Why Natural Grocers by Vitamin Cottage Stock Popped Today

Shares of Natural Grocers by Vitamin Cottage (NGVC 15.80%) soared 15.8% today after the organic grocery chain delivered strong quarterly results.

The sources of Natural Grocers’ massive earnings beat

For its fiscal first-quarter 2024 ended Dec. 31, 2023, Natural Grocers’ net sales grew 7.6% year over year to $301.8 million, including a 6.2% increase in daily-average comparable-store sales. Net income climbed nearly 80% to $0.34 per share — trouncing expectations for earnings of $0.19 per share — helped by a combination of sales growth, pricing initiatives, and effective operating-expense management.

“Our differentiated offering of carefully vetted natural and organic products, and compelling value proposition, continue to resonate with today’s health-conscious consumers and distinguish us in the marketplace,” stated Natural Grocers Co-President Kemper Isley.

What’s next for Natural Grocers stock?

For the full fiscal-year 2024, Natural Grocers also raised its outlook to call for daily-average comparable-store sales growth of 3% to 5% (up from 2% to 4% growth previously), which should translate to full-year earnings per share of $1.02 to $1.12 (increased from prior guidance for a range of $1 to $1.10). Natural Grocers continues to expect to open four to six new stores this fiscal year, while remodeling or relocating four to six existing locations.

In the end, this was a straightforward beat-and-raise performance that left little room for bearish traders to argue. Even with shares of Natural Grocers up more than 40% in the year leading up to this report, the stock is understandably rallying in response.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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