Natural Grocers shared encouraging results for its second quarter of fiscal year 2022.
A strong showing in the second quarter of fiscal 2022 has prompted Natural Grocers by Vitamin Cottage Inc. to raise its outlook for the fiscal year.
For the period ended March 31, the grocer saw net sales increase 4.9% to $271.8 million, with daily average comparable-store sales up 4.3%, compared with the same time period in fiscal 2021. Net income increased 35.1%, and adjusted EBITDA was up 11.8% to $16.1 million.
“We delivered strong results in the second quarter, including a 4.3% increase in daily average comparable-store sales, a 50-basis-point improvement in gross margin, and 33.3% growth in diluted earnings per share compared to the second quarter of last year,” said Kemper Isely, co-president. “We are also pleased with our transaction count comp trends, which have had a positive year-over-year increase for four consecutive quarters.”
Isely continued: “We believe the enduring strength of our business model is reflected in the 13.5% increase in daily average comparable-store sales versus the second quarter of 2019. Sales growth continues to be driven by consumers' robust demand for our high-quality natural and organic products at always affordable prices. Our crew members' commitment to operational execution and exceptional customer service were instrumental in driving our strong performance.”
During the second quarter of fiscal 2022, store expenses increased 2% to $59.6 million, and store expenses as a percentage of net sales was 21.9%, down from 22.5% in the second quarter of fiscal 2021. According to the company, that reduction reflects leverage created by higher sales and a more normalized operating environment compared with the prior fiscal year period.
Administrative expenses for the period increased 28.5% to $8.2 million, and operating income increased 32.2% to $8.9 million.
“Our second-quarter results also underscore the agility of our operating model to quickly adapt to changes in the operating environment, including challenges related to the pandemic, labor availability and the supply chain constraints that many retailers also experienced during this time frame,” Isely said. “The strong financial performance in the first half of the fiscal year and our expectations for the second half of the fiscal year give us confidence in raising our fiscal year 2022 outlook.”
Based on its year-to-date performance, the retailer is raising comparable-store sales growth and diluted-earnings-per-share outlook for the fiscal year. Natural Grocers now anticipates opening four to five new stores this fiscal year, relocating or remodeling two stores, and spending $28 million to $35 million in capital expenditures.