Natural Grocers Raises Outlook Following Strong Q3
Third-quarter sales at Natural Grocers by Vitamin Cottage were up more than 6% as its performance exceeded company expectations.
For the period ended June 30, net sales were up 6.3% to $328.7 million, driven by a $19 million increase in comparable store sales and a $3.4 million increase in new store sales, which were partially offset by a $2.8 million decrease in net sales related to closed stores. Daily average comparable store sales increased 7.4% in the third quarter, consisting of a 4.8% increase in daily average transaction count and a 2.4% increase in daily average transaction size.
Net income in the quarter was $11.6 million, or 50 cents diluted earnings per share, compared to net income of $9.2 million, or 40 cents diluted earnings per share, for the comparable quarter the previous year.
"Our third-quarter performance exceeded our expectations, and we again delivered outstanding results across all key metrics,” said Kemper Isely, co-president of Natural Grocers. “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.”
Natural Grocers estimates that net sales in the quarter were adversely affected between $3.5 million and $4 million by the cybersecurity attack suffered by United Natural Foods, Inc.
The incident temporarily impacted UNFI’s ability to fulfill orders and distribute products to stores, resulting in product shortages in June and July. In the weeks following the incident, Natural Grocers said it worked with UNFI to minimize disruptions and restore normalized levels of product distribution to its stores.
During a conference call to discuss results, Isely said this was the 10th consecutive quarter with positive transaction count comp and its sixth consecutive quarter with an increase in items per basket. Categories including meat, dairy and produce were among those seeing the highest comparable store sales growth.
“We believe our strong sales performance over the past two years is evidence of the relevance of our offering for an increasing number of consumers, the overall strength of our business model and the productivity of our initiatives,” Isely said.
Natural Grocers raised its outlook for the remainder of its fiscal year, now forecasting daily average comparable store sales growth of between 7.25% and 7.75% (previously 6.5% and 7.5%) and diluted earnings per share of between $1.90 and $1.95 (previously $1.78 to $1.86).
The specialty grocer also plans on opening two new stores and completing three remodels for the remainder of its fiscal year. Store opening plans for 2026 include six to eight new locations.
