Natural Grocers Reports 9% Revenue Growth and 64% Net Income Increase in Q2 FY 2025

Natural Grocers by Vitamin Cottage, Inc. reported a notable increase in financial performance for the second quarter of fiscal year 2025, ending March 31, 2025. The company achieved net sales of $335.8 million, reflecting a 9.0% increase from $308.1 million in the same quarter of the previous year. For the six-month period, net sales reached $666.0 million, up 9.2% from $609.8 million. The company's net income also saw significant growth, rising 64.6% to $13.1 million for the quarter, compared to $7.9 million in the prior year, and increasing 46.6% to $23.0 million for the six months.

The financial results indicate a strong operational performance, with daily average comparable store sales increasing by 8.9% for both the three and six months ended March 31, 2025. This growth was driven by a combination of a 5.9% increase in daily average transaction count and a 2.8% rise in average transaction size. The gross profit margin improved to 30.3% for the quarter, up from 29.3% a year earlier, attributed to effective promotions and better product margins.

In terms of strategic developments, Natural Grocers operated 169 stores across 21 states as of March 31, 2025, maintaining its store count from the previous year. The company opened two new stores and relocated/remodeled two existing stores during the six-month period, while also closing two stores. The company plans to continue its expansion strategy, with expectations to open three to four new stores and relocate/remodel two to four existing stores in fiscal year 2025.

Operationally, the company reported a decrease in store expenses as a percentage of net sales, from 22.5% to 21.7%, indicating improved expense management. Administrative expenses increased by 15.8% to $11.0 million, primarily due to higher compensation and technology costs. The company’s liquidity position remained strong, with cash and cash equivalents totaling $21.2 million and $70.3 million available for borrowing under its credit facility as of March 31, 2025.

Looking ahead, Natural Grocers anticipates continued growth driven by a loyal customer base and increasing consumer interest in health and nutrition. However, the company acknowledges potential challenges from competitive pressures and economic conditions, including inflation and labor market dynamics. The management remains optimistic about leveraging cost efficiencies and expanding its market presence while navigating these external factors.