Earnings release
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Natural Grocers Investor Relations Natural Grocers by Vitamin Cottage Announces Third Quarter Fiscal 2026 Results LAKEWOOD , Colo . , Aug. 6 , 2026 / PRNewswire / -- Natural Grocers by Vitamin Cottage , Inc. ( NYSE : NGVC ) today announced results for its third quarter of fiscal 2026 ended June 30 , 2026 . NATURAL GROCERS good4u Ⓡ Highlights for Third Quarter Fiscal 2026 Compared to Third Quarter Fiscal 2025 • Net sales increased 1.8 % to $ 334.7 million ; • Daily average comparable store sales increased 1.2 % , and 8.6 % on a two - year basis ; • Net income was $ 11.1 million , with diluted earnings per share of $ 0.48 ; and Opened three new stores and relocated one store . • " We delivered positive daily average comparable store sales growth in the third quarter despite a challenging consumer environment , with comparable store sales growth accelerating to 1.2 % from 0.5 % in the second quarter . Furthermore , our new store unit growth strategy continues to gain momentum , with six stores opened fiscal year - to - date , including three during the third quarter and two subsequent to quarter - end , " said Kemper Isely , Co - President . " We believe that our accelerating new store unit growth , an increasing consumer focus on health and wellness , and our differentiated offering – built on rigorous product standards and our Always AffordableS pricing strategy - position Natural Grocers for long - term growth by delivering compelling value to customers and strengthening our competitive position . " SM Mr. Isely added , " We are honored to be named the 2026 Sustainability Retailer of the Year by Produce Business , a leading trade publication serving the fresh produce industry . This recognition reflects our longstanding commitment to sustainability , from offering 100 % certified organic produce to supporting regenerative agriculture and environmental stewardship . It also underscores the purpose - driven values that continue to guide our Company and serve our customers and communities . " In addition to presenting the financial results of Natural Grocers by Vitamin Cottage , Inc. and its subsidiaries ( collectively , the Company ) in conformity with U.S. generally accepted accounting principles ( GAAP ) , the Company is also presenting EBITDA and Adjusted EBITDA , which are non - GAAP financial measures . The reconciliation from GAAP to these non- GAAP financial measures is provided at the end of this earnings release . Operating Results — Third Quarter Fiscal 2026 Compared to Third Quarter Fiscal 2025 Net sales during the third quarter of fiscal 2026 increased $ 6.0 million , or 1.8 % , to $ 334.7 million , compared to the third quarter of fiscal 2025 , due to a $ 4.0 million increase in comparable store sales and a $ 3.1 million increase in new store sales , partially offset by a $ 1.1 million decrease in net sales related to closed stores . Daily average comparable store sales increased 1.2 % in the third quarter of fiscal 2026 , comprised of a 3.1 % increase in daily average transaction size and a 1.8 % decrease in daily average transaction count . Gross profit during the third quarter of fiscal 2026 decreased $ 0.3 million to $ 98.0 million . Gross profit reflects earnings after product and store occupancy costs . Gross margin decreased to 29.3 % during the third quarter of fiscal 2026 , compared to 29.9 % in the third quarter of fiscal 2025. The decrease in gross margin was driven by lower product margin primarily due to an unfavorable change in sales mix , as well as higher merchandise inventory shrink and freight costs . The Company's primary
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distributor's cybersecurity incident in the third quarter of fiscal 2025 affected the year-over-year comparability of productmargin mix and shrink for the current period. Store expenses during the third quarter of fiscal 2026 increased 0.7% to $72.2 million. Store expenses as a percentage of netsales were 21.6% during the third quarter of fiscal 2026, down from 21.8% in the third quarter of fiscal 2025, driven byexpense management. Administrative expenses during the third quarter of fiscal 2026 were $9.5 million, compared to $10.9 million in the thirdquarter of fiscal 2025. Administrative expenses as a percentage of net sales were 2.8% in the third quarter of fiscal 2026,down from 3.3% in the third quarter of fiscal 2025. Administrative expenses during the third quarter of fiscal 2026 included abusiness interruption insurance recovery gain of $2.0 million related to the Company's primary distributor's cybersecurityincident in June and July 2025. Pre-opening expenses during the third quarter of fiscal 2026 were $1.3 million compared to less than $0.1 million during thethird quarter of fiscal 2025. Operating income for the third quarter of fiscal 2026 was $15.0 million, compared to $15.6 million in the third quarter offiscal 2025. Operating margin during the third quarter of fiscal 2026 was 4.5%, down from 4.7% in the third quarter of fiscal2025. Net income for the third quarter of fiscal 2026 was $11.1 million, or $0.48 diluted earnings per share, compared to net incomeof $11.6 million, or $0.50 diluted earnings per share, for the third quarter of fiscal 2025. Adjusted EBITDA for the third quarter of fiscal 2026 was $22.5 million, compared to $24.4 million in the third quarter offiscal 2025. Operating Results — First Nine Months Fiscal 2026 Compared to First Nine Months Fiscal 2025 Net sales during the first nine months of fiscal 2026 increased $13.0 million, or 1.3%, to $1,007.7 million, compared to thefirst nine months of fiscal 2025, due to an $11.3 million increase in comparable store sales and a $6.6 million increase in newstore sales, partially offset by a $5.0 million decrease in net sales related to closed stores. Daily average comparable storesales increased 1.1% in the first nine months of fiscal 2026, comprised of a 1.8% increase in daily average transaction sizeand a 0.6% decrease in daily average transaction count. Gross profit during the first nine months of fiscal 2026 increased $0.5 million, or 0.2%, to $299.3 million, compared to $298.9million in the first nine months of fiscal 2025. Gross profit reflects earnings after product and store occupancy costs. Grossmargin decreased to 29.7% during the first nine months of fiscal 2026, compared to 30.0% in the first nine months of fiscal2025. The decrease in gross margin was driven by lower product margin primarily due to unfavorable sales mix and highershrink. Store expenses during the first nine months of fiscal 2026 decreased 0.5% to $216.8 million, driven by expense management.Store expenses as a percentage of net sales were 21.5% during the first nine months of fiscal 2026, down from 21.9% in thefirst nine months of fiscal 2025. Administrative expenses during the first nine months of fiscal 2026 decreased 3.1% to $32.5 million, primarily driven by thebusiness interruption insurance recovery gain of $2.0 million recorded during the third quarter of fiscal 2026 and lowercompensation expenses, partially offset by higher technology expenses. Administrative expenses as a percentage of net saleswere 3.2% during the first nine months of fiscal 2026, down from 3.4% in the first nine months of fiscal 2025. Pre-opening expenses were $2.3 million during the first nine months of fiscal 2026 compared to $0.9 million for the first ninemonths of fiscal 2025. Operating income for the first nine months of fiscal 2026 increased 2.7% to $47.7 million. Operating margin was 4.7% ineach of the first nine months of fiscal 2026 and fiscal 2025. Net income for the first nine months of fiscal 2026 was $35.8 million, or $1.54 diluted earnings per share, compared to netincome of $34.6 million, or $1.49 diluted earnings per share, for the first nine months of fiscal 2025. Adjusted EBITDA for the first nine months of fiscal 2026 was $73.4 million, compared to $73.5 million in the first ninemonths of fiscal 2025. Balance Sheet and Cash Flow As of June 30, 2026, the Company had $17.5 million in cash and cash equivalents and no outstanding borrowings on its $70.0million revolving credit facility. During the first nine months of fiscal 2026, the Company generated $55.1 million in cash from operations and invested $40.3million in net capital expenditures, primarily for new and relocated/remodeled stores and real property acquisitions.
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Dividend Announcement Today, the Company announced the declaration of a quarterly cash dividend of $0.15 per common share. The dividend will bepaid on September 2, 2026 to stockholders of record at the close of business on August 17, 2026. Growth and Development During the third quarter of fiscal 2026, the Company opened three new stores. The Company ended the third quarter with 172stores in 22 states. Since June 30, 2026, the Company opened two new stores. Fiscal 2026 Outlook The Company is refining its fiscal 2026 outlook: Fiscal 2026 Prior Outlook Updated Outlook Number of new stores 6 to 8 6 to 7Number of relocations/remodels 2 to 3 2Daily average comparable store sales growth1.5% to 2.5% 1.5% to 2.0%Diluted earnings per share $2.07 to $2.15 $2.07 to $2.11 Capital expenditures (in millions) $45 to $50 $45 to $50 Earnings Conference Call The Company will host a conference call today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time) to discuss this earningsrelease. The dial-in number is 1-888-347-6606 (US) or 1-412-902-4289 (International). The conference ID is "NaturalGrocers Q3 FY 2026 Earnings Call." A simultaneous audio webcast will be available athttp://Investors.NaturalGrocers.com and archived for a minimum of 20 days. About Natural Grocers by Vitamin Cottage Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) is an expanding specialty retailer of natural and organic groceries,body care products and dietary supplements. The grocery products sold by Natural Grocers must meet strict quality guidelinesand may not contain artificial flavors, preservatives, or sweeteners (as defined in its standards), synthetic colors, or partiallyhydrogenated or hydrogenated oils. The Company sells only USDA certified organic produce and exclusively pasture-raised,non-confinement dairy products, and free-range eggs. Natural Grocers' flexible smaller-store format allows it to offeraffordable prices in a shopper-friendly, clean and convenient retail environment. The Company also provides extensive freescience-based nutrition education programs to help customers make informed health and nutrition choices. The Company,founded in 1955, has 174 stores in 22 states. Visit www.NaturalGrocers.com for more information and store locations. Forward-Looking Statements The following constitutes a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995. Except for thehistorical information contained herein, statements in this release are "forward-looking statements" and are based onmanagement's current expectations and are subject to uncertainty and changes in circumstances. All statements that are notstatements of historical fact are forward-looking statements. Actual results could differ materially from these expectations dueto changes in global, national, regional or local political, economic, inflationary, disinflationary, recessionary, business,interest rate, labor market, competitive, market, regulatory, trade policy, supply chain and other factors, and other risksdetailed in the Company's Annual Report on Form 10-K and the Company's subsequent quarterly reports on Form 10-Q. Theinformation contained herein speaks only as of the date of this release and the Company undertakes no obligation to publiclyupdate forward-looking statements, except as may be required by the securities laws. For further information regarding risks and uncertainties associated with the Company's business, please refer to the"Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of theCompany's filings with the Securities and Exchange Commission, including, but not limited to, the Form 10-K and theCompany's subsequent quarterly reports on Form 10-Q, copies of which may be obtained by contacting Investor Relations at303-986-4600 or by visiting the Company's website at http://Investors.NaturalGrocers.com. Investor Contact: Reed Anderson, ICR, 646-277-1260, reed.anderson@icrinc.com NATURAL GROCERS BY VITAMIN COTTAGE, INC. Consolidated Statements of Income
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(Unaudited)(Dollars in thousands, except per share data) Three months endedJune 30, Nine months endedJune 30,2026 2025 2026 2025Net sales $ 334,739 328,7051,007,694 994,695Cost of goods sold and occupancy costs 236,731 230,426 708,384 695,844Gross profit 98,008 98,279 299,310 298,851Store expenses 72,220 71,719 216,802 218,000Administrative expenses 9,504 10,949 32,464 33,486Pre-opening expenses 1,288 24 2,296 877Operating income 14,996 15,587 47,748 46,488Interest expense, net (663) (694) (2,008) (2,367)Income before income taxes 14,333 14,893 45,740 44,121Provision for income taxes (3,260) (3,288) (9,899) (9,477) Net income $ 11,073 11,605 35,841 34,644 Net income per share of common stock: Basic $ 0.48 0.51 1.56 1.51 Diluted $ 0.48 0.50 1.54 1.49 Weighted average number of shares of common stock outstanding: Basic 23,042,82122,951,33923,028,70122,930,084 Diluted 23,263,40523,311,93523,241,88423,247,316 NATURAL GROCERS BY VITAMIN COTTAGE, INC. Consolidated Balance Sheets(Unaudited)(Dollars in thousands, except per share data) June 30,2026 September 30,2025AssetsCurrent assets:Cash and cash equivalents $ 17,467 17,116Accounts receivable, net 10,616 11,966Merchandise inventory 135,294 132,968Prepaid expenses and other current assets 10,747 6,025 Total current assets 174,124 168,075 Property and equipment, net 206,997 182,741Other assets:Operating lease assets, net 251,627 259,586Finance lease assets, net 38,751 42,895Other assets 5,387 5,452Goodwill and other intangible assets, net 10,801 11,755 Total other assets 306,566 319,688 Total assets $ 687,687 670,504 Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable $ 89,670 80,991Accrued expenses 26,518 37,236Co-PACE Financing, current portion 58 —Operating lease obligations, current portion 37,728 36,495Finance lease obligations, current portion 4,253 4,061 Total current liabilities 158,227 158,783Long-term liabilities:Co-PACE Financing, net of current portion 1,394 —Operating lease obligations, net of current portion 237,728 245,803Finance lease obligations, net of current portion 41,519 45,660Deferred income tax liabilities, net 9,403 7,863
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Total long-term liabilities 290,044 299,326Total liabilities 448,271 458,109Stockholders' equity:Common stock, $0.001 par value, 50,000,000 shares authorized, 23,045,851 and 22,954,712 shares issued and outstanding at June 30, 2026 and September 30, 2025, respectively 23 23Additional paid-in capital 64,579 63,033Retained earnings 174,814 149,339Total stockholders' equity 239,416 212,395 Total liabilities and stockholders' equity $ 687,687 670,504 NATURAL GROCERS BY VITAMIN COTTAGE, INC. Consolidated Statements of Cash Flows(Unaudited)(Dollars in thousands) Nine months ended June 30,2026 2025Operating activities:Net income $ 35,841 34,644Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization 24,456 23,791Loss on impairment of long-lived assets and store closing costs 21 81Gain on disposal of property and equipment (11) (30)Share-based compensation 2,783 3,100Deferred income tax expense (benefit) 1,540 (2,444)Non-cash interest expense 4 3Other 385 3Changes in operating assets and liabilities:Decrease (increase) in:Accounts receivable, net 2,631 (1,055)Merchandise inventory (2,326) (3,954)Prepaid expenses and other assets (2,636) (5,232)Income tax receivable (2,383) —Operating lease assets 25,904 25,221(Decrease) increase in:Operating lease liabilities (26,080) (25,565)Accounts payable 5,686 (4,520)Accrued expenses (10,718) (4,366)Net cash provided by operating activities 55,097 39,677Investing activities:Acquisition of property and equipment (39,936) (23,124)Acquisition of other intangibles (460) (167)Proceeds from sale of property and equipment 29 44Proceeds from property insurance settlements 25 305Net cash used in investing activities (40,342) (22,942)Financing activities:Borrowings under revolving loans 491,700 486,200Repayments under revolving loans (491,700) (486,200)Finance lease obligation payments (2,801) (2,931)Dividends to shareholders (10,366) (8,255)Payments on withholding tax for restricted stock unit vesting (1,237) (1,242)Net cash used in financing activities (14,404) (12,428)Net increase in cash and cash equivalents 351 4,307Cash and cash equivalents, beginning of period 17,116 8,871 Cash and cash equivalents, end of period $ 17,467 13,178 Supplemental disclosures of cash flow information:Cash paid for interest $ 596 959Cash paid for interest on finance lease obligations, net of capitalized interest of $313 and $164, respectively 1,359 1,441Income taxes paid 10,742 11,644Supplemental disclosures of non-cash investing and financing activities:Acquisition of property and equipment not yet paid $ 5,375 2,157
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Lease assets obtained in exchange for new operating lease obligations18,386 14,022Lease assets obtained in exchange for new finance lease obligations (32) 3,135Building and land acquired in exchange for assumed Co-PACE Financing 1,343 —Tenant lease intangibles acquired in exchange for assumed Co-PACE Financing 109 — NATURAL GROCERS BY VITAMIN COTTAGE, INC. Non-GAAP Financial Measures(Unaudited) EBITDA and Adjusted EBITDA EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP. We define EBITDA as net incomebefore interest expense, provision for income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDAas adjusted to exclude the effects of certain income and expense items that management believes make it more difficult toassess the Company's actual operating performance, including certain items such as impairment charges, store closing costs,share-based compensation, amortization of SaaS implementation costs, business interruption insurance recovery gain, andnon-recurring items. The following table reconciles net income to EBITDA and Adjusted EBITDA, dollars in thousands: Three months endedJune 30, Nine months endedJune 30,2026 2025 2026 2025Net income $ 11,073 11,605 35,841 34,644Interest expense, net 663 694 2,008 2,367Provision for income taxes 3,260 3,288 9,899 9,477Depreciation and amortization 8,332 7,953 24,456 23,791EBITDA 23,32823,540 72,204 70,279Impairment of long-lived assets and store closing costs— — 45 118Share-based compensation 981 843 2,783 3,100Amortization of SaaS implementation costs225 2 378 3Business interruption insurance recovery gain(1,993) — (1,993) — Adjusted EBITDA $ 22,54124,385 73,417 73,500 EBITDA decreased 0.9% to $23.3 million for the three months ended June 30, 2026 compared to $23.5 million for the threemonths ended June 30, 2025. EBITDA increased 2.7% to $72.2 million for the nine months ended June 30, 2026 compared to$70.3 million for the nine months ended June 30, 2025. EBITDA as a percentage of net sales was 7.0% and 7.2% for the threemonths ended June 30, 2026 and 2025, respectively. EBITDA as a percentage of net sales was 7.2% and 7.1% for the ninemonths ended June 30, 2026 and 2025, respectively. Adjusted EBITDA decreased 7.6% to $22.5 million for the three months ended June 30, 2026 compared to $24.4 million forthe three months ended June 30, 2025. Adjusted EBITDA decreased 0.1% to $73.4 million for the nine months ended June30, 2026 compared to $73.5 million for the nine months ended June 30, 2025. Adjusted EBITDA as a percentage of net saleswas 6.7% and 7.4% for the three months ended June 30, 2026 and 2025, respectively. Adjusted EBITDA as a percentage ofnet sales was 7.3% and 7.4% for the nine months ended June 30, 2026 and 2025, respectively. Management believes some investors' understanding of our performance is enhanced by including EBITDA and AdjustedEBITDA, which are non-GAAP financial measures. We believe EBITDA and Adjusted EBITDA provide additionalinformation about: (i) our operating performance, because they assist us in comparing the operating performance of our storeson a consistent basis, as they remove the impact of non-cash depreciation and amortization expense as well as items notdirectly resulting from our core operations, such as interest expense and income taxes and (ii) our performance and theeffectiveness of our operational strategies. Additionally, EBITDA is a component of a measure in our financial covenantsunder our credit facility. Furthermore, management believes some investors use EBITDA and Adjusted EBITDA as supplemental measures to evaluatethe overall operating performance of companies in our industry. Management believes that some investors' understanding ofour performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing ourongoing results of operations. By providing these non-GAAP financial measures, together with a reconciliation from netincome, we believe we are enhancing investors' understanding of our business and our results of operations, as well asassisting investors in evaluating how well we are executing our strategic initiatives. Our competitors may define EBITDA and Adjusted EBITDA differently, and as a result, our measures of EBITDA andAdjusted EBITDA may not be directly comparable to EBITDA and Adjusted EBITDA of other companies. Items excluded
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from EBITDA and Adjusted EBITDA are significant components in understanding and assessing financial performance.EBITDA and Adjusted EBITDA are supplemental measures of operating performance that do not represent and should not beconsidered in isolation or as an alternative to, or substitute for, net income or other financial statement data presented in theconsolidated financial statements as indicators of financial performance. EBITDA and Adjusted EBITDA have limitations asanalytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported underGAAP. Some of the limitations are: EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expendituresor contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; EBITDA and Adjusted EBITDA do not reflect any depreciation or interest expense for leases classified as financeleases; EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to serviceinterest or principal payments on our debt; Adjusted EBITDA does not reflect share-based compensation, impairment of long-lived assets, store closing costs,amortization of SaaS implementation costs and business interruption insurance recovery gain; EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes; and Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will oftenhave to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for suchreplacements. Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cashavailable to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAPresults and using EBITDA and Adjusted EBITDA as supplemental information. SOURCE Natural Grocers by Vitamin Cottage, Inc. https://investors.naturalgrocers.com/2026-08-06-Natural-Grocers-by-Vitamin-Cottage-Announces-Third-Quarter-Fiscal-2026-Results