Natural Grocers by Vitamin Cottage on Thursday said it expected to build fewer new stores — and post modest same-store sales — in its new fiscal year.
That news came as the Lakewood, Colo.-based natural foods retailer said earnings were down by 49.3% in its fiscal fourth quarter citing in part higher expenses associated with new stores, and a modest 0.3% comp-store sales gain.
“We continued to execute our core strategies during the fourth quarter while navigating the evolving food retailing environment," Kemper Isely, co-president, said in a statement. "Our growth strategy resulted in the opening of 23 new stores, the relocation of four stores and the remodel of one store during fiscal 2016. As we enter fiscal 2017, we remain focused on our expanded sales initiatives and aggressively controlling costs, while leveraging our founding principles to ensure we are providing our customers a superior solution for healthy, natural and nutritious food shopping."
For the quarter, which ended Sept. 30, the natural foods retailer said sales grew by 11.5% to $181 million on the strength of new stores. Comps were slightly above analyst estimates of flat.
Net income of $1.5 million was down 49.3% from the same period last year, as the retailer said higher store expenses including employee, occupancy and shrink costs for new stores outweighed product margin gains. Comparable sales at “mature” stores also slowed to -1.8% in the period, the company said.
For the fiscal year Natural Grocers posted sales of $705 million, a 12.9% increase, with comps growing by 1.7%.
The company’s fiscal 2017 guidance called fewer new stores in 2017 — 15 to 20 vs. 23 in fiscal 2016 and previous expectations of 19 to 23 new units. Comparable store sales are expected in the range of -1% to 1%.
