Natural Grocers by Vitamin Cottage Inc. on Thursday announced Q3 net sales increased 9.5 percent over 2017, with same-store sales rising 5.2 percent in the same period. The company, as a result, is raising its outlook for this fiscal year.
Net sales reached $213.1 million for the quarter, up $18.4 million over the same period in 2017, driven by a 4 percent increase in store traffic and 1.1 percent growth in basket size, said Todd Dissinger, Natural Grocer’s chief financial officer.
Store traffic increased 4 percent and the average transaction grew 1.1 percent in the third quarter compared to 2017. Some expenses, such as marketing and depreciation, were down, while labor costs were about even.
Natural Grocers opened two new stores and moved one store in the third quarter, and it plans to open eight or nine more before the end of the year, Kemper Isely, co-president, said during Thursday’s earnings call.
“We have worked hard to improve both sales trends and profit margins, and our performance reflects those efforts. The third quarter marks our fifth consecutive quarter of positive daily average comparable store sales,” Isely said. “We firmly believe that our sales momentum is being driven by the success of our marketing, promotional efforts and price investments, coupled with our unwavering focus on our core values. We believe it is our core values that resonate most with our customers and differentiate us from our competition.”
Net income for the quarter increased 233 percent to $2 million; for the year, it has risen 86 percent to $10.6 million.
The company is raising its fiscal 2018 outlook for comparable-stores sales growth to 4.5-5.5 percent and raising the low end of its fiscal 2018 diluted earnings per share outlook to 48-50 cents.
Earnings for the third quarter were 9 cents, up from 3 cents in the third quarter of 2017; for the year so far, diluted earnings per share are 47 cents per share compared to 25 cents per share at the end of the third quarter in 2017.
For the year to date, Natural Grocers by Vitamin Cottage reported similarly positive results:
- Net sales increased 10.7 percent or $61 million to $631.5 million from $570.5 million in the first three quarters of 2017.
- Same-store sales grew 5.7 percent compared with a 0.7 percent decrease in the first nine months of 2017.
- Store traffic increased 4.6 percent and the average transaction grew 1 percent compared to 2017.
- Diluted earnings per share are 47 cents, an increase from 25 cents in the same period in 2017.
- Gross profit grew 5.8 percent to $168.3 million.
- Gross margin dropped to 26.6 percent of sales, down from 27.9 percent in the same time period 2017.