Natural Grocers by Vitamin Cottage Announces Second Quarter Fiscal 2026 Results

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Natural Grocers by Vitamin Cottage, Inc.

May 07, 2026, 16:10 ET

LAKEWOOD, Colo., May 7, 2026 /PRNewswire/ -- Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) today announced results for its second quarter of fiscal 2026 ended March 31, 2026.

Highlights for Second Quarter Fiscal 2026 Compared to Second Quarter Fiscal 2025

Net sales increased 0.5% to $337.4 million;
Daily average comparable store sales increased 0.5%, and 9.4% on a two-year basis;
Net income increased 2.5% to $13.4 million, with diluted earnings per share of $0.58;
Adjusted EBITDA increased 4.0% to $27.4 million; and
Opened one new store.

"We performed well in a challenging environment, delivering earnings growth through strong store‑level execution and disciplined expense management," said Kemper Isely, Co-President. "We believe that consumer prioritization of health and wellness, including food and nutrition, is growing and enduring. Our differentiated natural and organic offering, supported by rigorous standards and our Always Affordable^SM pricing strategy, continues to deliver strong value and reinforces our competitive positioning."

In addition to presenting the financial results of Natural Grocers by Vitamin Cottage, Inc. and its subsidiaries (collectively, the Company) in conformity with U.S. generally accepted accounting principles (GAAP), the Company is also presenting EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. The reconciliation from GAAP to these non-GAAP financial measures is provided at the end of this earnings release.

Operating Results — Second Quarter Fiscal 2026 Compared to Second Quarter Fiscal 2025

Net sales during the second quarter of fiscal 2026 increased $1.6 million, or 0.5%, to $337.4 million, compared to the second quarter of fiscal 2025, due to a $1.7 million increase in comparable store sales and a $1.1 million increase in new store sales, partially offset by a $1.1 million decrease in net sales related to closed stores. Daily average comparable store sales increased 0.5% in the second quarter of fiscal 2026, comprised of a 1.6% increase in daily average transaction size and a 1.1% decrease in daily average transaction count.

Gross profit during the second quarter of fiscal 2026 increased $0.7 million to $102.4 million. Gross profit reflects earnings after product and store occupancy costs. Gross margin increased by 10 basis points to 30.4% during the second quarter of fiscal 2026, compared to 30.3% in the second quarter of fiscal 2025. The increase in gross margin was driven by lower store occupancy costs as a percentage of net sales.

Store expenses during the second quarter of fiscal 2026 decreased 1.6% to $71.6 million, primarily driven by expense management. Store expenses as a percentage of net sales were 21.2% during the second quarter of fiscal 2026, down from 21.7% in the second quarter of fiscal 2025.

Administrative expenses during the second quarter of fiscal 2026 increased 10.0% to $12.1 million, primarily driven by higher technology expenses. Administrative expenses as a percentage of net sales were 3.6% in the second quarter of fiscal 2026, up from 3.3% in the second quarter of fiscal 2025.

Operating income for the second quarter of fiscal 2026 increased 3.1% to $18.1 million. Operating margin during the second quarter of fiscal 2026 was 5.4%, up from 5.2% in the second quarter of fiscal 2025.

Net income for the second quarter of fiscal 2026 was $13.4 million, or $0.58 diluted earnings per share, compared to net income of $13.1 million, or $0.56 diluted earnings per share, for the second quarter of fiscal 2025.

Adjusted EBITDA for the second quarter of fiscal 2026 was $27.4 million, compared to $26.3 million in the second quarter of fiscal 2025.

Operating Results — First Six Months Fiscal 2026 Compared to First Six Months Fiscal 2025

During the first six months of fiscal 2026, net sales increased $7.0 million, or 1.0%, to $673.0 million, compared to the first six months of fiscal 2025, due to a $7.4 million increase in comparable store sales and a $3.5 million increase in new store sales, partially offset by a $3.9 million decrease in net sales related to closed stores. Daily average comparable store sales increased 1.1% in the first six months of fiscal 2026, primarily driven by an increase in daily average transaction size.

Gross profit during the first six months of fiscal 2026 increased $0.7 million, or 0.4%, to $201.3 million, compared to $200.6 million in the first six months of fiscal 2025. Gross profit reflects earnings after product and store occupancy costs. Gross margin decreased to 29.9% during the first six months of fiscal 2026, compared to 30.1% in the first six months of fiscal 2025. The decrease in gross margin was driven by lower product margin primarily due to higher inventory shrink in the first quarter of fiscal 2026.

Store expenses during the first six months of fiscal 2026 decreased 1.2% to $144.6 million, primarily driven by expense management. Store expenses as a percentage of net sales were 21.5% during the first six months of fiscal 2026, down from 22.0% in the first six months of fiscal 2025.

Administrative expenses during the first six months of fiscal 2026 increased 1.9% to $23.0 million, primarily driven by higher technology expenses partially offset by lower compensation expenses. Administrative expenses as a percentage of net sales were 3.4% in each of the first six months of fiscal 2026 and fiscal 2025.

Operating income for the first six months of fiscal 2026 increased 6.0% to $32.8 million. Operating margin during the first six months of fiscal 2026 was 4.9%, compared to 4.6% in the first six months of fiscal 2025.

Net income for the first six months of fiscal 2026 was $24.8 million, or $1.07 diluted earnings per share, compared to net income of $23.0 million, or $0.99 diluted earnings per share, for the first six months of fiscal 2025.

Adjusted EBITDA for the first six months of fiscal 2026 was $50.9 million, compared to $49.1 million in the first six months of fiscal 2025.

Balance Sheet and Cash Flow

As of March 31, 2026, the Company had $20.7 million in cash and cash equivalents and no outstanding borrowings on its $70.0 million revolving credit facility.

During the first six months of fiscal 2026, the Company generated $43.8 million in cash from operations and invested $30.3 million in net capital expenditures, primarily for new and relocated/remodeled stores and real property acquisitions.

Dividend Announcement

Today, the Company announced the declaration of a quarterly cash dividend of $0.15 per common share. The dividend will be paid on June 3, 2026 to stockholders of record at the close of business on May 18, 2026.

Growth and Development

During the second quarter of fiscal 2026, the Company opened one new store. The Company ended the second quarter with 169 stores in 21 states. Since March 31, 2026, the Company relocated one existing store and opened one new store.

Fiscal 2026 Outlook

The Company is refining its fiscal 2026 outlook:

Fiscal 2026	Prior Outlook	Updated Outlook
Number of new stores	6 to 8	6 to 8
Number of relocations/remodels	2 to 3	2 to 3
Daily average comparable store sales growth	1.5% to 4.0%	1.5% to 2.5%
Diluted earnings per share	$2.00 to $2.15	$2.07 to $2.15

Capital expenditures (in millions)	$50 to $55	$45 to $50

Earnings Conference Call

The Company will host a conference call today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time) to discuss this earnings release. The dial-in number is 1-888-347-6606 (US) or 1-412-902-4289 (International). The conference ID is "Natural Grocers Q2 FY 2026 Earnings Call." A simultaneous audio webcast will be available at http://Investors.NaturalGrocers.com and archived for a minimum of 20 days.

About Natural Grocers by Vitamin Cottage

Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) is an expanding specialty retailer of natural and organic groceries, body care products and dietary supplements. The grocery products sold by Natural Grocers must meet strict quality guidelines and may not contain artificial flavors, preservatives, or sweeteners (as defined in its standards), synthetic colors, or partially hydrogenated or hydrogenated oils. The Company sells only USDA certified organic produce and exclusively pasture-raised, non-confinement dairy products, and free-range eggs. Natural Grocers' flexible smaller-store format allows it to offer affordable prices in a shopper-friendly, clean and convenient retail environment. The Company also provides extensive free science-based nutrition education programs to help customers make informed health and nutrition choices. The Company, founded in 1955, has 170 stores in 21 states.

Visit www.NaturalGrocers.com for more information and store locations.

Forward-Looking Statements

The following constitutes a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995. Except for the historical information contained herein, statements in this release are "forward-looking statements" and are based on management's current expectations and are subject to uncertainty and changes in circumstances. All statements that are not statements of historical fact are forward-looking statements. Actual results could differ materially from these expectations due to changes in global, national, regional or local political, economic, inflationary, disinflationary, recessionary, business, interest rate, labor market, competitive, market, regulatory, trade policy, supply chain and other factors, and other risks detailed in the Company's Annual Report on Form 10-K and the Company's subsequent quarterly reports on Form 10-Q. The information contained herein speaks only as of the date of this release and the Company undertakes no obligation to publicly update forward-looking statements, except as may be required by the securities laws.

For further information regarding risks and uncertainties associated with the Company's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Form 10-K and the Company's subsequent quarterly reports on Form 10-Q, copies of which may be obtained by contacting Investor Relations at 303-986-4600 or by visiting the Company's website at http://Investors.NaturalGrocers.com.

Investor Contact:

Reed Anderson, ICR, 646-277-1260, [email protected]

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

Consolidated Statements of Income (Unaudited) *(Dollars in thousands, except per share data)*

	Three months ended March 31,			Six months ended March 31,
	2026		2025	2026	2025
Net sales	$	337,376	335,769	672,955	665,990
Cost of goods sold and occupancy costs	234,933		234,021	471,653	465,418
Gross profit	102,443		101,748	201,302	200,572
Store expenses	71,573		72,755	144,582	146,281
Administrative expenses	12,125		11,023	22,960	22,537
Pre-opening expenses	640		417	1,008	853
Operating income	18,105		17,553	32,752	30,901
Interest expense, net	(632)		(750)	(1,345)	(1,673)
Income before income taxes	17,473		16,803	31,407	29,228
Provision for income taxes	(4,039)		(3,702)	(6,639)	(6,189)
Net income	$	13,434	13,101	24,768	23,039

Net income per share of common stock:
Basic	$	0.58	0.57	1.08	1.01
Diluted	$	0.58	0.56	1.07	0.99
Weighted average number of shares of common stock outstanding:
Basic	23,035,242		22,935,698	23,021,642	22,919,457
Diluted	23,215,112		23,273,700	23,234,930	23,215,633

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

Consolidated Balance Sheets (Unaudited) *(Dollars in thousands, except per share data)*

	March 31, 2026		September 30, 2025
Assets
Current assets:
Cash and cash equivalents	$	20,723	17,116
Accounts receivable, net	13,095		11,966
Merchandise inventory	129,686		132,968
Prepaid expenses and other current assets	7,052		6,025
Total current assets	170,556		168,075
Property and equipment, net	204,220		182,741
Other assets:
Operating lease assets, net	253,194		259,586
Finance lease assets, net	39,839		42,895
Other assets	5,569		5,452
Goodwill and other intangible assets, net	11,323		11,755
Total other assets	309,925		319,688
Total assets	$	684,701	670,504

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	89,640	80,991
Accrued expenses	31,355		37,236
Operating lease obligations, current portion	37,336		36,495
Finance lease obligations, current portion	4,149		4,061
Total current liabilities	162,480		158,783
Long-term liabilities:
Co-PACE Financing	1,451		—
Operating lease obligations, net of current portion	238,982		245,803
Finance lease obligations, net of current portion	42,604		45,660
Deferred income tax liabilities, net	8,289		7,863
Total long-term liabilities	291,326		299,326
Total liabilities	453,806		458,109
Stockholders' equity:
Common stock, $0.001 par value, 50,000,000 shares authorized, 23,040,786 and 22,954,712 shares issued and outstanding at March 31, 2026 and September 30, 2025, respectively	23		23
Additional paid-in capital	63,675		63,033
Retained earnings	167,197		149,339
Total stockholders' equity	230,895		212,395
Total liabilities and stockholders' equity	$	684,701	670,504

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

Consolidated Statements of Cash Flows (Unaudited) *(Dollars in thousands)*

	Six months ended March 31,
	2026		2025
Operating activities:
Net income	$	24,768	23,039
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	16,124		15,838
Loss on impairment of long-lived assets and store closing costs	21		81
(Gain) loss on disposal of property and equipment	(13)		15
Share-based compensation	1,802		2,257
Deferred income tax expense (benefit)	426		(1,800)
Non-cash interest expense	3		2
Other	156		1
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable, net	(696)		(368)
Merchandise inventory	3,282		(4,102)
Prepaid expenses and other assets	(276)		(2,217)
Income tax receivable	(1,006)		—
Operating lease assets	17,203		16,787
(Decrease) increase in:
Operating lease liabilities	(17,232)		(16,974)
Accounts payable	5,158		4,650
Accrued expenses	(5,881)		(465)
Net cash provided by operating activities	43,839		36,744
Investing activities:
Acquisition of property and equipment	(29,928)		(16,040)
Acquisition of other intangibles	(454)		(152)
Proceeds from sale of property and equipment	17		44
Proceeds from property insurance settlements	22		268
Net cash used in investing activities	(30,343)		(15,880)
Financing activities:
Borrowings under revolving loans	321,300		314,200
Repayments under revolving loans	(321,300)		(314,200)
Finance lease obligation payments	(1,819)		(1,951)
Dividends to shareholders	(6,910)		(5,500)
Payments on withholding tax for restricted stock unit vesting	(1,160)		(1,075)
Net cash used in financing activities	(9,889)		(8,526)
Net increase in cash and cash equivalents	3,607		12,338
Cash and cash equivalents, beginning of period	17,116		8,871
Cash and cash equivalents, end of period	$	20,723	21,209
Supplemental disclosures of cash flow information:
Cash paid for interest	$	346	721
Cash paid for interest on finance lease obligations, net of capitalized interest of $235 and $108, respectively	893		964
Income taxes paid	7,219		7,328
Supplemental disclosures of non-cash investing and financing activities:
Acquisition of property and equipment not yet paid	$	5,872	2,653
Lease assets obtained in exchange for new operating lease obligations		11,253	8,282
Lease assets obtained in exchange for new finance lease obligations		(32)	—
Building and land acquired in exchange for assumed Co-PACE Financing		1,343	—
Tenant lease intangibles acquired in exchange for assumed Co-PACE Financing		109	—

‌	NATURAL GROCERS BY VITAMIN COTTAGE, INC.

	Non-GAAP Financial Measures
	(Unaudited)

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP. We define EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA as adjusted to exclude the effects of certain income and expense items that management believes make it more difficult to assess the Company's actual operating performance, including certain items such as impairment charges, store closing costs, share-based compensation, amortization of SaaS implementation costs and non-recurring items.

The following table reconciles net income to EBITDA and Adjusted EBITDA, dollars in thousands:

	Three months ended March 31,			Six months ended March 31,
	2026		2025	2026	2025
Net income	$	13,434	13,101	24,768	23,039
Interest expense, net	632		750	1,345	1,673
Provision for income taxes	4,039		3,702	6,639	6,189
Depreciation and amortization	8,151		7,888	16,124	15,838
EBITDA		26,256	25,441	48,876	46,739
Impairment of long-lived assets and store closing costs		—	31	45	118
Share-based compensation		945	822	1,802	2,257
Amortization of SaaS implementation costs		150	1	153	1
Adjusted EBITDA	$	27,351	26,295	50,876	49,115

EBITDA increased 3.2% to $26.3 million for the three months ended March 31, 2026 compared to $25.4 million for the three months ended March 31, 2025. EBITDA increased 4.6% to $48.9 million for the six months ended March 31, 2026 compared to $46.7 million for the six months ended March 31, 2025. EBITDA as a percentage of net sales was 7.8% and 7.6% for the three months ended March 31, 2026 and 2025, respectively. EBITDA as a percentage of net sales was 7.3% and 7.0% for the six months ended March 31, 2026 and 2025, respectively.

Adjusted EBITDA increased 4.0% to $27.4 million for the three months ended March 31, 2026 compared to $26.3 million for the three months ended March 31, 2025. Adjusted EBITDA increased 3.6% to $50.9 million for the six months ended March 31, 2026 compared to $49.1 million for the six months ended March 31, 2025. Adjusted EBITDA as a percentage of net sales was 8.1% and 7.8% for the three months ended March 31, 2026 and 2025, respectively. Adjusted EBITDA as a percentage of net sales was 7.6% and 7.4% for the six months ended March 31, 2026 and 2025, respectively.

Management believes some investors' understanding of our performance is enhanced by including EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. We believe EBITDA and Adjusted EBITDA provide additional information about: (i) our operating performance, because they assist us in comparing the operating performance of our stores on a consistent basis, as they remove the impact of non-cash depreciation and amortization expense as well as items not directly resulting from our core operations, such as interest expense and income taxes and (ii) our performance and the effectiveness of our operational strategies. Additionally, EBITDA is a component of a measure in our financial covenants under our credit facility.

Furthermore, management believes some investors use EBITDA and Adjusted EBITDA as supplemental measures to evaluate the overall operating performance of companies in our industry. Management believes that some investors' understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. By providing these non-GAAP financial measures, together with a reconciliation from net income, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.

Our competitors may define EBITDA and Adjusted EBITDA differently, and as a result, our measures of EBITDA and Adjusted EBITDA may not be directly comparable to EBITDA and Adjusted EBITDA of other companies. Items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing financial performance. EBITDA and Adjusted EBITDA are supplemental measures of operating performance that do not represent and should not be considered in isolation or as an alternative to, or substitute for, net income or other financial statement data presented in the consolidated financial statements as indicators of financial performance. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of the limitations are:

EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
EBITDA and Adjusted EBITDA do not reflect any depreciation or interest expense for leases classified as finance leases;
EBITDA and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
Adjusted EBITDA does not reflect share-based compensation, impairment of long-lived assets, store closing costs and amortization of SaaS implementation costs;
EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes; and
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements.

Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA as supplemental information.

SOURCE Natural Grocers by Vitamin Cottage, Inc.