A competitive food retailing environment and political uncertainty challenged Natural Grocers by Vitamin Cottage in the second quarter of its 2017 fiscal year ended March 30, Co-president Kemper Isely said during earnings comments made Thursday.
The second-quarter results included:
- Net sales growth of 8.3 percent to $192.2 million in the second quarter, and an increase of 8.9 percent to $375.8 million for the first half of fiscal 2017.
- Daily average comparable store sales decreased 1.7 percent in the second quarter and decreased 1.2 percent in the first half.
- Net income was $3 million, with diluted earnings per share of 13 cents for the quarter and $5.1 million and 23 cents respectively for the first half.
- EBITDA was $12.8 million in the second quarter and $24.1 million for the first half of fiscal 2017.
- Opened nine new stores in the first half of fiscal 2017, compared to nine new stores in the first half of fiscal 2016, resulting in growth rates of 20.5 percent and 17.9 percent for the 12-month periods ended March 31, 2017, and 2016, respectively.
Meanwhile, the company announced narrowed fiscal 2017 outlook, particularly reducing the range of expected new store openings to 15 to 17 new stores, from the previous forecast of 15 to 20. Daily average comparable store growth now is expected to range from -1 percent to 1 percent.
Isely admitted the company did not meet expectations but said he is pleased with cost improvements. Labor, shrink and administrative cost-control initiatives continue and have shown results, he said.
Meanwhile, market efforts launched in March are driving store traffic. The Here or Here campaign will be expanded to additional markets and run through June in conjunction with expanded radio and outdoor advertising.
Improvements into the third-quarter are encouraging, Isely said, especially after the quarter started in January with significant decreases in traffic count and a decline in average basket size. April is performing significantly better, bringing the year-to-date within the revised guidance range.