Natural Grocers by Vitamin Cottage, Inc. Q3 FY2024 earnings call

• Third quarter financial results included record sales, operating margin expansion, and diluted earnings per share growth.
• 7.2% daily average comparable store sales growth, with 4.7% transaction count increase and 2.4% transaction size increase, second consecutive quarter with items count growth.
• Operating margin improved by 100 basis points, diluted earnings per share up 29%.
• {N}power Rewards program net sales penetration at 80% in third quarter, up from 77% a year ago.
• Launched 33 new Natural Grocers brand items, including a certified organic and gluten-free cereal line.
• Relocated one Oklahoma City store, completed remodels of Temple, Texas and Independence, Missouri stores; opened new store in Incline Village, Nevada.

In the third quarter, net sales increased 9.7% to $309.1 million. Daily average comparable store sales grew 7.2%, driven by a 4.7% increase in transaction count and 2.4% increase in transaction size. Branded products accounted for 8.5% of total sales, up from 7.6% a year ago. Approximately 98% of sales occur in-store, with online sales relatively stable post-pandemic and now margin neutral compared to in-store margin. In-store sales drove fiscal 2024 sales growth, comparable store sales growth, and margin expansion.

• Raised fiscal 2024 guidance for comparable store sales growth (6%-7%) and diluted earnings per share ($1.27-$1.34).
• Opened 4 new stores, relocate or remodel 5 stores.
• Capital expenditures directed between $35 million and $39 million to support growth initiatives.

Certain information contains forward-looking statements subject to risks and uncertainties detailed in the company's most recently filed Forms 10-Q and 10-K. Actual results could differ materially from forward-looking statements due to various factors.