Natural Grocers by Vitamin Cottage on Thursday reported a slight dip in comparable store sales and a heavy drop in net earnings during its fiscal first quarter.
The Lakewood, Colo.-based natural foods retailer said net sales for the period, which ended Dec. 31, totaled $183.6 million, a 9.4% increase driven by new stores. Comparable-store sales fell by 0.6%, driven by a 0.8% drop in store traffic and a 0.2% increase in average basket size. The company’s mature stores — those opened on or before fiscal 2012 — saw comps drop by 2.3% in the quarter.
Net earnings of $2.1 million dropped 45% from the same period a year ago, when comps improved by 3.6% and provided additional leverage on fixed costs, officials said. Earnings per share of 9 cents came in below analyst estimates of 14 cents, while comp sales were within the chain’s 1% to -1% expected range.
Store expenses during the quarter increased $5.9 million, or 16.6%, to $41.8 million. As a percentage of sales, store expenses increased approximately 140 basis points to 22.8%, primarily due to higher labor costs as a percentage of sales as well as the de-leveraging of other store expenses as a result of the decline in comparable store sales.
“As anticipated, comparable store sales trends and margins remained under pressure during the first quarter,” Kemper Isely, co-president, said in a release. "However, we are pleased with our nutrition education investments centered around our nutrient-to-know-about initiatives, which contributed to positive comparable store sales growth in supplements and supported our favorable product margin performance during the quarter. Additionally, we were able to manage our cash flow to maintain our capital spending below the amount of cash provided by operations.”