Financial Data and Key Metrics Changes - The first quarter net sales increased by 1.6% year-over-year to $335.6 million, with daily average comparable store sales growth of 1.7% and a two-year comparable sales growth of 10.6% [10][11] - Diluted earnings per share grew by 14% to $0.49, while net income increased by 14% to $11.3 million [11][12] - Adjusted EBITDA rose by 3.1% to $23.5 million [11] Business Line Data and Key Metrics Changes - The {N}power rewards program net sales penetration increased by 2 percentage points to 83%, indicating strong membership gains and higher traffic from {N}power customers [6] - Private label products accounted for 9.6% of total sales, up 70 basis points from the previous year, reflecting increased customer awareness and marketing efforts [7] Market Data and Key Metrics Changes - The company observed cautious consumer spending behaviors across the grocery retail sector, impacting sales growth, particularly among customers not participating in the rewards program [5] - The greatest sales growth was seen in meat, dairy, and produce, which are key differentiated offerings [10] Company Strategy and Development Direction - The company plans to open six to eight new stores in fiscal 2026 and aims for 4%-5% annual new store unit growth [8] - The company emphasizes its commitment to sustainability and nutrition education, which has earned recognition in the industry [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the cautious consumer environment has led to a pullback in spending, particularly among income-constrained demographics [30] - The outlook for fiscal 2026 includes maintaining comparable store sales growth between 1.5% and 4% and achieving diluted earnings per share between $2 and $2.15 [13] Other Important Information - The gross margin decreased by 40 basis points to 29.5%, primarily due to higher inventory shrink, which was attributed to isolated events [11] - The company ended the quarter with $23.2 million in cash and cash equivalents and no outstanding borrowings [12] Q&A Session Summary Question: Impact of new store openings on earnings - Management indicated that the $0.12 headwind from new stores is expected to be flat going forward if the pace of openings remains consistent [17][18] Question: Details on gross margin decline due to shrink - Management explained that the decline in gross margin was influenced by cycling low shrink from the previous year and some one-time events like weather-related power outages [25][26] Question: Consumer demographics and spending behavior - Management noted that income-constrained customers have pulled back on spending, but there has not been a significant demographic shift in their customer base [30][36] Question: Clarification on new store openings and relocations - Management confirmed one closure and one relocation, with plans for six to eight new stores and additional relocations or remodels [43]

Financial Data and Key Metrics Changes - The first quarter net sales increased by 1.6% year-over-year to $335.6 million, with daily average comparable store sales growth of 1.7% and a two-year comparable sales growth of 10.6% [10][11] - Diluted earnings per share grew by 14% to $0.49, while net income also increased by 14% to $11.3 million [11][12] - Adjusted EBITDA rose by 3.1% to $23.5 million [11] Business Line Data and Key Metrics Changes - The NPower rewards program net sales penetration increased by 2 percentage points to 83%, indicating strong membership gains and higher traffic from NPower customers [6] - Private label products accounted for 9.6% of total sales, up 70 basis points from the previous year, reflecting increased customer awareness and marketing efforts [7] Market Data and Key Metrics Changes - The company observed cautious consumer spending behaviors across the grocery retail sector, impacting overall sales growth [5] - The greatest sales growth was seen in meat, dairy, and produce, which are among the company's most differentiated offerings [10] Company Strategy and Development Direction - The company plans to open 6-8 new stores in fiscal 2026 and aims for 4%-5% annual new store unit growth for the foreseeable future [8] - The company emphasizes its commitment to sustainability and nutrition education, which has been recognized with industry awards [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the demographic of income-constrained customers has pulled back, affecting sales, while NPower customers showed robust performance [29][35] - The company expects modest inflation throughout the year and anticipates that year-over-year gross margin will remain relatively flat [13][14] Other Important Information - The company ended the first quarter with $23.2 million in cash and cash equivalents and no outstanding borrowings, indicating a strong liquidity position [12] - The company generated cash from operations of $21.1 million and invested $9.6 million in net capital expenditures [12] Q&A Session Summary Question: Impact of new store openings on future earnings - Management indicated that the $0.12 headwind from new stores is expected to be flat going forward if the pace of openings remains consistent [17][19] Question: Details on gross margin decline due to shrink - Management explained that the decline in gross margin was primarily due to higher inventory shrink, with some isolated events contributing to the issue [22][24] Question: Customer demographics and spending behavior - Management noted that income-constrained customers are pulling back, but there has been no significant demographic shift in their customer base [29][34] Question: New store opening program and closures - Management confirmed one closure and stated that there would be no further closures this year, with plans for 6-8 new stores and 1-3 relocations or remodels [40][41] Question: Sales growth in high-margin categories - Management acknowledged a slight decline in sales for supplements, which are high-margin, but noted overall cash register ring margin was flat for the quarter [42][46]

Financial Data and Key Metrics Changes - The first quarter net sales increased by 1.6% year-over-year to $335.6 million, with daily average comparable store sales growth of 1.7% and a two-year comparable sales growth of 10.6% [10][11] - Diluted earnings per share grew by 14% to $0.49, while net income increased by 14% to $11.3 million [11][12] - Adjusted EBITDA rose by 3.1% to $23.5 million [11] Business Line Data and Key Metrics Changes - The NPower rewards program net sales penetration increased by 2 percentage points to 83%, indicating strong membership gains and higher traffic from NPower customers [6] - Private label products accounted for 9.6% of total sales, up 70 basis points from the previous year, reflecting increased customer awareness and new product introductions [6] Market Data and Key Metrics Changes - The company observed cautious consumer spending behaviors across the grocery retail sector, impacting sales growth, particularly among customers not participating in the rewards program [5] - The greatest sales growth was seen in meat, dairy, and produce categories, which are among the company's most differentiated offerings [10] Company Strategy and Development Direction - The company plans to open 6-8 new stores in fiscal 2026 and aims for 4%-5% annual new store unit growth for the foreseeable future [7][13] - The company emphasizes its commitment to providing high-quality, natural, and organic products at affordable prices, which reinforces its competitive position amid economic uncertainty [5][48] Management's Comments on Operating Environment and Future Outlook - Management noted that the cautious consumer environment has led to a decline in transactions among income-constrained customers, who are seeking less expensive alternatives [29][33] - The company expects modest inflation throughout the year and anticipates that year-over-year gross margin will remain relatively flat, depending on promotional activity [13][14] Other Important Information - The company released its fiscal year 2025 sustainability report, highlighting its commitment to nutrition education and sustainable practices [8] - The company ended the first quarter with a strong liquidity position, including $23.2 million in cash and cash equivalents and no outstanding borrowings [12] Q&A Session Summary Question: Impact of new store openings on future earnings - Management indicated that the $0.12 headwind from new stores is expected to be flat going forward if the pace of openings remains consistent [17][19] Question: Details on gross margin decline due to shrink - Management explained that the decline in gross margin was primarily due to higher inventory shrink, with some isolated events contributing to the increase [22][24] Question: Customer demographics and spending behavior - Management noted that income-constrained customers have pulled back on spending, but there has not been a significant demographic shift in their customer base [29][33]

Core Insights - Natural Grocers by Vitamin Cottage, Inc. reported first quarter results for fiscal 2026, affirming its full-year outlook amid economic uncertainty [2][4]. Financial Performance - Net sales increased by $5.4 million, or 1.6%, to $335.6 million compared to the first quarter of fiscal 2025, driven by a $5.7 million increase in comparable store sales and a $2.4 million increase in new store sales [4][11]. - Daily average comparable store sales rose by 1.7%, with a 1.0% increase in daily average transaction count and a 0.7% increase in daily average transaction size [4]. - Gross profit slightly increased to $98.9 million, but gross margin decreased by 40 basis points to 29.5% due to lower product margins from higher inventory shrink [5]. - Operating income increased by 9.7% to $14.6 million, with an operating margin of 4.4%, up from 4.0% in the prior year [8]. - Net income rose by 14.0% to $11.3 million, translating to diluted earnings per share of $0.49, compared to $0.43 in the same quarter last year [8][11]. - Adjusted EBITDA increased by 3.1% to $23.5 million, with an Adjusted EBITDA margin of 7.0% [9][29]. Cost Management - Store expenses decreased by 0.7% to $73.0 million, with store expenses as a percentage of net sales dropping to 21.8% from 22.3% [6]. - Administrative expenses fell by 5.9% to $10.8 million, with a decrease in percentage of net sales from 3.5% to 3.2% [7]. Cash Flow and Capital Expenditures - The company generated $21.1 million in cash from operations and invested $9.6 million in net capital expenditures during the first three months of fiscal 2026 [12]. - As of December 31, 2025, the company had $23.2 million in cash and cash equivalents, with no outstanding borrowings on its $70.0 million revolving credit facility [10]. Future Outlook - The company is affirming its fiscal 2026 outlook, projecting 6 to 8 new stores, 2 to 3 relocations/remodels, daily average comparable store sales growth of 1.5% to 4.0%, diluted earnings per share of $2.00 to $2.15, and capital expenditures of $50 to $55 million [14].

Financial Performance - Net sales for Q1 fiscal 2026 increased by $5.4 million, or 1.6%, to $335.6 million compared to Q1 fiscal 2025, driven by a $5.7 million increase in comparable store sales [4] - Net income for Q1 fiscal 2026 increased by 14.0% to $11.3 million, with diluted earnings per share of $0.49, compared to $9.9 million, or $0.43 diluted earnings per share, in Q1 fiscal 2025 [8] - Adjusted EBITDA for Q1 fiscal 2026 was $23.5 million, reflecting a 3.1% increase from $22.8 million in Q1 fiscal 2025 [9] - EBITDA increased by 6.2% to $22.620 million for the first quarter of fiscal 2026, compared to $21.298 million for the first quarter of fiscal 2025, representing 6.7% of net sales [28] - Adjusted EBITDA rose by 3.1% to $23.525 million for the first quarter of fiscal 2026, compared to $22.820 million for the first quarter of fiscal 2025, accounting for 7.0% of net sales [29] Sales and Store Performance - Daily average comparable store sales rose by 1.7% in Q1 fiscal 2026, with a 1.0% increase in daily average transaction count and a 0.7% increase in daily average transaction size [4] - The company plans to open 6 to 8 new stores and relocate/remodel 2 to 3 stores in fiscal 2026, with a projected daily average comparable store sales growth of 1.5% to 4.0% [13] Expenses and Margins - Gross margin decreased by 40 basis points to 29.5% in Q1 fiscal 2026, down from 29.9% in Q1 fiscal 2025, primarily due to higher inventory shrink [5] - Store expenses decreased by 0.7% to $73.0 million, representing 21.8% of net sales, down from 22.3% in Q1 fiscal 2025 [6] - Administrative expenses decreased by 5.9% to $10.8 million, accounting for 3.2% of net sales, down from 3.5% in Q1 fiscal 2025 [7] Cash Flow and Liquidity - As of December 31, 2025, the company had $23.2 million in cash and cash equivalents and generated $21.1 million in cash from operations during Q1 fiscal 2026 [11] - Net cash provided by operating activities was $21.134 million for the three months ended December 31, 2025, significantly up from $2.682 million in the same period of 2024 [25] - Cash and cash equivalents at the end of the period increased to $23.210 million from $6.316 million year-over-year [25] Shareholder Returns - The company declared a quarterly cash dividend of $0.15 per common share, payable on March 18, 2026 [12] - The company incurred $3.455 million in dividends to shareholders, up from $2.749 million in the previous year [25] Other Financial Metrics - The company reported a decrease in accounts payable by $11.993 million, from a decrease of $12.970 million in 2024 to a decrease of $977 thousand in 2025 [25] - Interest expense, net, decreased to $713 thousand from $923 thousand year-over-year [28] - The company reported a loss on impairment of long-lived assets and store closing costs of $45 thousand, down from $87 thousand in the previous year [28] - The acquisition of property and equipment not yet paid was $6.318 million, compared to $3.828 million in the prior year [25]

Financial Performance - Net sales for the three months ended December 31, 2025, increased to $335,579,000, up from $330,221,000 in the same period of 2024, representing a growth of 1.1%[20] - Gross profit for the same period was $98,859,000, slightly up from $98,824,000, indicating a stable gross margin[20] - Operating income rose to $14,647,000, compared to $13,348,000 in the prior year, reflecting an increase of 9.7%[20] - Net income for the quarter was $11,334,000, an increase from $9,938,000 year-over-year, marking a growth of 14.0%[20] - Basic net income per share increased to $0.49 from $0.43, a rise of 13.9%[20] - EBITDA for the three months ended December 31, 2025, was $22.6 million, an increase of $1.3 million, or 6.2%, compared to $21.3 million for the same period in 2024[95] - Adjusted EBITDA for the three months ended December 31, 2025, was $23.5 million, an increase of $0.7 million, or 3.1%, compared to $22.8 million for the same period in 2024[95] - Daily average comparable store sales increased by 1.7% for the three months ended December 31, 2025, compared to the same period in 2024[95] - Net income was $11.3 million, or $0.49 diluted earnings per share, for the three months ended December 31, 2025, compared to $9.9 million, or $0.43 diluted earnings per share, for the same period in 2024[119] Assets and Liabilities - Total current assets decreased slightly to $166,808,000 from $168,075,000, a decline of 0.8%[18] - Total liabilities decreased to $448,545,000 from $458,109,000, a reduction of 2.3%[18] - Total stockholders' equity increased to $220,011,000 from $212,395,000, reflecting a growth of 3.8%[18] - Cash and cash equivalents at the end of the period increased to $23,210,000 from $17,116,000, a growth of 35.7%[22] - The Company had $67.6 million available for borrowing under its Credit Facility as of December 31, 2025, down from $70.1 million as of September 30, 2025[52] - The Company had no revolving loan amounts outstanding under the Credit Facility as of December 31, 2025[52] Expenses - Store expenses decreased by $0.5 million, or 0.7%, to $73.0 million for the three months ended December 31, 2025[114] - Administrative expenses decreased by $0.7 million, or 5.9%, to $10.8 million for the three months ended December 31, 2025[115] - The Company incurred gross interest expense of $0.8 million for the three months ended December 31, 2025, compared to $1.0 million for the same period in 2024, showing a decrease of 20%[55] - The total accrued expenses decreased to $31.734 million as of December 31, 2025, from $37.236 million as of September 30, 2025[79] Cash Flow - Net cash provided by operating activities increased by $18.5 million, or 688.0%, to $21.1 million for the three months ended December 31, 2025, compared to $2.7 million for the same period in 2024[133] - Cash and cash equivalents at the end of the period were $23.2 million, up from $6.3 million at the end of December 31, 2024[132] - Net cash used in investing activities increased by $0.2 million, or 1.7%, to $9.6 million for the three months ended December 31, 2025[134] - Net cash used by financing activities was $5.5 million for the three months ended December 31, 2025, compared to net cash provided of $4.2 million for the same period in 2024[136] Store Operations - The company operated 168 stores as of December 31, 2025, down from 169 stores as of September 30, 2025[28] - The company operated 168 stores in 21 states as of December 31, 2025, with plans to open six to eight new stores in fiscal year 2026[92][94] - The company aims for an annual new store unit growth rate of 4% to 5% for the foreseeable future[94] Lease and Property - The Company reported a total property and equipment net value of $189.525 million as of December 31, 2025, up from $182.741 million as of September 30, 2025[75] - The Company recognized operating cash flows from operating leases of $11.467 million for the three months ended December 31, 2025, slightly down from $11.476 million in 2024[71] - The weighted-average remaining lease term for operating leases decreased to 9.3 years as of December 31, 2025, from 9.7 years in 2024[71] - Total future undiscounted lease payments amount to $407.837 million, with $338.909 million related to operating leases and $68.928 million to finance leases[72] - The Company had 24 leases classified as finance leases as of December 31, 2025, down from 25 leases as of September 30, 2025[54] Dividends and Share Repurchase - The Company paid a quarterly cash dividend of $0.15 per share in the first quarter of fiscal year 2026, up from $0.12 per share in the first quarter of fiscal year 2025, representing a 25% increase[58] - The company did not repurchase any shares during the three months ended December 31, 2025, leaving $8.1 million available for future repurchases under the share repurchase program[128] - A quarterly cash dividend of $0.15 per share was paid in the three months ended December 31, 2025, with another dividend approved for March 18, 2026[129] Regulatory Compliance - Certifications required under the Sarbanes-Oxley Act of 2002 were included, ensuring compliance and accountability from principal executive and financial officers[31.1][31.2][31.3] - The company continues to adhere to the requirements of the Securities Exchange Act of 1934, demonstrating commitment to regulatory standards[160] - The report includes notes to the unaudited interim consolidated financial statements, offering additional context on financial results[101] - The company’s filings are not deemed filed with the SEC and are not to be incorporated by reference into any future filings, ensuring clarity in regulatory compliance[101] Strategic Insights - The grocery industry is experiencing increased competition, with a focus on natural and organic products, impacting the company's market position[97] - The company has identified opportunities for increased economies of scale in sourcing products, although fixed costs may limit cost leverage[99] - The balance of contract liabilities related to unredeemed gift cards was $1.8 million as of December 31, 2025, compared to $1.6 million as of September 30, 2025[44]

Core Insights - Natural Grocers is celebrating Iowa Statehood Day with a promotional event from February 8 to 10, offering a free reusable tote bag and a $5-off coupon for {N}power members [1][4][6] Company Overview - Natural Grocers, headquartered in Colorado, has been operating in Iowa since 2016, with six stores currently serving the northeastern part of the state [2][7] - The company emphasizes a commitment to quality, selling only USDA-certified organic produce and products that meet strict quality guidelines [7] Community Engagement - The event is a way for Natural Grocers to express gratitude to the Iowa community for their support since the company's first store opening in Clive [3][4] - The company employs over 125 crew members in Iowa and is dedicated to their well-being through various programs and benefits [4][7] Customer Rewards Program - The {N}power rewards program allows customers to earn points and receive exclusive discounts, with the current promotion available only to registered members [4][8] - Customers must sign up by February 5, 2026, to receive the promotional coupon via email or app [8][9]

Investor Presentation February 2026 Disclosures Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 in addition to historical information. All statements that are not statements of historical fact, including those that relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity ...

Core Insights - The 2025 Sustainability Report of Natural Grocers emphasizes the company's commitment to nutrition education, product standards, and ecological sustainability partnerships [1][2][3] Group 1: Nutrition Education - Natural Grocers has invested over $7 million in nutrition education services in fiscal year 2025, highlighting its belief in accessible, research-backed nutrition guidance for community wellbeing [6] - The company offers free one-on-one coaching, nutrition education classes, recipe demonstrations, and personalized shopping support through its in-store Nutritional Health Coaches [6] - The Nutrition Education program received the Sustainability in the Food Industry Award from The Shelby Report, showcasing its recognition in the industry [6] Group 2: Product Standards - Natural Grocers maintains some of the strictest product standards in the grocery industry, prohibiting synthetic colors and problematic ingredients [6] - The company exclusively sells USDA-certified organic produce and pasture-raised, non-confinement dairy products and free-range eggs, ensuring high-quality offerings [4] Group 3: Commitment to Sustainability - The company prioritizes partnerships with vendors and farming partners focused on soil health, biodiversity, and ecological stewardship, supporting regenerative agriculture [6] - Operational decisions across stores, facilities, and supply chains are grounded in sustainable practices, reinforcing the company's commitment to sustainability [6] Group 4: Community and Crew Support - Natural Grocers has invested over $16 million in incremental compensation and discretionary payments for its Crew in fiscal year 2025, demonstrating its commitment to employee development [4] - The company upholds its founding principles of community wellbeing and Crew development through education, benefits, and local engagement [6]

Core Insights - Natural Grocers is launching a new line of chocolate bars made with organic, non-GMO ingredients, reflecting the company's commitment to high-quality products [1][6] - The chocolate bars are crafted with Fairtrade certified Belgian chocolate and cocoa, promoting sustainable livelihoods for farmers and workers [2][6] - The new products are positioned as thoughtful gifts for Valentine's Day, encouraging pairing with other Natural Grocers products [4][6] Product Details - The new chocolate offerings include Organic Dark Chocolate Raspberry and Organic Dark Chocolate Caramel & Sea Salt, each priced at $4.99 for 3.17 oz [8] - The bars are packaged in recyclable paper sleeves, aligning with the company's sustainability goals [1][6] Company Overview - Natural Grocers by Vitamin Cottage, Inc. was founded in 1955 and operates 168 stores across 21 states, focusing on natural and organic groceries [6] - The company adheres to strict quality guidelines, ensuring products are free from artificial flavors, preservatives, and synthetic colors [6] - In fiscal year 2025, Natural Grocers invested over $16 million in employee compensation and discretionary payments, highlighting its commitment to its workforce [6]