Natural Grocers leverages promos into growth

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Natural Grocers leverages promos into growth

By Gina Acosta - 05/04/2018

Natural Grocers is leveraging promotions into impressive same store sales growth at a time when many food retailers are battling ever-increasing competition.

The company increased its outlook for same store sales growth for fiscal 2018 from 3.5% to 4.5% as it reported that comps grew 7.1% in the second quarter ended March 31.

Natural Grocers routinely holds giveaways, cooking classes, vendor demos, ice cream socials and many other promotional events that are popular with customers.

"Sales momentum continued to accelerate during the second quarter, which, combined with more focused pricing and promotional activities, generated year-over-year growth in both EBITDA and diluted earnings per share," said Kemper Isely, Co-President.  "We are pleased with the 7.1% growth in daily average comparable store sales during the second quarter, which reflected a continued positive customer response to our enhanced sales initiatives. We fine-tuned our pricing and promotional investments during the second quarter, resulting in an improved gross margin relative to the first quarter while delivering enhanced value to our customers. Our strong sales growth and prudent new store expansion strategy enabled us to leverage expenses to support improved earnings."

During the second quarter, net sales increased $23.7 million, or 12.3%, to $215.9 million compared to the same period in fiscal 2017, primarily driven by a $13.5 million increase in same store sales and a $10.2 million increase in new store sales. The 7.1% comparable store sales increase during the second quarter was driven by a 5% increase in daily average transaction count and a 2% increase in average transaction size. 

Gross profit increased 7.6% over the same period in fiscal 2017 to $58.3 million, primarily driven by an increase in the number of comparable stores.

Net income increased 13.6% over the same period in fiscal 2017 to $3.4 million with diluted earnings per share of 15 cents. EBITDA in the second quarter of fiscal 2018 increased 1.7% to $13.1 million compared to the second quarter of fiscal 2017.

During the second quarter, the company opened three new stores, bringing the total store count as of March 3 to 145 stores in 19 states. Since April 1, the company has opened one store in Oregon. The company has eight signed leases for stores that are planned to open in fiscal 2018 and beyond in Colorado, Iowa, Oregon and Texas.  

The board of directors also authorized a two-year extension on its $10 million share repurchase program.


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