Natural Grocers by Vitamin Cottage plans to keep an aggressive pace of growth in fiscal 2016 with the opening of 23 new stores and the expansion of online offerings and private label selections.
“As we move into fiscal 2016, we expect to open 23 new stores, resulting in a unit growth of 22.3 percent, and to relocate four existing stores,” Co-president Kemper Isely stated in the press release reporting the company’s fourth-quarter and full-year results. “We believe we have a strong foundation of staffing and systems to support our disciplined growth.”
Natural Grocers by Vitamin Cottage started fiscal 2016 in October and already has opened three stores—in Bountiful, Utah; Salt Lake City; and Conifer, Colorado—and has 17 signed leases for stores planned to open in fiscal 2016 and 2017 in Arizona, Arkansas, Colorado, Iowa, Oregon, Texas, Utah and Washington. Four relocations and two remodels are also on tap.
Two key successes this year will be expanded in 2016, Isely said Nov. 19 during the fourth-quarter earnings call.
Online delivery this year more than doubled, spurring the company to seek additional markets in which to grow delivery and review online offerings such as click and collect. Instacart delivery serves Portland, Denver and Boulder, Colorado, now. Texas and Kansas markets could come online next.
Meanwhile, Natural Grocers focused on “premium” private label offerings such as eggs and a line of wild and sustainably caught canned seafood. To push faster on this front, the company plans to contract with a third party in the second quarter “to aggressively address rolling out more private label items,” Isely said.
Fourth-quarter and year-end highlights reported in a press release include:
- Net sales increased 19.7 percent to $162.4 million in the fourth quarter and increased 20 percent to $624.7 million in the fiscal year.
- Gross profit during the fourth quarter of fiscal 2015 increased 20.7 percent over the same period in fiscal 2014 to $46.8 million.
- Daily average comparable store sales increased 6.2 percent in the fourth quarter and increased 5.9 percent in the fiscal year.
- Net income decreased 9.3 percent to $2.9 million with diluted earnings per share of $0.13 in the fourth quarter and increased 20.3 percent to $16.2 million with diluted earnings per share of $0.72 in the fiscal year.
- Gross margin was 28.8 percent during the fourth quarter of fiscal 2015, compared to 28.6 percent in the fourth quarter of fiscal 2014. Gross margin was positively impacted by an increase in product margin, partially offset by an increase in occupancy costs, both as a percentage of sales.
- EBITDA increased 10.7 percent to $11.4 million in the fourth quarter and increased 20.5 percent to $50 million in the fiscal year.
- The company’s five-year annual unit growth rate of approximately 20 percent continued with 16 new stores in fiscal 2015, compared to 15 new stores in fiscal 2014, resulting in unit growth rates of 18.4 percent and 20.8 percent, respectively.
This year’s comparable store growth of 6.2 percent compares with a 3.7 percent increase in the fourth quarter of fiscal 2014 and was driven by a 4.5 percent increase in daily average transaction count and a 1.6 percent increase in average transaction size, according to the Natural Grocers by Vitamin Cottage release. Daily average mature store (those open during or before 2010) sales increased 2.7 percent. The company predicts 5 percent to 7 percent comparable store growth in fiscal 2016, with early first quarter prediction that the average will be on the low end or slightly below this range.