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- **Record Financials**: FY25 diluted EPS of $2, 7.2% revenue growth, and 17.5% adjusted EBITDA increase.
- **Branded Growth**: Owned products at 8.8% of sales, targeting 10.8% in two years.
- **Expansion Plans**: 6-8 new stores in FY26, 25% dividend hike to $0.15/share.
- **Resilience**: Core customer base growing despite macro uncertainty, with positive free cash flow expected in FY26.

**【Management Opening Remarks】**
- Earnings release and forward-looking statements were noted, with a reminder that adjusted EBITDA is a non-GAAP measure.

**【CEO Summary Section】**
- **Q4 Performance**: Sales in line with guidance, daily average comparable store sales up 4.2% YoY, 11.3% on a 2-year basis. Operating margin improved 90 basis points, driving record diluted EPS of $2.
- **Operational Strength**: 22nd consecutive year of positive comparable store sales growth, emphasizing affordable prices and health-focused products.
- **Initiatives**: 
  - {N}power Rewards program penetration at 82%, with targeted promotions.
  - Natural Grocers branded products at 8.8% of sales (vs. 8.4% YoY), with 119 new items launched in FY25.
  - 6-8 new stores planned for FY26, maintaining 4%-5% annual unit growth.
  - Quarterly dividend increased 25% to $0.15/share.

**【CFO Financial Commentary】**
- **Q4 Financials**: Net sales $336.1M (+4.2% YoY), gross margin 29.5% (-10bps), store expenses -90bps as % of sales. Net income $11.8M (+31%), adjusted EBITDA $24.4M (+7.7%).
- **FY25 Results**: Revenue $1.33B (+7.2%), comparable store sales +7.3% (14.3% 2-year), diluted EPS $2 (+36.1%), adjusted EBITDA $97.9M (+17.5%).
- **FY26 Outlook**: 
  - Store openings: 6-8 new, 2-3 relocations/remodels.
  - Sales growth: 1.5%-4% daily average comparable.
  - EPS: $2-$2.15.
  - CapEx: $50-55M, with positive free cash flow expected.

**【Q&A Key Highlights】**
- **Owned Brands Growth**: Target 1% annual penetration increase, aiming for 10.8% in two years.
- **Competitive Differentiation**: Emphasis on product authenticity, ethical sourcing, and customer loyalty vs. conventional retailers.
- **Economic Challenges**: Consumer pullback in lower-income segments, but core customers resilient. FY26 strategy focuses on value, differentiation, and new store expansion.
- **Free Cash Flow**: Expected positive in FY26, supporting growth initiatives and strategic real estate purchases.

Natural Grocers by Vitamin Cottage, Inc. (NGVC) Q4 2025 Earnings Call Transcript

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