Dive Brief:
- Natural Grocers reported strong first-quarter earnings to kick off 2025, with net sales increasing 9.4%, to $330.2 million, and comparable store sales rising nearly 9%, the specialty grocer said Thursday.
- Private label was a key driver in the specialty grocer’s earnings, accounting for almost 9% of total sales, helped in part by the launch of 23 new store brand items.
- Natural Grocers has increased its fiscal 2025 outlook based on the “strong start to our fiscal year,” Chief Financial Officer Richard Halle said during the grocer’s call with investors.
Dive Insight:
Natural Grocer’s strong Q1 results continue an upward trend for the grocer, marking its eighth consecutive quarter of positive customer traffic comps and fourth consecutive quarter with increases in both items per basket and modest inflation, Halle told investors.
Co-President Kemper Isely credited these results to a “continuation of the positive trends” Natural Grocers has experienced over the past two years, including broad-based growth across product categories and geographic regions.
“Comparable store sales growth has remained balanced between transaction counts, transaction size and items per basket,” Isely said. “We believe that many of our performance metrics are among the highest in grocery retail.”
Halle, who took over as the specialty grocer’s chief financial officer Jan. 1, noted that the grocer’s daily average comparable transaction count increased 5.3% in Q1. In addition, transaction size comp included an uptick in items per basket by approximately 2 percentage points.
Along with private label growth, Natural Grocer’s {N}power rewards program was a key contributor to its Q1 performance. Net sales penetration of the rewards program reached 81%, up from 78% a year ago, according to Isley.
“We believe our growth in fiscal 2025 and beyond will benefit from our close alignment with consumer trends, strong customer engagement through our {N}power rewards program, expansion of the Natural Grocers brand products, new store development and driving existing store productivity,” Isley said during the earnings call.
Looking ahead, Natural Grocers is increasing its fiscal 2025 outlook for daily average comparable store sales growth and diluted earnings per share, according to Halle. The revised outlook also includes opening four to six new stores and a daily average comparable store sales growth between 5% and 7%.
