On November 21, 2024, Natural Grocers by Vitamin Cottage Inc (NGVC, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full fiscal year ended September 30, 2024. The company, known for its natural and organic grocery and dietary supplement stores, reported significant growth in sales and earnings, alongside a notable increase in its quarterly cash dividend.
Company Overview
Natural Grocers by Vitamin Cottage Inc operates a chain of stores offering natural and organic food, dietary supplements, natural body care, household, and pet care products. The majority of its revenue is derived from grocery products and dietary supplements.
Fourth Quarter and Fiscal Year Highlights
For the fourth quarter of fiscal 2024, Natural Grocers reported a 9.3% increase in net sales to $322.7 million compared to the same period in the previous year. The company's net income surged by 53.2% to $9.0 million, translating to a diluted earnings per share (EPS) of $0.39. Adjusted EBITDA also saw a significant rise, reaching $22.6 million.
On an annual basis, fiscal 2024 net sales grew by 8.9% to $1.24 billion. The company achieved a net income of $33.9 million, or $1.47 diluted EPS, marking a substantial improvement from fiscal 2023. Adjusted EBITDA for the year was $83.3 million, reflecting a 31.4% increase.
Financial Achievements and Industry Impact
The company's financial achievements underscore its robust position in the Retail - Defensive sector. The increase in net sales and earnings highlights the effectiveness of its business model, which focuses on high-quality, affordable products that cater to health-conscious consumers. The 20% increase in the quarterly cash dividend to $0.12 per share further demonstrates the company's commitment to returning value to shareholders.
Detailed Financial Analysis
Natural Grocers' gross profit for the fourth quarter rose by 13.1% to $95.4 million, with a gross margin improvement of 100 basis points to 29.6%. This was attributed to store occupancy cost leverage and higher product margins. Store expenses increased by 10.2% to $72.6 million, primarily due to higher compensation expenses and asset impairment charges.
For fiscal 2024, the company reported a gross profit increase of 11.6% to $364.8 million, with a gross margin of 29.4%. Operating income rose by 48.3% to $47.0 million, with an operating margin of 3.8%.
Balance Sheet and Cash Flow
As of September 30, 2024, Natural Grocers had $8.9 million in cash and cash equivalents, with no outstanding debt on its $75.0 million revolving credit facility. The company generated $73.8 million in cash from operations and invested $38.6 million in capital expenditures, primarily for new and remodeled stores.
Growth and Development
During the fourth quarter, Natural Grocers opened one new store, bringing the total to 169 stores across 21 states. The company opened four new stores throughout fiscal 2024, reflecting its ongoing expansion strategy.
“Our outstanding fourth quarter and fiscal year results underscore our customers’ appreciation for our commitment to the exceptional quality, value and convenience provided by our innovative business model,” said Kemper Isely, Co-President.
Conclusion
Natural Grocers by Vitamin Cottage Inc's fiscal 2024 results highlight its strong financial performance and strategic growth initiatives. The company's ability to increase sales and profitability while expanding its store footprint positions it well for continued success in the competitive natural and organic retail market.
Explore the complete 8-K earnings release (here) from Natural Grocers by Vitamin Cottage Inc for further details.
