Natural Grocers by Vitamin Cottage (NGVC) investor relations material

Executive summary

• Net sales for Q3 FY2026 rose 1.8% year-over-year to $334.7 million, with daily average comparable store sales up 1.2% and strong performance in produce, dairy, and meat categories.

• Net income for Q3 FY2026 was $11.1 million ($0.48 diluted EPS), down from $11.6 million ($0.50 diluted EPS) in Q3 FY2025; nine-month net income was $35.8 million, up 3.5%.

• Six new stores opened fiscal year-to-date, including three in Q3 and two after quarter-end, with all new stores among the strongest opening day sales.

• Continued strong membership gains in the {N}power Rewards program, with penetration rising to 84%.

• Recognized as 2026 Sustainability Retailer of the Year by Produce Business.

Financial highlights

• Gross margin for Q3 FY2026 was 29.3%, down from 29.9% year-over-year, impacted by lower product margin, higher inventory shrink, and increased freight costs.

• Adjusted EBITDA for Q3 FY2026 was $22.5 million, down 7.6% year-over-year, including a $2 million business interruption insurance recovery gain.

• Store expenses as a percentage of net sales decreased by 20 basis points due to expense management.

• Free cash flow for the first nine months was $14.8 million, with $55.1 million cash from operations and $40.3 million in net capital expenditures.

• Cash and cash equivalents at quarter-end were $17.5 million; no outstanding borrowings on the credit facility.

Outlook and guidance

• FY2026 guidance updated: 6–7 new stores, 2 relocations/remodels, daily average comparable store sales growth of 1.5%–2.0%, and diluted EPS of $2.07–$2.11.

• Capital expenditures expected at $45–$50 million.

• Q4 will have one fewer selling day due to Labor Day closure, with most sales expected to shift to adjacent days.

• Confident in liquidity position to fund operations, growth, dividends, and share repurchases.

• Targeting annual new store unit growth rate of 4% to 5% for the foreseeable future.