Natural Grocers by Vitamin Cottage (NGVC) 8 Aug 242024 Q3 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the Natural Grocers Third Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded. [Operator Instructions] I'd now like to turn the conference over to Ms. Jessica Thiessen, Vice President, Treasurer for Natural Grocers. Ms. begin. may you Thiessen,

thank Vitamin joining Year Cottage Conference and Natural XXXX for Grocers Call. by Third you afternoon, us for the Earnings Good Quarter Fiscal

Todd are call Isely, me the Financial today On Co-President; with and Dissinger, Chief Officer. Kemper

available a during uncertainties. information statements risks current differ and of described available filed from investors.naturalgrocers.com. Actual forward-looking company variety obligation uncertainties website, assumptions call detailed company's on results As and is most be call recording subject are in update on conference statements those the on in provided could undertakes reminder, the Forms the recently the contains a this website statements. the due including to release this a and XX-K. The at to expectations XX-Q and press certain company's forward-looking Today's based risks to forward-looking and of factors, no will and materially

over turn to the I Now call will Kemper.

and afternoon, provide highlight you, an Thank and detail guidance. will I priorities. including quarter update performance updated financial discuss will third on our our in year Then fiscal good drivers our and greater results results, XXXX Todd Jessica, key of the everyone. review Today,

carefully pleased quarter sales, appreciate earnings our very financial are than the offering and prices. understand at believe value high-quality more including vetted ever, always expansion per of organic operating products that and compelling our comprised growth. We third We for share and results margin natural with a of affordable record year-to-date, diluted and our proposition customers,

instrumental and key several the position establishing over strong We initiatives customer that emphasize marketplace in communicating engagement. quarters. sales our in these past marketing performance drive unique to generating the consistently Our has been characteristics our believe

consecutive count sales third consecutive growth. in realized was a sales store daily fourth we second and quarter the This represents growth increase quarter, growth X.X% quarter transaction X%. in a quarter store count excess Furthermore, with X.X% third of the in of increase size. a comparable of the transaction X.X% comprised our comparable average In items

initiatives expenses coupled elevated sales managing trends, Our to focus including a productivity on per trends our again in margin operational point us improvement share. enabled operating and to These per execution basis us in confidence effectively outlook store diluted strong increase fiscal and increase year results, a share. XX% once diluted sales with earnings resulting XXX prompted our earnings business in for in the comparable and execution, leverage and XXXX our

customer loyal with Natural Grocers resilient and to continues resonate base. a

and relatively focus online prefer are strongly customers option, prioritizes shopping demographic on and Our diverse that believe higher to which experience to delivery. younger in-store a our a range sustainability. a an from healthy health customers household income lifespan primarily our who with older We is and our demographic

in of our XX% sales Approximately store. occur

and to convenient customer shop, customer easy service. experience Our and offers is in-store knowledgeable friendly clean

Our online in-store now online been our stable offering normalizing the has have to is The after of and neutral sales compared relatively economics margin post improved margin. pandemic.

growth XXXX been store in-store sales. company's have Our and by driven sales margin growth, fiscal sales comparable expansion

volatility often the with services sales incentives. delivery-related Our or associated promotional by not been new have margin adding results impacted and delivery

to an now Turning priorities. key update on

We of continue penetration XX% XX%, sales up program {N}power quarter third as year net a to reflected in leverage the our ago. from Rewards

ago. sales, products a deliver the products branded branded Grocers X.X% year our Natural for quarter, X.X% at accounted up Our premium from In prices. total quality third compelling of

our fifth by company. Natural unit be a brand that During XX Grocers crafted in a growth items, and certified generation continues cereal we priority Italy certified new a organic, quarter, gluten-free development business. Store family launched and to line is the including for

Village, opened remodels and stores Missouri we is the in a Texas one relocated in stores. to and of area. Lake of Oklahoma Incline the major Independence, City Tahoe Subsequent our During the which our we third Nevada, new quarter, quarter, store completed Temple,

closing, In service in excellence customer were their for and to driving to instrumental operational crew like thank exceptional goodXu that commitment our our I would strong results.

founding We that who operations to principles supply are our and our are over our an results have values. call our Todd share chain to that, stores, guidance. dedicated to fortunate will affinity to ensuring for and a With reflect financial crew these turn discuss I and

Thank you, afternoon. Kemper, good and

through comparable increased prior a of X-year pleased and our are with basis. year increased X.X% from million. increased XX.X% the period We third average quarter. very to the the X.X% store continuation sales strong sales Net $XXX.X on performance Daily

Our daily comps. with average marks positive count transaction increased customer quarter X.X%. our traffic consecutive sixth This

transaction X.X%. increased size item transaction in increase count. in This an consecutive the with basket. count increase. had quarter per was average attributed product major About of second comp increase was an item half daily size category Every Our items to an the

The product annualized the our inflation that inflation. other half size transaction of cost was attributed X%. the comp estimate to We third quarter approximately cost was for

product across categories. growth Sales broad-based to continued be

supplement departments produce. points by occupancy lower comp mix. sales was the dietary a performing Gross lower partially basis driven strongest digits. XX leverage, meat, by sales offset margin, supplement single increased product dairy to and XX.X%, attributable margin were The Our low store to in primarily

expenses, sales, increased expense expenses leverage. X.X% decreased reflecting expense XX Administrative higher offset elevated expenses, decreased of as as sales XX points, a Store driven Store by than as sales a the compensation percentage in higher primarily leverage basis quarter, third percentage costs. basis expenses. labor more of points, reflecting

to tax during Operating and the XXXX. of XXXX quarter. and the XX.X% the was quarter donation third The per rate income or fiscal diluted of to million increase $X.XX effective tax quarter third XX.X% Adjusted This per earnings compares million. year. of income share share food $X.X income million in million net with of earnings XX.X% third $X.X in third quarter. $XX.X increased the fiscal Net primarily last of diluted the XX.X% EBITDA effective respectively. of to the for was $X.XX increased in quarter The XXXX, deductions $XX.X rate to third in attributable lower was

flow. on our sheet including $XX We Turning position, in million a cash to credit the third borrowings outstanding equivalents. quarter $XX.X financial strong had million the million cash ended revolving We in facility. $XX.X and cash of balance and

During operations $XX.X fiscal net in and of in invested expenditures, resulting cash million $XX.X of XXXX, for $XX.X cash we relocated the capital stores, first flow from of free new generated months primarily million X million. and

We share. are sales diluted daily raising per store our XXXX guidance average for earnings comparable fiscal growth and

relocation and Additionally, stores we number are expenditures remodels the new refining our our of outlook for narrowing range. capital and

X%, Opened and million share stores, following: the between capital includes $XX $X.XX comparable towards to diluted earnings X achieve guidance remodel sales and initiatives. $XX to revised daily million our store expenditures growth new relocate or X% stores, X growth achieved per between $X.XX direct support and average Our

In strong quarter and closing, are by we had encouraged trends. a operating our

to growth drive and confident in enhance all stakeholders. are to for our value We continue profitable ability

like would open the I Now lines up for to Thank questions. you.

over [Operator our closing would conference Instructions] turn back for concludes I remarks. any questions, to session. question-and-answer like Kemper Being the no to Isely this

results. Thank forward our call marks serving and XX and locations on fiscal much August XXXX quarter communities. you XXth Thank you, anniversary. for help you results. our I goodbye. and very visit year third to the our one encourage joining This regarding to us We August between our month our discuss you our quarter updating to of full XX fourth us next year look to celebrate

Natural third The earnings XXXX Grocers quarter conference fiscal conference call. year has now attending for concluded. the Thank you

disconnect. now may You