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11/22/2021

Natural Grocers private label sales help set record sales for fiscal 2021

Natural Grocers reported its Q4 2021 results, showing increases across the board in part due to an expansion of the company's private label assortment.
Zachary Russell
Associate Editor
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Organic grocery chain Natural Grocers shared its Q4 results from 2021 last week, with a record increase in net sales and income closing out the year in strong fashion; 2021 was the company’s 66th year in businesses.

Natural Grocers’ private brands played a large role in the success, something the company recently had its customers choose their favorites. In the fourth quarter, private brands represented 7.1% of sales, per the financial call. In all of 2021, Natural Grocers grew its private brand offerings by 185 SKUs, now totaling approximately 1,000 own brand items, the retailer added during the call.

"Our fiscal 2021 performance resulted in a record $1.1 billion in net sales and $0.91 of diluted earnings per share,” said Kemper Isely, co-president of Natural Grocers. “Fiscal 2021 was our 18th consecutive year of positive daily average comparable store sales growth. We finished the year with a strong fourth quarter. Diluted earnings per share was up 100% to $0.32, above our expectations. Daily average comparable store sales accelerated and gross margin improved, which we leveraged across a more normalized level of operating expense compared to last year.  An increase in transaction counts was slightly offset by a moderation in transaction size, however, the average basket has remained elevated as compared to the pre-pandemic level, up over 20% compared to the fourth quarter of 2019."

Natural Grocers increased its private brand assortment by 185 SKUs in 2021, now totaling approximately 1,000 own brand items.

During Q4 fiscal 2021, net sales increased $8.5 million, or 3.2%, to $272.6 million, compared to the fourth quarter of fiscal 2020, as a result of a $6.7 million increase in comparable store sales and a $1.8 million increase in new store sales. Daily average comparable store sales increased 2.5% in the fourth quarter of fiscal 2021. On a two-year stacked basis, daily average comparable store sales increased 15.7%. The daily average comparable store sales increase in Q4 was a 3.4% increase in daily average transaction count partially offset by a 0.8% decrease in daily average transaction size. Fourth quarter net sales were attributed to COVID-19 pandemic trends, inflation, marketing initiatives, promotional campaigns and increased membership in and usage of the {N}power customer loyalty program.

Gross profit during the fourth quarter of fiscal 2021 increased 4.7%, to $75.8 million. Gross profit reflects earnings after both product and occupancy expenses. Gross margin increased to 27.8% during the fourth quarter of fiscal 2021, compared to 27.4% in the fourth quarter of fiscal 2020. The increase in gross margin was a result of improved product margin and store occupancy leverage. 

Net income for the fourth quarter of fiscal 2021 was $7.2 million, or $0.32 of diluted earnings per share, compared to net income of $3.7 million, or $0.16 of diluted earnings per share for the fourth quarter of fiscal 2020.

During the fourth quarter of fiscal 2021, Natural Grocers opened one store and relocated/remodeled two stores, ending the quarter with a total store count of 162 stores in 20 states. During fiscal 2021, the company opened three new stores and relocated/remodeled five stores.