Natural Grocers by Vitamin Cottage Q2 2025 Earnings Call Highlights Strong Performance Across Key Metrics

Natural Grocers by Vitamin Cottage reported Q2 2025 earnings, exceeding expectations with outstanding results across key metrics. The company delivered growth in sales, comparable sales, and adjusted EBITDA. Chairman & Co-President Kemper Isely highlighted financial results and provided an update on the company's performance.

Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) reported its second quarter fiscal 2025 earnings, exceeding market expectations across key financial metrics. The company announced its third-quarter results, highlighting significant growth in sales, comparable sales, and adjusted EBITDA. Chairman and Co-President Kemper Isely commented on the strong performance and provided an update on the company's outlook.

Key Highlights

- Sales Growth: Net sales increased by 6.3% to $328.7 million, driven by a 7.4% increase in daily average comparable store sales and a 14.6% two-year basis increase.
- Earnings: Net income surged by 26.0% to $11.6 million, with diluted earnings per share reaching $0.50, up from $0.40 in the same period last year.
- Adjusted EBITDA: Adjusted EBITDA rose by 10.1% to $24.4 million, reflecting improved operational efficiency.
- Operating Margin: The operating margin improved by 50 basis points to 4.7%, driven by effective promotions and enhanced store productivity.

Challenges and Resilience

Despite facing a cybersecurity incident with primary distributor United Natural Foods, Inc. (UNFI) in June, which temporarily impacted product distribution, Natural Grocers demonstrated resilience. The company estimates that the disruption adversely impacted its third-quarter fiscal 2025 daily average comparable store sales by 1.0 to 1.5 percentage points and diluted earnings per share by $0.04 to $0.05. However, operations have since normalized, and the company does not expect the disruption to materially impact future performance.

Outlook

Natural Grocers has raised its fiscal 2025 outlook for daily average comparable store sales growth and diluted earnings per share. The company expects:

- Daily Average Comparable Store Sales Growth: 7.25% to 7.75%
- Diluted Earnings Per Share: $1.90 to $1.95

Additionally, the company anticipates opening 2 new stores and remodeling 3 stores, with capital expenditures ranging from $30 to $33 million.

Conclusion

Natural Grocers by Vitamin Cottage's strong Q2 2025 performance underscores its ability to capitalize on the growing demand for natural and organic products. The company's resilience in the face of operational challenges and its optimistic outlook position it well for continued growth.

References

[1] https://www.marketscreener.com/news/natural-grocers-by-vitamin-cottage-announces-third-quarter-fiscal-2025-results-ce7c5edcd98aff27