Sign in

You're signed outSign in or to get full access.

NG

Natural Grocers by Vitamin Cottage, Inc. (NGVC)·Q3 2025 Earnings Summary

Executive Summary

  • Strong Q3: Net sales up 6.3% to $328.7M, comps +7.4%, gross margin +70 bps to 29.9%, EPS +25% to $0.50; operating margin +50 bps to 4.7% .
  • Guidance raised: Fiscal 2025 comps to 7.25–7.75% (from 6.5–7.5%) and EPS to $1.90–$1.95 (from $1.78–$1.86); capex cut to $30–$33M; FY26 new-store outlook introduced at 6–8 openings .
  • Transient disruption: UNFI cybersecurity incident trimmed comps by 1.0–1.5 pts and EPS by $0.04–$0.05; operations normalized post-incident .
  • Capital returns and balance sheet: $0.12 dividend declared; $13.2M cash, zero revolver borrowings at quarter-end .

What Went Well and What Went Wrong

  • What Went Well

    • Broad-based same-store momentum: DA comp +7.4% on +4.8% transactions and +2.4% ticket, strongest growth in differentiated categories (meat, dairy, produce) .
    • Margin execution: Gross margin +70 bps on effective promotions; operating margin +50 bps; adjusted EBITDA +10.1% YoY .
    • Strategic engagement: Loyalty penetration (Empower Rewards) reached 82%, up from 80% YoY, supporting repeat behavior and basket expansion .

  • What Went Wrong

    • Supply chain disruption: UNFI cyber incident reduced Q3 net sales by ~$3.5–$4.0M, comps by 1.0–1.5 pts, and EPS by $0.04–$0.05 .
    • Overhead pressure: Administrative expenses +14.7% YoY; admin as % of sales up 20 bps on higher tech and compensation .
    • FY25 unit growth slower: New-store outlook lowered to 2 openings (from 3–4) due to timing, partly deferring spend and growth into FY26 .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Net Sales ($M)$309.1 $330.2 $335.8 $328.7
Net Income ($M)$9.2 $9.9 $13.1 $11.6
Diluted EPS ($)$0.40 $0.43 $0.56 $0.50
Gross Margin (%)29.2% 29.9% 30.3% 29.9%
Operating Income ($M)$12.8 $13.3 $17.6 $15.6
Operating Margin (%)4.2% 4.0% 5.2% 4.7%
EBITDA ($M)$20.7 $21.3 $25.4 $23.5
EBITDA Margin (%)6.7% 6.4% 7.6% 7.2%
Adjusted EBITDA ($M)$22.2 $22.8 $26.3 $24.4

Vs Estimates (Q3 2025)

  • Revenue: n/a (consensus unavailable) [GetEstimates: S&P Global]*
  • EPS: n/a (consensus unavailable) [GetEstimates: S&P Global]*
  • Adj. EBITDA: n/a (consensus unavailable) [GetEstimates: S&P Global]*

KPIs

KPIQ3 2024Q1 2025Q2 2025Q3 2025
Daily Avg Comp Sales (%)n/a8.9% 8.9% 7.4%
Transaction Count (YoY, %)n/a5.3% 5.9% 4.8%
Transaction Size (YoY, %)n/a3.4% 2.8% 2.4%
Two-Year Comp (%)n/a15.1% 16.4% 14.6%
Store Expenses (% of Sales)21.9% 22.3% 21.7% 21.8%
Admin Expenses (% of Sales)3.1% 3.5% 3.3% 3.3%
Stores (end of period)n/a167 169 169
Loyalty Penetrationn/an/an/a82%

Note: NGVC reports as a single segment; no segment revenue table disclosed .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
New Stores (count)FY253–4 2 Lowered
Relocations/Remodels (count)FY252–4 3 Updated (narrowed up)
Daily Avg Comp Sales GrowthFY256.5–7.5% 7.25–7.75% Raised
Diluted EPS ($)FY251.78–1.86 1.90–1.95 Raised
Capital Expenditures ($M)FY2536–44 30–33 Lowered
New Stores (count)FY26—6–8 Introduced
Dividend per share ($)Quarterly$0.12 (ongoing program) $0.12 declared 9/17/25 pay date Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Customer demand/trafficQ1: DA comps +8.9% on +5.3% traffic; items/basket up; modest inflation . Q2: DA comps +8.9% on +5.9% traffic; sales broad-based .DA comps +7.4% on +4.8% traffic; strong across regions/categories; no trade-down observed .Strong and broad-based; slight deceleration vs Q2 but resilient .
Margin management/promotionsQ1: GM +50 bps to 29.9%; leverage drove EPS growth . Q2: GM +100 bps to 30.3%; op margin +150 bps .GM +70 bps to 29.9%; op margin +50 bps; promotions effective .Sustained improvement; magnitude moderates vs Q2 .
Loyalty/engagementQ1: {N}power, offers, marketing drove comps . Q2: Marketing + {N}power momentum .Loyalty penetration 82% (vs 80% LY) .Engagement rising .
Unit growth outlookQ1: FY25 new stores 4–6 . Q2: FY25 new stores 3–4 .FY25 new stores 2; FY26 accelerated to 6–8; 5 leases signed, ~75 vetted communities .Near-term slower; medium-term acceleration .
Opex/technologyQ1: Admin % +40 bps on comp/tech . Q2: Admin % +20 bps on comp/tech .Admin % +20 bps on higher tech/comp .Continued tech investment; modest deleverage .
Supply chainPrior: No disruptions noted.UNFI cyber incident impacted sales and EPS; normalized by release date .One-off, resolved .

Management Commentary

  • “Our third quarter performance exceeded our expectations... Strong sales combined with effective promotions and enhanced store productivity helped drive a 50 basis point improvement in our operating margin, along with a 25% increase in diluted earnings per share.” — Kemper Isely, Co‑President .
  • “We estimate that the [UNFI] disruption... adversely impacted our third quarter... daily average comparable store sales by 1.0 to 1.5 percentage points, and diluted earnings per share by $0.04 to $0.05... our operations have substantially normalized.” — Kemper Isely .
  • “Gross margin increased 70 basis points to 29.9%, driven by higher product margin, primarily attributed to effective promotions.” — CFO Richard Hallé .
  • “We are planning to accelerate store growth in fiscal 2026 and expect to open six to eight new stores... five leases signed and ~75 vetted and approved communities.” — Kemper Isely .

Q&A Highlights

  • There were no analyst questions on the call; management provided prepared remarks only and reiterated the raised FY25 outlook and FY26 unit acceleration .

Estimates Context

  • Q3 2025: Consensus EPS and revenue unavailable; limited analyst coverage. Values retrieved from S&P Global.*
  • Forward (illustrative): Q4 2025 EPS consensus mean 0.42 on 1 estimate; target price consensus mean $54; consensus recommendation not available. Values retrieved from S&P Global.* [GetEstimates]
MetricQ3 2025Q4 2025Q1 2026
Primary EPS Consensus Mean ($)n/a*0.42 (1 est.)*n/a*
Revenue Consensus Mean ($M)n/a*n/a*n/a*
Target Price Consensus Mean ($)54.0*54.0*54.0*

Note: Where “n/a”, S&P Global did not show a published consensus at this time. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Core demand remains healthy with sustained traffic growth and expanding baskets; comps +7.4% despite a one‑time distributor disruption indicates resilient customer relevance .
  • Margin trajectory is positive on promotions and productivity; GM +70 bps and OM +50 bps support double‑digit EPS growth and set a constructive base into FYQ4 seasonality .
  • Guidance raised again: FY25 EPS to $1.90–$1.95 and comps to 7.25–7.75% signal confidence; capex trimmed due to timing creates near‑term FCF support .
  • FY26 unit acceleration (6–8 openings) plus a deep pipeline (leases signed; ~75 vetted markets) underpins medium‑term growth visibility beyond FY25 .
  • Overhead/tech spend is a watch item (admin % +20 bps); sustained sales leverage and promo efficiency are key to offsetting ongoing tech investments .
  • Dividend ($0.12) maintained alongside clean balance sheet (no revolver borrowings), offering income support while retaining flexibility for growth .
  • Stock catalyst: the guidance raise and FY26 unit acceleration are likely the primary positive drivers; any incremental disclosure on holiday quarter comps and UNFI normalization should shape near‑term sentiment .

Footnote: *Values retrieved from S&P Global.