NGVC · Natural Grocers by Vitamin Cottage, Inc.

Natural Grocers by Vitamin Cottage delivered modest top-line growth in Q2 fiscal 2026, with net sales up 0.5% to $337.4 million, driven by a $1.7 million increase in comparable store sales and $1.1 million from new stores, offset by closed store impacts. Daily average comparable sales rose 0.5%, reflecting a 1.6% higher transaction size despite a 1.1% drop in transaction count. Gross margin improved 10 basis points to 30.4%, supported by lower store occupancy costs as a percentage of sales. Store expenses declined 1.6% to $71.6 million (21.2% of sales vs 21.7% prior year), highlighting effective expense management. Administrative expenses rose 10% to $12.1 million due to technology investments, yet operating income grew 3.1% to $18.1 million (5.4% margin). Net income increased to $13.4 million, with diluted EPS at $0.58. For the first half, sales grew 1.0% to $673.0 million, operating income up 6.0%, though gross margin dipped to 29.9% from higher inventory shrink. Adjusted EBITDA rose 4.0% to $27.4 million in Q2 and 3.7% to $50.9 million YTD. Balance sheet remains solid with $20.7 million cash, no revolver borrowings, and strong operating cash flow of $43.8 million funding $30.3 million capex. Management emphasized strong execution in a challenging environment, consumer health trends, and affordable pricing strategy. The company opened one new store in Q2, ending with 169 stores, and added two more post-quarter. Dividend of $0.15 per share was declared. Refined FY2026 guidance narrows comparable sales to 1.5%-2.5% and capex to $45-50 million, with EPS $2.07-2.15, signaling confidence amid tempered expectations.