Natural Grocers notches $521 million in sales in fiscal 2014, sets sights on 100-store goal in 2015

Natural Grocers pursues a strategy that splits the store somewhat evenly between food and supplement sales.  But like other retailers in both the natural food and supplement retailing channels, the company has boosted sales by pursuing a strategy of opening new stores.  Natural Grocers opened three new stores in the fourth quarter and 15 for the year and now operates 87 stores in 14 states west of the Mississippi.  The company plans to open 18 new stores in fiscal 2015 and in the fourth quarter it acquired a health food store in Missouri which will count toward that goal.

New stores contributed strongly toward the company’s results, which generally met or exceeded Wall Street expectations. Comparable store sales increased 3.7% in the quarter and 5.6% for the year.  But new stores brought in an additional $16.3 million in next sales toward the bottom line.  Growth in comparable store sales brought in an additional $3.7 million during the quarter.

 and acquired an additional one, and the company plans to open 18 in fiscal 2015.  The company now has 87 stores in 14 states west of the Mississippi.

“We are excited to reach a significant milestone in fiscal 2015 as we approach our 60th anniversary, while crossing the 100 store mark. We believe celebrating this milestone recognizes our position as early pioneers in visionary in the health and wellness area,”​ said CEO Kemper Isley in an earnings call with analysts that was transcripted by the site seekingalpha.com​.

Rebound in supplements​

Also helping to drive the results was a coming turnaround in supplement sales, Isley said.  Natural Grocers had experienced the same headwinds that other supplement retailers have over the past year. Sales growth has slowed and some sectors like omega-3s have actually contracted, though there has been little in the way of data from market research companies to put hard numbers around that trend.

“We’re really encouraged by the supplement sales. Particularly in October they were really good. . . so we’re pretty pleased with that and overall the company decrease in supplement sales business has slowed. The market share decreases slowed significantly in the last quarter and in October in particular,”​ Isley said.

Going non GMO​

Isley said the company is also making a commitment to moving toward a non GMO positioning, even though the GMO labeling initiative failed in the company’s home state of Colorado.  The company already sells organic products, but its extending its reach into the feed supply chain for its meat offerings.

“I think consumers really appreciate the fact that we are offering items like our chickens has a non-GMO option, and then this year we also have turkeys that are non-GMO. And I think we’re the only chain that can really say that in the country right at the moment. I mean it’s definitely a good opportunity to distinguish our quality difference between us and many of our competitors,”​ he said.

Earnings details​

Net sales increased 17.8% to $135.7 million in the fourth quarter and increased 20.9% to $520.7 million in the fiscal year. Daily average comparable store sales increased 3.7% in the fourth quarter and increased 5.6% in the fiscal year. Net income increased 43.1% to $3.2 million with diluted earnings per share of $0.14 in the fourth quarter and increased 27.7% to $13.5 million with diluted earnings per share of $0.60 in the fiscal year. EBITDA increased 22.5% to $10.3 million in the fourth quarter and increased 27.2% to $41.5 million in the fiscal year.