Last updated on November 19th, 2018
Natural Grocers by Vitamin Cottage Inc. has released the results of its fourth quarter and fiscal year ended Sept. 30, 2018.
Highlights for fourth quarter and fiscal 2018 compared to fourth quarter and fiscal 2017 include:
- Net sales increased 9.6 percent to $217.5 million in the fourth quarter and increased 10.4 percent to $849.0 million in fiscal 2018.
- Daily average comparable store sales increased 6.3 percent in the fourth quarter and increased 5.8 percent in fiscal 2018.
- Net income increased 68.7 percent to $2.1 million with diluted earnings per share of $0.09 in the fourth quarter and was $12.7 million with diluted earnings per share of $0.56 in fiscal 2018.
- Adjusted EBITDA, which excludes the effect of long-lived asset impairment charges and store closure costs, increased 9.8 percent to $11.3 million in the fourth quarter and was $45.1 million in fiscal 2018.
- Natural Grocers opened one new store and relocated one store in the fourth quarter, resulting in a 5.7 percent new store growth rate for the twelve-month period ended Sept. 30, 2018.
“We continued to generate strong sales momentum during the fourth quarter while leveraging store expenses and delivering earnings per share growth,” said Kemper Isely, co-president. “We are pleased with the improvements we achieved during fiscal 2018, including accelerating comparable store sales growth, moderating the impact of our pricing and promotional investments on gross margin and controlling expenses to deliver improved earnings growth. By leveraging our new store growth and operating strategies, we believe we are well positioned to continue to drive sales growth and improved profit performance in fiscal 2019.”
Fourth quarter operating results
During the fourth quarter of fiscal 2018, net sales increased $19.0 million, or 9.6 percent, to $217.5 million compared to the same period in fiscal 2017, primarily driven by a $12.6 million increase in comparable store sales and a $6.4 million increase in new store sales. Daily average comparable store sales increased 6.3 percent in the fourth quarter of fiscal 2018 compared to a 2.1 percent increase in the fourth quarter of fiscal 2017. The daily average comparable store sales increase during the fourth quarter of fiscal 2018 reflected a 3.8 percent increase in daily average transaction count and a 2.5 percent increase in average transaction size. Daily average mature store sales increased 3.9 percent in the fourth quarter of fiscal 2018 compared to a 0.2 percent decrease in the fourth quarter of fiscal 2017. For fiscal 2018, mature stores include all stores open during or before fiscal 2013.
Gross profit during the fourth quarter of fiscal 2018 increased 7.6 percent over the same period in fiscal 2017 to $57.3 million. Gross profit reflects earnings after both product and occupancy costs. Gross margin was 26.3 percent of sales for the fourth quarter of fiscal 2018 compared to 26.8 percent of sales for the fourth quarter of fiscal 2017. The decline in gross margin was driven by lower product margin, reflecting Natural Grocers’ promotional pricing campaigns and a shift in sales mix to lower margin products.
Net income for the fourth quarter of fiscal 2018 increased 68.7 percent over the same period in fiscal 2017 to $2.1 million with diluted earnings per share of $0.09.
Fiscal year 2018 operating results
During fiscal 2018, net sales increased $80 million, or 10.4 percent, compared to fiscal 2017 to $849.0 million due to a $44.7 million increase in comparable store sales and a $35.4 million increase in sales from new stores. Daily average comparable store sales increased by 5.8 percent during fiscal 2018 compared to a 0.1 percent increase in fiscal 2017. The 5.8 percent increase in fiscal 2018 was driven by a 4.4 percent increase in daily average transaction count and a 1.4 percent increase in average transaction size. Daily average mature store sales increased 3 percent in fiscal 2018 compared to a 1.6 percent decrease in fiscal 2017.
Gross profit during fiscal 2018 increased 6.2 percent compared to fiscal 2017 to $225.6 million. Gross profit reflects earnings after both product and occupancy costs. Gross margin was 26.6 percent of sales during fiscal 2018 compared to 27.6 percent of sales in fiscal 2017. The decline in gross margin was primarily driven by lower product margin, reflecting the Natural Grocers’ promotional pricing campaigns and a shift in sales mix to lower margin products, and a slight increase in occupancy expense as a percentage of sales.
Net income was $12.7 million with diluted earnings per share of $0.56 in fiscal 2018.
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