NGVC - NYSE

Natural Grocers by Vitamin Cottage, Inc.

NGVC·NYSE

$28.61

-1.7%

Consumer DefensiveGrocery Stores

Natural Grocers by Vitamin Cottage, Inc., together with its subsidiaries, retails natural and organic groceries, and dietary supplements in the United States. The company's stores offer natural and organic grocery products, such as organic produce; bulk food products; private label products comprising pasta, pasta sauce, ketchup, canned beans and vegetables, frozen vegetables, frozen fruits, frozen meals, frozen pizza, bread, baking mixes, plant based butter, olive and coconut oil, coconut milk, honey, maple syrup, preserves, chocolate, coffee, bacon, beef jerky, canned seafood, popcorn, tortilla chips, taco shells, eggs, cheese, apple sauce, apple cider vinegar, spring water, paper products, cleaning products, and other products; dry, frozen, and canned groceries; meat and seafood products; dairy products, dairy substitutes, and eggs; prepared foods; bread and baked products; beverages; and beer, wine, and hard cider products. Its stores also provide private label dietary supplements; body care products consisting of cosmetics, skin care, hair care, fragrance, and personal care products containing natural and organic ingredients; pet care and food products; books and handouts; and household and general merchandise, including cleaning supplies, paper products, and dish and laundry soaps, as well as other common household products, such as diapers. The company operates its retail stores under the Natural Grocers by Vitamin Cottage trademark. As of February 1, 2022, it operated 162 stores in 20 states. The company also offers science-based nutrition education programs to help customers make informed health and nutrition choices. Natural Grocers by Vitamin Cottage, Inc. was founded in 1955 and is headquartered in Lakewood, Colorado.

Statements Value Model

At a Glance

Live Snapshot

Market Cap$659.20M

EPS2.0200

P/E Ratio14.16

Earnings Date08/06/2026

Earnings Call Transcript

NGVC • 2026 • Q2

Operator

Good day, ladies and gentlemen. Welcome to the Natural Grocers Second Quarter Fiscal Year 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer section, and instruction will be given at that time. As a reminder, today's call is being recorded. I would now like to turn the conference over to Ms. Jessica Thiessen, Vice President, Treasurer for Natural Grocers. Ms. Thiessen, you may begin.

Jessica Thiessen

Good afternoon, thank you for joining us for the Natural Grocers by Vitamin Cottage second quarter fiscal year 2026 earnings conference call. On the call with me today are Kemper Isely, Co-President, and Richard Hallé, Chief Financial Officer. As a reminder, certain information provided during this conference call, including the company's outlook for fiscal 2026, contains forward-looking statements based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from those described in the forward-looking statements due to a variety of factors, including the risks and uncertainties detailed in the company's most recently filed Forms 10-Q and 10-K. The company undertakes no obligation to update forward-looking statements. Our remarks today include references to adjusted EBITDA, which is a non-GAAP measure. Please see our earnings release for a reconciliation of adjusted EBITDA to net income.

Jessica Thiessen

Today's earnings release will be available on the company's website, and a recording of this call will be available on the website at investors.naturalgrocers.com. Now, I will turn the call over to Kemper.

Kemper Isely

Thank you, Jessica, and good afternoon, everyone. During today's call, I will provide an overview of our financial results and highlight progress on initiatives driving long-term value creation. Rich will discuss the second quarter results in greater detail and review our fiscal year guidance. We performed well in a challenging environment driven by strong store-level execution and disciplined expense management, delivering diluted earnings per share growth of 3.6%. There are a few underlying trends I want to highlight. In the second quarter, comparable store sales increased 0.5% while cycling an 8.9% comp last year. On a two-year basis, comps of 9.4% continue to demonstrate solid growth relative to the broader grocery retail industry. We believe the second quarter sales trends reflected continued economic uncertainty and value-seeking consumer spending behaviors observed broadly across the grocery retail sector.

Kemper Isely

Furthermore, in the second quarter, we continued to see strong membership gains in our {N}power Rewards program. Net sales penetration increased 3 percentage points to 84%, highlighting our customers appreciation for the program's value and benefits. {N}power remains an effective tool for optimizing promotional activity and strengthening customer engagement. Natural Grocers is the value option in natural and organic grocery retail. Our marketing and communications continue to feature our always affordable prices, including the Even More Affordable campaign, which highlights a rotating assortment of staples, including our Natural Grocers brand products. We believe the consumer prioritization of health and wellness, including food and nutrition, is growing and enduring. Our differentiated natural and organic offering, supported by rigorous standards and our always affordable pricing strategy, continues to deliver strong value and reinforce our competitive positioning. Next, I will highlight an important milestone which is consistent with management's long-term focus.

Kemper Isely

During the second quarter, we successfully completed a major upgrade to our enterprise resource planning system. The ERP platform supports the majority of our functional areas, making this the most comprehensive systems implementation the company has undertaken to date. The successful execution reflects the dedication and cross-functional collaboration of our teams. The upgraded system enhances operational efficiency, improves data visibility, and provides a scalable foundation to support future growth and expand functionality, including data analytics and operational efficiencies, leveraging business intelligence tools. We've also made progress on store development as another lever driving our long-term value. During the second quarter, we opened one new store, and subsequent to the quarter, we relocated one store and opened an additional store. We're encouraged by the productivity of our new stores and relocations. We are on track to open six to eight new stores in fiscal 2026.

Operator

Thank you. We will now begin the question and answer session. The first question comes from Aaron Grey with Alliance Global Partners.

Aaron Grey

Hi, good evening, and thank you very much for the questions here. The first question I wanna ask about is the margin profile, which was good for you guys this quarter. I wanna think about how that is going forward, particularly given utilizing the ERP to drive some cost savings. You know, you seem to have had, you know, one of the higher gross margins in a couple years. As we think about efficiencies going forward, do you reinvest those back into the business, given the softer consumer environment, let that drop to the bottom line? Just how we think about the profit versus sales growth as we reinvest potentially those cost savings. Thanks.

Kemper Isely

I would say that the cost savings immediately from our investment in ERP are going to be minimal. It'll take a little while to get efficiencies from the new system and to work out bugs in the new system. Any cost savings that we do see, we usually reinvest in competitive pricing. You know, we look at every item that we sell and compare it to our competitors and decide where we should be in pricing, and we like to be on the leading edge of affordable pricing.

Aaron Grey

Appreciate that commentary. Second question for me, as we think about the comps, I know a lot of the commentary in terms of the trends has been based off, you know, the two-year stack and some of the softer comps you're gonna see in the back half of the year. You know, maybe outside of just thinking of a two-year stack, you know, anything that you're seeing to get more comfortability in terms of that stack starting to improve in the back half of the year as you know, as you go into fiscal year 2027?

Kemper Isely

Yeah. I mean, the, the first two quarters of this year were particularly difficult to comp well against last year because they were we had such strong comps last year. Starting in June of this year, our comps were substantially softer for the last four-months of the year of our fiscal year. We're pretty confident that we will see sales similar to what we have been seeing currently through those months, which gives us confidence that we will have substantially better comps from June through September of this year.

Aaron Grey

Okay, great. Thanks for the color. I'll go and jump back in the queue.

Operator

Thank you. The next question comes from Chuck Cerankosky with Northcoast Research.

Chuck Cerankosky

Good afternoon, everyone. I was wondering how you would describe the consumer behavior in the most recently reported quarter to what you saw a year earlier, how things have changed since war in Iraq broke out and how it's been trending since then?

Kemper Isely

March was a particularly difficult month. I think that the conflict in Iran was not helpful to the consumer sentiment in March. April was much better than March. I think as we get further away from the conflict, the consumer sentiment will improve. As compared to last year, definitely there was more robust consumer enthusiasm last year at this time.

Chuck Cerankosky

How did that, call it consumer distress, manifest itself? Was it, fewer items, fewer trips, more price sensitivity? Any insight on that?

Chuck Cerankosky

Great. Thank you.

Kemper Isely

Just to add on, as we're starting a program where we're working on really getting the penetration of our {N}power sales higher and also the number of customers the 30% of customers that aren't currently {N}power members enrolled in {N}power. I think we'll have some really good results towards our goals in regards to that issue starting in June.

Chuck Cerankosky

Thanks.

Operator

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Kemper Isely for any closing remarks.

Kemper Isely

Thank you for joining us. We are committed to maximizing value for our stockholders. We believe that our offering of high quality, natural and organic products supported by rigorous product standard and always affordable prices is differentiated and will support growing consumer demand over the long term. Continued investment in store development, people, processes, and system supports, operational discipline, and long-term value creation. Thank you and have a great day. Goodbye.

Transcript from May 7, 2026