Natural Grocers by Vitamin Cottage Announces Third Quarter Fiscal 2025 Results

Raises Fiscal 2025 Outlook

LAKEWOOD, Colo., Aug. 7, 2025 /PRNewswire/ — Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) today announced results for its third quarter of fiscal 2025 ended June 30, 2025.

Highlights for Third Quarter Fiscal 2025 Compared to Third Quarter Fiscal 2024

Net sales increased 6.3% to $328.7 million;
Daily average comparable store sales increased 7.4%, and 14.6% on a two-year basis;
Net income increased 26.0% to $11.6 million, with diluted earnings per share of $0.50; and
Adjusted EBITDA increased 10.1% to $24.4 million.

“Our third quarter performance exceeded our expectations and we again delivered outstanding results across all key metrics including daily average comparable sales growth of 7.4%. We believe that our value offering of high-quality, natural and organic products at Always AffordableSM prices resonates with consumers’ increasing prioritization of health and wellness, including food and nutrition,” said Kemper Isely, Co-President. “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. Based on the strong third quarter results, we are increasing our fiscal 2025 outlook for daily average comparable store sales growth and diluted earnings per share.”

Mr. Isely added, “In June, our primary distributor, United Natural Foods, Inc. (UNFI), experienced a cybersecurity incident that temporarily impacted UNFI’s ability to fulfill orders and distribute products to our stores. In the weeks following the incident, we collaborated with UNFI to minimize disruptions and restore normalized levels of product distribution to our stores. 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. As of the date of this release, our operations have substantially normalized, and we do not expect the disruption to materially impact our operations or financial performance in the future.”

In addition to presenting the financial results of Natural Grocers by Vitamin Cottage, Inc. and its subsidiaries (collectively, the Company) in conformity with U.S. generally accepted accounting principles (GAAP), the Company is also presenting EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. The reconciliation from GAAP to these non-GAAP financial measures is provided at the end of this earnings release.

Operating Results — Third Quarter Fiscal 2025 Compared to Third Quarter Fiscal 2024

Net sales during the third quarter of fiscal 2025 increased $19.6 million, or 6.3%, to $328.7 million, compared to the third quarter of fiscal 2024, due to a $19.0 million increase in comparable store sales and a $3.4 million increase in new store sales, partially offset by a $2.8 million decrease in net sales related to closed stores. The Company estimates that net sales for the third quarter of fiscal 2025 were adversely impacted by the UNFI cybersecurity incident by approximately $3.5 million to $4.0 million. Daily average comparable store sales increased 7.4% in the third quarter of fiscal 2025, comprised of a 4.8% increase in daily average transaction count and a 2.4% increase in daily average transaction size.

Gross profit during the third quarter of fiscal 2025 increased $7.9 million, or 8.8%, to $98.3 million. Gross profit reflects earnings after product and store occupancy costs. Gross margin increased by 70 basis points to 29.9% during the third quarter of fiscal 2025, compared to 29.2% in the third quarter of fiscal 2024. The increase in gross margin was driven by higher product margin primarily attributed to effective promotions.

Store expenses during the third quarter of fiscal 2025 increased 6.1% to $71.7 million, driven by higher compensation expenses. Store expenses as a percentage of net sales were 21.8% during the third quarter of fiscal 2025, down from 21.9% in the third quarter of fiscal 2024. The decrease in store expenses as a percentage of net sales reflects expense leverage.

Administrative expenses during the third quarter of fiscal 2025 increased 14.7% to $10.9 million, driven by higher technology expenses and compensation expenses. Administrative expenses as a percentage of net sales were 3.3% in the third quarter of fiscal 2025, up from 3.1% in the third quarter of fiscal 2024.

Operating income for the third quarter of fiscal 2025 increased 21.3% to $15.6 million. Operating margin during the third quarter of fiscal 2025 was 4.7%, up from 4.2% in the third quarter of fiscal 2024.

Net income for the third quarter of fiscal 2025 was $11.6 million, or $0.50 diluted earnings per share, compared to net income of $9.2 million, or $0.40 diluted earnings per share, for the third quarter of fiscal 2024.

Adjusted EBITDA for the third quarter of fiscal 2025 was $24.4 million, compared to $22.2 million in the third quarter of fiscal 2024.

Operating Results — First Nine Months Fiscal 2025 Compared to First Nine Months Fiscal 2024

Net sales during the first nine months of fiscal 2025 increased $75.8 million, or 8.2%, to $994.7 million, compared to the first nine months of fiscal 2024, due to a $72.8 million increase in comparable store sales and a $9.8 million increase in new store sales, partially offset by a $6.8 million decrease in sales related to closed stores. Daily average comparable store sales increased 8.4% in the first nine months of fiscal 2025, comprised of a 5.4% increase in daily average transaction count and a 2.9% increase in daily average transaction size.

Gross profit during the first nine months of fiscal 2025 increased $29.4 million, or 10.9%, to $298.9 million. Gross profit reflects earnings after product and store occupancy costs. Gross margin increased by 70 basis points to 30.0% during the first nine months of fiscal 2025, compared to 29.3% in the first nine months of fiscal 2024. The increase in gross margin was driven by higher product margin primarily attributed to effective promotions, and store occupancy cost leverage.

Store expenses during the first nine months of fiscal 2025 increased 6.4% to $218.0 million, primarily driven by higher compensation expenses. Store expenses as a percentage of net sales were 21.9% during the first nine months of fiscal 2025, down from 22.3% in the first nine months of fiscal 2024. The decrease in store expenses as a percentage of net sales reflects expense leverage.

Administrative expenses during the first nine months of fiscal 2025 increased 17.6% to $33.5 million, primarily driven by higher compensation expenses and technology expenses. Administrative expenses as a percentage of net sales were 3.4% during the first nine months of fiscal 2025, up from 3.1% in the first nine months of fiscal 2024.

Operating income for the first nine months of fiscal 2025 increased 33.2% to $46.5 million. Operating margin during the first nine months of fiscal 2025 was 4.7%, compared to 3.8% in the first nine months of fiscal 2024.

Net income for the first nine months of fiscal 2025 was $34.6 million, or $1.49 diluted earnings per share, compared to net income of $24.9 million, or $1.08 diluted earnings per share, for the first nine months of fiscal 2024.

Adjusted EBITDA for the first nine months of fiscal 2025 was $73.5 million, compared to $60.6 million in the first nine months of fiscal 2024.

Balance Sheet and Cash Flow

As of June 30, 2025, the Company had $13.2 million in cash and cash equivalents, and no outstanding borrowings on its $72.5 million revolving credit facility.

During the first nine months of fiscal 2025, the Company generated $39.7 million in cash from operations and invested $22.9 million in net capital expenditures, primarily for new and relocated/remodeled stores.

Dividend Announcement

Today, the Company announced the declaration of a quarterly cash dividend of $0.12 per common share. The dividend will be paid on September 17, 2025 to stockholders of record at the close of business on September 2, 2025.

Growth and Development

The Company ended the third quarter with 169 stores in 21 states. Since June 30, 2025, the Company has remodeled one store.

Outlook

The Company is raising its fiscal 2025 outlook for daily average comparable store sales growth and diluted earnings per share, and updating its outlook for the number of new stores and relocations/remodels, and capital expenditures. The Company is also introducing its new store growth expectations for fiscal 2026. The Company expects:

Fiscal 2025

Prior Outlook

Updated Outlook

Number of new stores

3 to 4

2

Number of relocations/remodels

2 to 4

3

Daily average comparable store sales growth

6.5% to 7.5%

7.25% to 7.75%

Diluted earnings per share

$1.78 to $1.86

$1.90 to $1.95

Capital expenditures (in millions)

$36 to $44

$30 to $33

                         Fiscal 2026                            

        Outlook          

Number of new stores

6 to 8

Earnings Conference Call

The Company will host a conference call today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time) to discuss this earnings release. The dial-in number is 1-888-347-6606 (US) or 1-412-902-4289 (International). The conference ID is “Natural Grocers Q3 FY 2025 Earnings Call.” A simultaneous audio webcast will be available at http://Investors.NaturalGrocers.com and archived for a minimum of 20 days.

About Natural Grocers by Vitamin Cottage

Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) is an expanding specialty retailer of natural and organic groceries, body care products and dietary supplements. The grocery products sold by Natural Grocers must meet strict quality guidelines and may not contain artificial flavors, preservatives, or sweeteners (as defined in its standards), synthetic colors, or partially hydrogenated or hydrogenated oils. The Company sells only USDA certified organic produce and exclusively pasture-raised, non-confinement dairy products, and free-range eggs. Natural Grocers’ flexible smaller-store format allows it to offer affordable prices in a shopper-friendly, clean and convenient retail environment. The Company also provides extensive free science-based nutrition education programs to help customers make informed health and nutrition choices. The Company, founded in 1955, has 169 stores in 21 states.

Visit www.NaturalGrocers.com for more information and store locations.

Forward-Looking Statements

The following constitutes a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, statements in this release are “forward-looking statements” and are based on management’s current expectations and are subject to uncertainty and changes in circumstances. All statements that are not statements of historical fact are forward-looking statements. Actual results could differ materially from these expectations due to changes in global, national, regional or local political, economic, inflationary, deflationary, recessionary, business, interest rate, labor market, competitive, market, regulatory, trade policy and other factors, and other risks detailed in the Company’s Annual Report on Form 10-K and the Company’s subsequent quarterly reports on Form 10-Q. The information contained herein speaks only as of the date of this release and the Company undertakes no obligation to publicly update forward-looking statements, except as may be required by the securities laws.

For further information regarding risks and uncertainties associated with the Company’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s filings with the Securities and Exchange Commission, including, but not limited to, the Form 10-K and the Company’s subsequent quarterly reports on Form 10-Q, copies of which may be obtained by contacting Investor Relations at 303-986-4600 or by visiting the Company’s website at http://Investors.NaturalGrocers.com.

Investor Contact:

Reed Anderson, ICR, 646-277-1260, [email protected]

 

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

Consolidated Statements of Income

(Unaudited)

(Dollars in thousands, except per share data)

Three months ended
June 30,

Nine months ended
June 30,

2025

2024

2025

2024

Net sales

$

328,705

309,082

994,695

918,924

Cost of goods sold and occupancy costs

230,426

218,751

695,844

649,476

Gross profit

98,279

90,331

298,851

269,448

Store expenses

71,719

67,575

218,000

204,791

Administrative expenses

10,949

9,545

33,486

28,474

Pre-opening expenses

24

364

877

1,272

Operating income

15,587

12,847

46,488

34,911

Interest expense, net

(694)

(1,052)

(2,367)

(3,123)

Income before income taxes

14,893

11,795

44,121

31,788

Provision for income taxes

(3,288)

(2,586)

(9,477)

(6,863)

Net income

$

11,605

9,209

34,644

24,925

Net income per share of common stock:

Basic

$

0.51

0.40

1.51

1.09

Diluted

$

0.50

0.40

1.49

1.08

Weighted average number of shares of common stock
     outstanding:

Basic

22,951,339

22,789,057

22,930,084

22,766,516

Diluted

23,311,935

23,115,356

23,247,316

23,052,044

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

 

Consolidated Balance Sheets 
(Unaudited)
(Dollars in thousands, except per share data)

June 30, 2025

September 30,
2024

Assets

Current assets:

Cash and cash equivalents 

$

13,178

8,871

Accounts receivable, net 

12,810

12,610

Merchandise inventory 

124,626

120,672

Prepaid expenses and other current assets

6,362

4,905

Total current assets 

156,976

147,058

Property and equipment, net 

181,037

178,609

Other assets:

Operating lease assets, net

263,928

275,111

Finance lease assets, net

40,643

40,752

Other assets

4,218

458

Goodwill and other intangible assets, net 

12,195

13,488

Total other assets 

320,984

329,809

Total assets 

$

658,997

655,476

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable 

$

82,455

88,397

Accrued expenses 

31,481

35,847

Operating lease obligations, current portion 

36,428

35,926

Finance lease obligations, current portion

4,128

3,960

Total current liabilities 

154,492

164,130

Long-term liabilities:

Operating lease obligations, net of current portion

250,724

263,404

Finance lease obligations, net of current portion

43,253

43,217

Deferred income tax liabilities, net 

8,027

10,471

Total long-term liabilities 

302,004

317,092

Total liabilities 

456,496

481,222

Stockholders’ equity:

Common stock, $0.001 par value, 50,000,000 shares authorized, 22,954,109 and
22,888,540 shares issued and outstanding at June 30, 2025 and September 30, 2024,
respectively

23

23

Additional paid-in capital 

62,185

60,327

Retained earnings 

140,293

113,904

Total stockholders’ equity 

202,501

174,254

Total liabilities and stockholders’ equity 

$

658,997

655,476

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

 

Consolidated Statements of Cash Flows 
(Unaudited)
(Dollars in thousands)

Nine months ended June 30,

2025

2024

Operating activities:

Net income 

$

34,644

24,925

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 

23,791

22,998

Loss on impairment of long-lived assets and store closing costs

81

390

(Gain) loss on disposal of property and equipment 

(30)

10

Share-based compensation 

3,100

1,900

Deferred income tax benefit

(2,444)

(2,519)

Non-cash interest expense 

3

14

Other 

3

(160)

Changes in operating assets and liabilities:

(Increase) decrease in:

Accounts receivable, net 

(1,055)

1,318

Merchandise inventory 

(3,954)

1,923

Prepaid expenses and other assets 

(5,232)

(1,009)

Income tax receivable 

252

Operating lease assets 

25,221

25,005

(Decrease) increase in:

Operating lease liabilities

(25,565)

(25,386)

Accounts payable 

(4,520)

2,023

Accrued expenses 

(4,366)

(2,404)

Net cash provided by operating activities 

39,677

49,280

Investing activities:

Acquisition of property and equipment  

(23,124)

(31,016)

Acquisition of other intangibles

(167)

(839)

Proceeds from sale of property and equipment 

44

3

Proceeds from property insurance settlements

305

44

Net cash used in investing activities 

(22,942)

(31,808)

Financing activities:

Borrowings under revolving loans

486,200

455,300

Repayments under revolving loans

(486,200)

(438,700)

Repayments under term loan

(6,000)

Finance lease obligation payments 

(2,931)

(2,653)

Dividends to shareholders 

(8,255)

(29,585)

Payments of deferred financing costs 

(18)

Payments on withholding tax for restricted stock unit vesting

(1,242)

(243)

Net cash used in financing activities 

(12,428)

(21,899)

Net increase (decrease) in cash and cash equivalents 

4,307

(4,427)

Cash and cash equivalents, beginning of period 

8,871

18,342

Cash and cash equivalents, end of period 

$

13,178

13,915

Supplemental disclosures of cash flow information:

Cash paid for interest 

$

959

1,630

Cash paid for interest on finance lease obligations, net of capitalized interest of
   $164 and $302, respectively 

1,441

1,422

Income taxes paid 

11,644

8,264

Supplemental disclosures of non-cash investing and financing activities:

Acquisition of property and equipment not yet paid 

$

2,157

2,578

Acquisition of other intangibles not yet paid 

51

Lease assets obtained in exchange for new operating lease obligations

14,022

13,073

Lease assets obtained in exchange for new finance lease obligations

3,135

(45)

                                                                                   NATURAL GROCERS BY VITAMIN COTTAGE, INC.

                                                                                   Non-GAAP Financial Measures

                                                                                   (Unaudited)

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP. We define EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA as adjusted to exclude the effects of certain income and expense items that management believes make it more difficult to assess the Company’s actual operating performance, including certain items such as impairment charges, store closing costs, share-based compensation, amortization of software hosting arrangement (SaaS) implementation costs and non-recurring items.

The following table reconciles net income to EBITDA and Adjusted EBITDA, dollars in thousands:

Three months ended
June 30,

Nine months ended
June 30,

2025

2024

2025

2024

Net income

$

11,605

9,209

34,644

24,925

Interest expense, net

694

1,052

2,367

3,123

Provision for income taxes

3,288

2,586

9,477

6,863

Depreciation and amortization

7,953

7,845

23,791

22,998

EBITDA

23,540

20,692

70,279

57,909

Impairment of long-lived assets and store
     closing costs

402

118

826

Share-based compensation

843

1,062

3,100

1,900

Amortization of SaaS implementation costs

2

3

Adjusted EBITDA

$

24,385

22,156

73,500

60,635

EBITDA increased 13.8% to $23.5 million for the three months ended June 30, 2025 compared to $20.7 million for the three months ended June 30, 2024. EBITDA increased 21.4% to $70.3 million for the nine months ended June 30, 2025 compared to $57.9 million for the nine months ended June 30, 2024. EBITDA as a percentage of net sales was 7.2% and 6.7% for the three months ended June 30, 2025 and 2024, respectively. EBITDA as a percentage of net sales was 7.1% and 6.3% for the nine months ended June 30, 2025 and 2024, respectively.

Adjusted EBITDA increased 10.1% to $24.4 million for the three months ended June 30, 2025 compared to $22.2 million for the three months ended June 30, 2024. Adjusted EBITDA increased 21.2% to $73.5 million for the nine months ended June 30, 2025 compared to $60.6 million for the nine months ended June 30, 2024. Adjusted EBITDA as a percentage of net sales was 7.4% and 7.2% for the three months ended June 30, 2025 and 2024, respectively. Adjusted EBITDA as a percentage of net sales was 7.4% and 6.6% for the nine months ended June 30, 2025 and 2024, respectively.

Management believes some investors’ understanding of our performance is enhanced by including EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. We believe EBITDA and Adjusted EBITDA provide additional information about: (i) our operating performance, because they assist us in comparing the operating performance of our stores on a consistent basis, as they remove the impact of non-cash depreciation and amortization expense as well as items not directly resulting from our core operations, such as interest expense and income taxes and (ii) our performance and the effectiveness of our operational strategies. Additionally, EBITDA is a component of a measure in our financial covenants under our credit facility.

Furthermore, management believes some investors use EBITDA and Adjusted EBITDA as supplemental measures to evaluate the overall operating performance of companies in our industry. Management believes that some investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. By providing these non-GAAP financial measures, together with a reconciliation from net income, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.

Our competitors may define EBITDA and Adjusted EBITDA differently, and as a result, our measures of EBITDA and Adjusted EBITDA may not be directly comparable to EBITDA and Adjusted EBITDA of other companies. Items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing financial performance. EBITDA and Adjusted EBITDA are supplemental measures of operating performance that do not represent and should not be considered in isolation or as an alternative to, or substitute for, net income or other financial statement data presented in the consolidated financial statements as indicators of financial performance. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of the limitations are:

EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
EBITDA and Adjusted EBITDA do not reflect any depreciation or interest expense for leases classified as finance leases; 
EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
Adjusted EBITDA does not reflect share-based compensation, impairment of long-lived assets, store closing costs and amortization of SaaS implementation costs;
EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes; and
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements.

Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA as supplemental information.

SOURCE Natural Grocers by Vitamin Cottage, Inc.


Go to Source