Same-store sales at Natural Grocers by Vitamin Cottage increased 5.5 percent and net sales rose 9.4 percent from Q1 2018 to $221.5 million, the company announced Thursday.
"We are pleased to report a strong start to fiscal 2019, delivering continued comparable store sales growth along with an improved gross margin and operating margin during the first quarter," Kemper Isely, co-president, said in a released statement. During Thursday’s earnings call, he noted that this is the seventh-consecutive quarter of increased sales.
The comparable sales increase came from a 2.3 percent increase in transactions and a 3.2 percent increase in the average transaction. Sales in mature stores—those that opened in fiscal 2014 or before—increased 3.6 percent from Q1 2018.
Gross profit was $59.1 million, up 11.3 percent over the same period a year ago. Gross margin was 26.7 percent of sales, slightly higher than the 26.3 percent reported for Q1 2018.
Although operating income rose 84 percent to $4 million and the operating margin increase 70 basis points or 0.7 percent, net income decreased 57.6 percent from the first quarter of 2018 to $2.2 million. The decline is due to a tax change in the first quarter of 2018 that generated $4.3 million.
The first quarter of fiscal 2019 ended Dec. 31.
“We remain focused on driving sales growth through a balance of new store growth and comparable store sales growth, while remaining committed to our cost-control initiatives to deliver improved earnings performance,” Isely said in the statement.
Todd Dissinger, chief financial officer, said the company saw an increase of $130,000 in pre-opening expenses, as it opened four stores and relocated one during the first quarter of 2019. During the first quarter of 2018, the company opened two stores.
The company also closed one store in Q1 2019, giving it 151 stores in 19 states at the end of the quarter.
So far in the second quarter, Natural Grocers has opened one store and relocated another. It has signed leases for two new stores in North Dakota and Oregon. During this fiscal year, the company plans to open between seven and nine stores, and move five or six others, Isely said during the call.