Natural Grocers Turns in Strong Q3 Performance
Natural Grocers by Vitamin Cottage, Inc. just wrapped its third quarter and it was a solid one for the organic and natural retailer. On a year over year (YoY), net sales rose 6.3% to top $328.7 million and comps jumped 7.4%.
As shoppers seemingly responded well to the grocer’s offerings, the latest balance sheet showed a robust 26% gain in net income, which came in at $11.6 million for the three-month period ending June 30. Adjusted EBITDA was also well into the proverbial black, moving up 10.1% to $24.4 million, while gross profit edged 8.8% higher to reach $7.9 million.
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Co-President Kemper Isely said that the grocer’s Q3 performance exceeded expectations.
“We believe that our value offering of high-quality, natural and organic products at Always Affordable prices resonates with consumers' increasing prioritization of health and wellness, including food and nutrition," he remarked. "Strong sales combined with effective promotions and enhanced store productivity helped drive a 50 basis-point improvement in our operating margin, along with a 25% increase in diluted earnings per share.”
Isley also addressed the cyberattack that disrupted supply from its primary distributor, United Natural Foods, Inc. (UNFI). “We estimate that the disruption to our operations adversely impacted our 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,” he shared, adding that operations have mostly stabilized in the ensuing weeks. “We do not expect the disruption to materially impact our operations or financial performance in the future."
Looking ahead, the retailer is raising its full fiscal year outlook, anticipating an increase in comps and EPS. Natural Grocers is planning to add two stores during the rest of FY25, versus the previously planned three to four new locations. Three remodels are in the works for the remainder of the year, too.
In an Aug. 8 earnings call, Isley underscored the grocer’s growth trajectory. “To date, during fiscal 2025, we have opened two new stores, relocated two stores, and remodeled one store. Store unit growth and development is a company priority. I am pleased to announce that we are accelerating store unit growth and plan to open six to eight new stores in fiscal 2026,” he said.
Isley continued, “With a consistent track record of strong financial and operating performance over the past several years, we are well positioned to execute this plan. We have already signed leases for five future new stores and are in negotiations on another five sites. Moreover, our new store pipeline includes approximately 75 vetted and approved communities in which we are actively pursuing real estate opportunities.”
Known for its extensive private label assortment, family-operated Natural Grocers by Vitamin Cottage Inc. operates 169 stores in 21 states. The Lakewood, Colo.-based natural and organic grocer is No. 93 on The PG 100, Progressive Grocer’s 2025 list of the top food and consumables retailers in North America. PG also named the company among its 10 Most Sustainable Grocers for 2025.
