.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Natural Grocers by Vitamin Cottage, Inc. — Q4 2025 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen. Welcome to the Natural Grocers Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded.
I'd now like to turn the conference over to Ms. Jessica Thiessen, Vice President, Treasurer for Natural Grocers. Ms. Thiessen, you may begin.
Good afternoon, and thank you for joining us for the Natural Grocers by Vitamin Cottage Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. On the call with me today are Kemper Isely, Co-President; and Richard Hallé, Chief Financial Officer.
As a reminder, certain information provided during this conference call, including the company's outlook for fiscal 2026 contains forward-looking statements based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from those described in the forward-looking statements due to a variety of factors, including the risks and uncertainties detailed in the company's most recently filed Forms 10-Q and 10-K. The company undertakes no obligation to update forward-looking statements.
Our remarks today include references to adjusted EBITDA, which is a non-GAAP measure. Please see our earnings release for a reconciliation of adjusted EBITDA to net income.
Today's earnings release is available on the company's website, and a recording of this call will be available on the website at investors.naturalgrocers.com. Now I will turn the call over to Kemper.
Thank you, Jessica, and good afternoon, everyone. We are pleased with our fourth quarter performance with sales in line with guidance and diluted earnings per share above guidance. On today's call, I will highlight our financial results, including performance drivers and provide an update on our key operational initiatives. Then Rich will discuss our fourth quarter results in greater detail and review our fiscal year 2026 outlook.
Our fourth quarter sales were in line with guidance. Daily average comparable store sales increased 4.2%, and on a 2-year basis, increased 11.3%. The moderation in fourth quarter sales comps compared to the third quarter was driven by several factors. We cycled 7% comps in each of the fourth quarters of the previous two fiscal years.
As previously disclosed, UNFI's June 2025 cybersecurity incident constrained UNFI's ability to fulfill orders and distribute products to our stores and had a direct impact on our sales in June and July. Additionally, uncertainty in the economic environment has persisted and we saw consumer behavior shift toward more cautious retail spending in the fourth quarter.
Over the past several years, we have focused on operational execution, including refining targeted promotions and store productivity initiatives. That ongoing effort combined with expense leverage from higher sales resulted in an operating margin improvement of 90 basis points for the fourth quarter, driving our fiscal year 2025 diluted earnings per share to a record $2 per share.
We are proud that fiscal 2025 represented another year of record sales and earnings. Additionally, fiscal 2025 was our 22nd consecutive year of positive comparable store sales growth. Consumers continue to be drawn to our differentiated offering of high-quality natural and organic products, reflecting their prioritization of health and wellness, including food and nutrition. We believe that consumers' prioritization of health and wellness will prove to be resilient.
While we are seeing some macro pressures affecting the broader retail landscape, we believe that our commitment to always affordable prices provides compelling value for our customers, strengthening our competitive position during periods of economic uncertainty.
Next, I will share an update on our key priorities that have fueled recent growth and are expected to drive our long-term success. We continue to enhance the personalization and interactivity of our {N}power rewards program offerings. During the fourth quarter, {N}power net sales penetration held strong at 82%. The maturity and high penetration of our {N}power Rewards program enables efficient and relevant customer engagement, including communicating our differentiation to new members, personalizing offers to tenured members or presenting special offers to customers who haven't engaged with us recently.
Our Natural Grocers branded products continue to experience elevated growth. In the fourth quarter, our House branded products accounted for 8.8% of total sales, up from 8.4% a year ago. During fiscal 2025, we extended our Natural Grocers brand offerings with the launch of 119 new items, all of which exhibit premium quality at compelling prices.
Accelerating new store growth is another core element of our strategy. In fiscal 2025, we opened two new stores, relocated two stores and remodeled one store. Today, we are reiterating our plan of opening 6 to 8 new stores in fiscal 2026, underscoring the quality of our pipeline and execution capabilities. We are committed to 4% to 5% annual new store unit growth for the foreseeable future.
We also remain committed to enhancing value for our stockholders by maintaining a balanced approach to capital allocation. In addition to investing in our business to drive faster unit growth, we are proud to announce that we are increasing the quarterly cash dividend by 25% to $0.15 per common share, reflecting our strong fiscal 2025 operating performance and financial position as well as confidence in our ability to create long-term stockholder value.
In closing, I would like to thank our good4u crew, their commitment to operational excellence and exceptional customer service were instrumental in driving our strong results. We are fortunate to have crew who share an affinity for our founding principles and are dedicated to ensuring that our stores, operations and supply chain reflect these values.
Now I will turn our call over to Rich to discuss our financial results in greater detail and fiscal 2026 guidance.
Thank you, Kemper, and good afternoon. We are pleased with our fourth quarter results. Sales were in line with expectations and diluted earnings per share exceeded our outlook.
Net sales increased 4.2% from the prior year period to $336.1 million. Daily average comparable store sales increased 4.2%, and on a 2-year basis, increased 11.3%. Comps were at the lower end of our guidance range which we believe primarily reflects the shift in consumer retail spending. Our daily average comparable transaction count increased 2.4%, and our daily average comparable transaction size increased 1.8% primarily due to annualized product inflation of approximately 2%. Items for basket were relatively flat year-over-year.
In consideration of the broader macro environment, we continue to monitor consumer trends closely. We continued to see greater sales growth in our most differentiated offerings, including meat and dairy. These are often considered premium offerings because our product standards include humanely and sustainably sourced meat, pasture-raised in non-confinement dairy and a minimum standard of free-range eggs.
We saw a modest decline in the number of transactions using SNAP EBT in the fourth quarter. SNAP represents approximately 2% of net sales and the reduction in SNAP transactions was immaterial to our overall sales comp for the quarter.
Gross margin decreased 10 basis points to 29.5% driven by lower product margin. Store expenses as a percentage of net sales decreased 90 basis points primarily driven by lower long-lived asset impairment charges and expense leverage. This culminated in a net income increase of 31% to $11.8 million and diluted earnings per share of $0.51. Adjusted EBITDA increased 7.7% to $24.4 million.
Briefly touching on the full year results. In fiscal 2025, total revenue increased 7.2% to $1.33 billion. Our daily average comparable store sales growth was 7.3% and 14.3% on a 2-year basis. Gross margin improved 50 basis points compared to the prior year, driven by higher product margin primarily attributed to effective promotions, and store occupancy cost leverage. Store expenses as a percentage of sales were 50 basis points lower than the prior year, driven by expense leverage and lower long-lived asset impairment charges. For fiscal 2025, diluted earnings per share increased 36.1% to $2 compared to $1.47 in fiscal 2024. And adjusted EBITDA increased 17.5% to $97.9 million.
Turning to the balance sheet and cash flow. We ended the fourth quarter in a strong liquidity position including $17.1 million in cash and cash equivalents, no outstanding borrowings and $70.1 million available for borrowing on our revolving credit facility. During fiscal 2025, we generated cash from operations of $55.3 million and invested $31 million in net capital expenditures primarily for new and relocated stores, resulting in free cash flow of $24.3 million.
Now I would like to review the company's outlook, which reflects both the opportunities we see in our differentiated market position and appropriate caution given the current consumer environment. We believe our value proposition will continue to be compelling during periods of economic uncertainty. For fiscal year 2026, we expect to open 6 to 8 new stores, relocate or remodel 2 to 3 existing stores, achieve daily average comparable store sales growth between 1.5% and 4%, achieve diluted earnings per share between $2 and $2.15 and direct $50 million to $55 million towards capital expenditures to support our growth initiatives.
In addition, our outlook includes the benefits of our new store growth, targeted marketing focused on our value proposition and differentiation and initiatives focused on driving higher productivity across our operations. The pace of new store openings will be weighted towards the back half of the fiscal year. Our current expectation is that sales comps will be at the low end of our outlook range in the first half of the year as we cycle relatively strong comps in the prior year while increasing slightly in the second half of the year as we cycle lower comps.
Additionally, the comp range reflects the uncertainty in the consumer environment. 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, primarily depending on the level of promotional activity. We expect that year-over-year store expenses as a percentage of net sales will be relatively flat to slightly lower. Lastly, we are investing approximately $0.12 of diluted earnings per share in new store openings, primarily through higher preopening expenses and store expenses.
We continue to believe that we have significant opportunity to achieve sustainable long-term growth due to our alignment with consumer trends, strong customer engagement through our {N}power Rewards program, expansion of the Natural Grocers branded products, existing store productivity initiatives and investment in new store unit growth.
In closing, we had a solid quarter to conclude a record-setting fiscal year. We are confident in our ability to continue to drive profitable long-term growth and enhance value for all stakeholders. Now we'd like to open the line for questions. Thank you.
[Operator Instructions] Our first question today comes from Chuck Cerankosky with Northcoast Research.
2. Question Answer
Given the increased price sensitivity right now in the consumer environment and the company's 8.8% owned brands penetration, is this a good time to get that number higher and to make customers more aware of the value in the Natural Grocers brands?
Yes. I think that, that would be true. I mean, we definitely are marketing our own brand extensively right now. And we have some really compelling prices, particularly in our bulk items that we are promoting aggressively, and we don't have to discount those prices because they're already substantially better priced than our competitors.
Do you have any particular goals for the penetration over the next couple of years, like maybe 10%? I don't...
Our goal is to increase the penetration by 1 full percentage point per year. So we're at 8.8%, so in two years from now, we should be at 10.8% or even 11%.
The next question is from Scott Mushkin with R5 Capital.
So one of the things we hear from investors about just kind of generally the space of natural organic is that it's not the macro that it's similar to what we saw last decade that's kind of traditional supermarkets and others in the marketplace kind of caught up given what they saw with how stronger sales and others have been and are offering a lot of the same products at lower prices. What do you think about that thought process?
I think that, that's been going on since 1978. And we've done a really good job of differentiating ourselves from those -- from the other supermarkets and have enough an authentic story and an authentic brand that resonates with consumers, and it's helped us to build our business to over $1 billion business.
The conventional supermarkets in Costco and Walmart, they only sell the product because it sells. It isn't because of the story of the product. We sell the product because it is what we are. And so it makes a huge difference to our customers and keeps our customers incredibly loyal, and it also helps us to keep on growing and expanding our customer base. And companies like Whole Foods are kind of losing track of that by becoming, as they said, the Amazonification or whatever it was the Wall Street Journal article was the other day. And then the Forbes article that followed up on it. And so that's making our brand all the stronger. And then you have the wannabes like Sprouts who doesn't really -- I mean they sell stuff because they -- it sells, but they don't really have the standards that we do or the ethics that we do about the products that we sell.
And then Kemper, what specifically -- or Richard, what specifically in the business do you see that would kind of make you gravitate towards, "Hey, it's things have become much more challenging in the economy.", and that's the root of some of the more cautious comments?
Well, the people that are on the periphery of shopping in our stores that aren't our most loyal customers have definitely pulled back and gone. I don't know where they're shopping, but they pulled back. And that's made it so that we're just a little bit more cautious about our growth. But I think that some of our new marketing initiatives will start to gain traction in not this quarter, but next quarter, and we should see an uptick again in our growth.
I mean because it's no doubt, Scott, the economy is playing a factor today. I mean, we have massive economic uncertainty. Consumer sentiment is at historic lows, we've seen announcement of significant job layoffs, had the government shutdown, the loss of government benefits, tariffs and their impact on inflation. I mean the majority of Americans are expecting the tariffs will result in higher prices. You've had a pretty large...
Well, they are resulting in higher prices.
And they are. But there's an expectation of future higher prices from tariffs all of it is kind of creating this uncertainty, there's definitely, as you've heard, across all retail, a pullback by lower middle income consumers in a bifurcation in the consumer segment, where higher households are continuing to spend. But as we even heard this morning from Walmart, everybody is looking for value. And so we are going to lean in to our differentiation. Everybody is looking for value, part of our filing principles is always affordable prices. And we're going to continue to lean hard into that. And as Kemper said, we're also very highly differentiated in terms of the quality of our shopping experience. We provide access to nutrition education and we have high product standards that you can trust. So we're going to continue to lean into those things.
Our core customer base is resilient. Our core customer base is growing at a healthy rate. So we have a lot of confidence that there is a lot of economic uncertainty that is certainly a driver. The natural and organics segment, yes, is pulling back. But so is the entire, I think, segment overall. And we still believe in the health and wellness trends. I mean you look at GLP-1 penetration rates, they've doubled over the last year. There's significant interest in continuing for many more Americans to try those drugs. We understand that those individuals are looking for more nutritious options post that. And so it's not linear, right? I mean as Kemper said, Natural & Organic has been going through multiple cycles over the last 4, 5 decades, and we'll continue to do that. But we believe the trends, the long-term trends that they will continue to have 4% to 6% industry growth, it's just not going to be a straight line.
Thanks for that color. And then I actually had just one more, and I apologize because my model is not in front of me. So I probably should know this answer off the top of my head. But are you guys thinking free cash flow next year will be positive, flat? And what's your thought process around '26 free cash flow?
Yes. Free cash flow will be positive next year. Yes, that's our expectation. Yes, we are investing more in CapEx, right? We are talking about increasing store openings, continuing to do relocations and remodels. We are looking at -- we're guiding $50 million to $55 million in CapEx to support those initiatives. We're excited about the real estate pipeline that we have and about the growth prospects. And we've really refined our site selection process and are excited about the communities that we're going in and the positive impact that those communities will have to the overall business.
And then also, we're strategically buying some of our buildings so just to add a little bit more color to the CapEx.
Yes.
All right. Well, guys, I appreciate it. And for the record, I kind of -- I definitely agree with you guys on the economy. I think it's a little bit tough sliding out there right now. But thanks for all the color.
I'm showing no further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Kemper Isely for any closing remarks.
Thank you for joining us to discuss our fourth quarter results. We take great pride in our sales and profitability growth in fiscal year 2025 and in recent years. We are committed to maximizing value for our stockholders. As we look forward to fiscal year 2026, we expect to build upon our momentum by executing to our founding principles, including highlighting our always affordable pricing strategy and differentiated product offering, emphasizing operational excellence and delivering on our new store unit growth plans.
Thank you, and have a great day. Bye now.
The conference call is now concluded. Thank you for attending the Natural Grocers Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. You may now disconnect.
Financial data from Natural Grocers by Vitamin Cottage, Inc.
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Mar '26 |
+/-
%
|
||
| Revenue | 1,338 1,338 |
3%
3%
100%
|
|
| - Direct Costs | 939 939 |
3%
3%
70%
|
|
| Gross Profit | 399 399 |
3%
3%
30%
|
|
| - Selling and Administrative Expenses | 303 303 |
0%
0%
23%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 95 95 |
15%
15%
7%
|
|
| - Depreciation and Amortization | 31 31 |
27%
27%
2%
|
|
| EBIT (Operating Income) EBIT | 64 64 |
10%
10%
5%
|
|
| Net Profit | 48 48 |
17%
17%
4%
|
|
In millions USD.
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Natural Grocers by Vitamin Cottage, Inc. Stock News
Company Profile
Natural Grocers by Vitamin Cottage, Inc. engages in the retail of natural and organic groceries and dietary supplements. It products include natural & organic food, dietary supplements, natural body care, household and pet care products. The company was founded by Margaret Isely and Henry Philip Isely in 1955 and is headquartered in Lakewood, CO.
StocksGuide Premium
| Head office | United States |
| CEO | Zephyr Isely |
| Employees | 3,853 |
| Founded | 1955 |
| Website | www.naturalgrocers.com |


