Revenue and profitability
- Net sales: $309.1 million, up 9.7% YoY; QoQ growth 0.3% (per quarterly commentary).
- Gross profit: $82.7 million; gross margin 26.7% (calculated as 82.7 / 309.1). This aligns with a modest YoY margin level and reflects product-cost inflation dynamics and mix effects.
- Operating income: $12.8 million; operating margin 4.16%. QoQ and YoY margin progression driven by occupancy leverage and efficiency gains, partially offset by higher store labor costs.
- EBITDA: $21.37 million; EBITDA leverage supported by store-level improvements.
- Net income: $9.21 million; diluted EPS: $0.40; net income margin approximately 2.98%.
- Key profitability drivers: occupancy leverage contributed to margin resilience; annualized cost inflation was modest at about 1% in Q3; higher labor costs offset by increased sales and efficiency.
Growth and efficiency indicators
- Comparable store sales growth: daily average +7.2% in Q3, with a 4.7% increase in transactions and a 2.4% increase in average basket size. Items per basket increased for the quarter, with broad strength across major categories (meat, dairy, produce).
- Customer metrics: six straight quarters of positive traffic; in-store focus remains the primary driver of growth; online sales remain margin neutral relative to in-store margins.
- Private-label and branding: Natural Grocers branded products accounted for 8.5% of total sales, up from 7.6% YoY; 33 new NG brand items launched in the quarter.
Balance sheet and cash flow
- Cash and equivalents: $13.9 million; total debt outstanding: $364.7 million; net debt: $350.8 million.
- Liquidity and leverage: current ratio 0.96, quick ratio 0.18, cash ratio 0.09, signaling modest near-term liquidity with a meaningful net debt position given the capital-light store expansion model.
- Cash flow: net cash provided by operating activities $12.4 million; capital expenditures $9.3 million; free cash flow ≈ $3.1 million; nine-month cash flow from operations was $49.3 million, with $31.8 million invested in capex.
- Balance sheet health: total assets $654.4 million; total liabilities $486.6 million; total stockholders’ equity $167.8 million. Long-term debt stands at $323.2 million, with total debt to capitalization around 68.5%.
Outlook and guidance
- Updated guidance for FY2024: daily average comparable store sales growth of 6%–7%; diluted EPS between $1.27 and $1.34; capital expenditures of $35–$39 million; four new stores opened and five stores relocated/remodeled.
- Strategic emphasis: continued growth through store openings, remodeling, and the scaling of the NG power rewards program; emphasis on privately branded products and a compelling value proposition to drive in-store traffic and basket growth.
- Debt and capital allocation: capital deployment focused on store growth, with a measured approach to capex relative to cash flow generation; the company remains mindful of margins given cost inflation and mix shifts.