Natural Grocers is a 150-plus store chain that sells organic foods and supplements, with almost all of its stores located west of the Mississippi. Unlike some competitors, such as Sprouts or Whole Foods Markets, Natural Grocers devotes a much larger percentage of store square footage to supplement sales, reflecting its roots. The company, which went public in 2012, was founded as Vitamin Cottage in Lakewood, CO more than 60 years ago.
The company reported $258.6 million in net sales, which was a 2.4% decrease compared to the same period a year ago, but still represented a significant gain from the third quarter of 2019, when the company brought in $224.4 million. Comparable store sales were down by 3.6% compared to the third quarter of 2020. But that quarter itself saw a 15.5% sales increase over the third quarter of 2019.
But while the sales of meat, dairy and other products moderated from the frenzied buying pace of 2020, supplement sales continued to ramp up. Natural Grocers reported a 6.2% year over year rise in supplement sales.
Private label launch
A key part of its supplement strategy was the launch of a line of Natural Grovers private label supplements which were reintroduced earlier this year. The line continues to expand, said Kemper Isley, Natural Grocers CEO.
“The relaunch of our private brand supplements that began in March grew in the third quarter to include a comprehensive range of over 115 vitamins, herbs, minerals, and precision formulas. Our branded supplements are made from high quality ingredients. Our good manufacturing practice is certified and affordably priced. Additional branded supplements are under development and we expect to have approximately 150 SKUs at the completion of the initial rollout, we plan to further expand the number of SKUs over the coming years,” Isley told stock analysts during an earnings call. The call was posted in transcript form on the site seekingalpha.com.
Fro a number of years Natural Grocers had pursued a strategy of opening new stores at a frenetic pace. That tempo had slowed prior to the pandemic, during which it slowed even further because of labor shortages and supply chain problems. For the coming year, the company said it expects to open three new stores and remodel or relocate four or five more.
Natural Grocers stock sells for about $11.70 today, which is down from the 52-week high of $18.07 and well below the stock’s all time high of almost $44, which was achieved in 2014.