Natural Grocers by Vitamin Cottage Inc (NGVC) 2024 Q1 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Natural Grocers first-quarter fiscal year 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time.

美好的一天，女士們先生們。歡迎參加 Natural Grocers 2024 財年第一季財報電話會議。此時，所有參與者都處於只聽模式。稍後我們會進行問答環節，屆時會做出指示。

As a reminder, today's call is being recorded. I would now like to turn the conference over to Ms. Jessica Thiessen, Vice President and Treasurer for Natural Grocers. Ms. Thiessen, you begin.

提醒一下，今天的通話正在錄音。我現在將會議交給 Natural Grocers 副總裁兼財務長 Jessica Thiessen 女士。蒂森女士，你開始吧。

Good afternoon, and thank you for joining us for the Natural Grocers by Vitamin Cottage first-quarter fiscal year 2024 earnings conference call. On the call with me today are Kemper Isely, Co-President; and Todd Dissinger, Chief Financial Officer.

下午好，感謝您參加我們的 Natural Grocers by Vitamin Cottage 2024 財年第一季財報電話會議。今天與我通話的是聯合總裁肯珀‧伊斯利 (Kemper Isely)；托德‧迪辛格 (Todd Dissinger)，財務長。

As a reminder, certain information provided during this conference call are forward-looking statements based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from those described in the forward-looking statements due to a variety of factors, including the risks and uncertainties detailed in the company's most recently filed Forms 10-Q and 10-K. The company undertakes no obligation to update forward-looking statements.

提醒一下，本次電話會議期間提供的某些資訊是基於當前預期和假設的前瞻性陳述，並受到風險和不確定性的影響。由於多種因素，包括公司最近提交的表格 10-Q 和 10-K 中詳述的風險和不確定性，實際結果可能與前瞻性陳述中描述的結果有重大差異。該公司不承擔更新前瞻性陳述的義務。

Today's press release is available on the company's website, and the recording of this call will be available on the website at investors.naturalgrocers.com. Now I will turn the call over to Kemper.

今天的新聞稿可在公司網站上查看，本次電話會議的錄音將在 Investors.naturalgrocers.com 網站上提供。現在我將把電話轉給肯珀。

Thank you, Jessica, and good afternoon, everyone. Today, I will highlight our first-quarter financial results, including key drivers and provide an update on priorities. Then Todd will discuss the first-quarter results in greater detail and review our updated fiscal year 2024 guidance.

謝謝你，潔西卡，大家下午好。今天，我將重點介紹我們第一季的財務業績，包括關鍵驅動因素，並提供優先事項的最新情況。然後托德將更詳細地討論第一季業績，並回顧我們更新的 2024 財年指導。

We are very pleased with our start to fiscal 2024. We believe our carefully vetted offering of natural and organic products, coupled with our emphasis on value and always affordable pricing, differentiate us in the marketplace and continue to drive demand with health-conscious consumers.

我們對 2024 財年的開局感到非常滿意。我們相信，我們提供的天然和有機產品經過仔細審查，加上我們對價值的重視和始終實惠的價格，使我們在市場上脫穎而出，並繼續推動注重健康的消費者的需求。

Our strong first-quarter results reflect a continuation of the positive trends we experienced in recent quarters. Net sales of $301.8 million increased 7.6% compared to the prior year, driven by a 6.2% increase in daily average comparable store sales, which included a 3.4% increase in transaction count.

我們強勁的第一季業績反映了我們最近幾季所經歷的正面趨勢的延續。淨銷售額為 3.018 億美元，較上年增長 7.6%，主要得益於每日平均可比商店銷售額增長 6.2%，其中交易數量增長 3.4%。

We are very encouraged by the strong customer traffic trends we have experienced over the past several quarters. Diluted earnings per share increased 78.9% to $0.34, reflecting strong sales growth, effective pricing and promotions and expense leverage.

我們對過去幾季所經歷的強勁客戶流量趨勢感到非常鼓舞。稀釋每股收益成長 78.9% 至 0.34 美元，反映出強勁的銷售成長、有效的定價和促銷以及費用槓桿。

Turning now to an update on key priorities. Our {N}power rewards program grew 16% year over year to more than 2.1 million members by the end of the first quarter. The {N}power net sales penetration was 78%, up from 76% a year ago. The growth in penetration of our {N}power rewards program reflects our deep engagement with these valuable customers.

現在轉向關鍵優先事項的最新情況。截至第一季末，我們的 {N}power 獎勵計劃年增 16%，會員數量超過 210 萬。{N}電力淨銷售滲透率為 78%，高於一年前的 76%。我們的{N}power獎勵計劃滲透率的成長反映了我們與這些有價值的客戶的深入互動。

Our Natural Grocers branded products deliver premium quality at compelling prices. In the first quarter, our branded products accounted for 8.5% of total sales, up from 7.9% a year ago. Our private brand penetration increase is an indication of our customers' appreciation for the quality and value of these products as well as the continued expansion of our offering.

我們的 Natural Grocers 品牌產品以極具競爭力的價格提供優質產品。第一季度，我們的品牌產品佔總銷售額的8.5%，高於去年同期的7.9%。我們自有品牌滲透率的提高表明客戶對這些產品的品質和價值以及我們產品的持續擴展的讚賞。

Store unit growth and development continues to be a priority for our company. During the first quarter, we opened stores in Twin Falls, Idaho; and Loveland, Colorado, and relocated one of our stores in Albuquerque. New Mexico. Store development timing continues to be impacted by delays in permitting and construction.

商店單位的成長和發展仍然是我們公司的首要任務。第一季度，我們在愛達荷州特溫福爾斯開設了商店；和科羅拉多州拉夫蘭，並搬遷了我們在阿爾伯克基的一家商店。新墨西哥。商店開發時間繼續受到許可和施工延誤的影響。

Earlier this week, we released our fiscal year 2023 environmental, social and governance report, reflecting our long-standing commitment to sustainability practices. We believe that our company's greatest opportunity to positively impact the environmental sustainability and human health is through offering over 20,000 high-quality natural and organic products at affordable prices. Examples of our strict standards include selling only certified organic properties, pasture-raised dairy, and free-range eggs.

本週早些時候，我們發布了 2023 財年環境、社會和治理報告，反映了我們對永續發展實踐的長期承諾。我們相信，我們公司對環境永續性和人類健康產生積極影響的最大機會是透過以實惠的價格提供 20,000 多種優質天然和有機產品。我們嚴格標準的例子包括僅銷售經過認證的有機產品、牧場飼養的乳製品和放養雞蛋。

In fiscal year 2023, the company's total sales was comprised of more than 50% organic products and 60% certified to environmental and/or social sustainability sourcing standards. We prioritize products sourced from vendors that embrace regenerative and sustainable agricultural practices, two of which are spotlighted in our ESG report.

2023 財年，該公司的總銷售額中超過 50% 是有機產品，60% 是經過環境和/或社會永續採購標準認證的產品。我們優先考慮來自採用再生和永續農業實踐的供應商的產品，其中兩個在我們的 ESG 報告中得到了重點關注。

Additionally, we make a substantial investment to provide free nutrition education to our customers, crew, and communities. Our company's ongoing financial success demonstrates that a business model dedicated to offering affordable, high-quality, natural, and organic products can help deliver positive environmental and social impacts while creating value for all of our stakeholders.

此外，我們還進行了大量投資，為我們的客戶、船員和社區提供免費的營養教育。我們公司持續的財務成功表明，致力於提供價格實惠、優質、天然和有機產品的商業模式可以幫助產生積極的環境和社會影響，同時為我們所有利益相關者創造價值。

In closing, I wanted to thank every member of our good4u crew for their commitment to operational excellence and exceptional customer service that were instrumental in driving our results. With that, I will turn our call over to Todd to discuss our financial results and guidance.

最後，我要感謝 Good4u 團隊的每一位成員，感謝他們對卓越營運和卓越客戶服務的承諾，這對推動我們取得成果發揮了重要作用。接下來，我將把我們的電話轉給托德，討論我們的財務表現和指導。

Thank you, Kemper, and good afternoon. For the first quarter, net sales increased 7.6% from the prior-year period to $301.8 million. Our daily average comparable store sales increase of 6.2% was comprised of a 3.4% increase in daily average transaction count and a 2.7% increase in daily average transaction size.

謝謝你，肯珀，下午好。第一季淨銷售額較上年同期成長 7.6%，達到 3.018 億美元。我們的每日均可比商店銷售額成長了 6.2%，其中每日平均交易數量增加了 3.4%，每日平均交易規模增加了 2.7%。

We estimate that product cost inflation was approximately 3% on an annualized basis for the first quarter, down 200 basis points from the previous quarter. The item count per basket was flat compared to the same period in the prior year, reflecting an improving trend over the past several quarters. Our item count per basket remains above pre-pandemic levels.

我們預計第一季產品成本通膨年率約為 3%，較上季下降 200 個基點。每個籃子的商品數量與去年同期相比持平，反映出過去幾季的改善趨勢。我們每個籃子的商品數量仍高於大流行前的水平。

Sales growth was broad-based across categories. Our strongest performing departments were meat, body care, and dairy. Gross margin increased 130 basis points to 29.4%, driven by higher product margin attributed to effective pricing and promotions and store occupancy expense leverage.

各類別的銷售成長基礎廣泛。我們表現最好的部門是肉類、身體護理和乳製品。有效的定價和促銷以及門市佔用費用槓桿帶來的產品利潤率提高，推動毛利率成長 130 個基點，達到 29.4%。

Store expenses increased 6.9% in the first quarter, primarily driven by higher compensation expense. Store expenses as a percentage of sales decreased 20 basis points, reflecting expense leverage as elevated sales offset higher labor costs.

第一季門市支出成長 6.9%，主要是因為薪資支出增加。門市費用佔銷售額的百分比下降了 20 個基點，反映出銷售額成長抵消了勞動成本上升所帶來的費用槓桿。

Administrative expenses as a percentage of sales increased 20 basis points, driven by higher compensation expense. Net income was $7.8 million with diluted earnings per share of $0.34 in the first quarter. This compares to net income of $4.4 million or $0.19 of diluted earnings per share in the first quarter of last year. Adjusted EBITDA was $18.8 million in the first quarter.

由於薪資費用增加，管理費用佔銷售額的百分比增加了 20 個基點。第一季淨利潤為 780 萬美元，稀釋後每股收益為 0.34 美元。相比之下，去年第一季的淨利潤為 440 萬美元，稀釋後每股收益為 0.19 美元。第一季調整後 EBITDA 為 1880 萬美元。

Turning to the balance sheet and cash flow, we ended the first quarter in a strong financial position, including $13.6 million of cash and cash equivalents. We had $18.4 million in outstanding borrowings on our $75 million revolving credit facility. During the first quarter, we generated cash from operations of $16.6 million and invested $11.8 million in net capital expenditures, primarily for new and relocated stores, resulting in free cash flow of $4.8 million.

談到資產負債表和現金流，我們第一季末的財務狀況強勁，包括 1,360 萬美元的現金和現金等價物。我們的 7,500 萬美元循環信貸額度中有 1,840 萬美元未償還借款。第一季度，我們從營運中產生了 1,660 萬美元的現金，並投資了 1,180 萬美元的淨資本支出，主要用於新店和搬遷商店，從而產生了 480 萬美元的自由現金流。

We are raising our fiscal 2024 guidance for daily average comparable store sales growth and diluted earnings per share. Our revised outlook includes the following: open four to six new stores, relocate or remodel four to six stores, achieve daily average comparable store sales growth between 3% and 5%, achieve diluted earnings per share between $1.02 and $1.12, and direct $30 million to $39 million towards capital expenditures to support our growth initiatives.

我們正在提高 2024 財年每日平均可比較商店銷售成長和稀釋每股盈餘的指導。我們修訂後的前景包括以下內容：開設四到六家新店，搬遷或改造四到六家商店，實現日均可比商店銷售額增長3%到5%之間，實現稀釋後每股收益1.02美元到1.12美元之間，以及直接3,000萬美元3,900 萬美元用於資本支出，以支持我們的成長計畫。

Our outlook reflects first-quarter results, operating trends, and the current economic environment. Our current expectation is that sales comps will be at the high end of our outlook range in the second quarter and will moderate in the second half of the year as we cycle stronger comps in the back half of fiscal 2023. Our outlook anticipates that year-over-year gross margin will be slightly higher in the second quarter and about flat in the second half of the year. Lastly, we expect store expenses as a percentage of sales to increase on a year-over-year basis, driven by higher labor rates, resulting in flat to modest expense deleverage.

我們的展望反映了第一季的業績、營運趨勢和當前的經濟環境。我們目前的預期是，第二季的銷售業績將達到我們預期範圍的高端，並且隨著我們在 2023 財年後半段循環使用更強勁的業績，下半年銷售業績將有所放緩。我們的展望預計第二季毛利率年比將略有上升，下半年毛利率將持平。最後，我們預計，在勞動成本上升的推動下，商店費用佔銷售額的百分比將同比增加，導致費用去槓桿化持平至適度。

In closing, we are pleased with the first-quarter results. We attribute our strong performance to the relevance of our differentiated business model, including the value proposition of high-quality products at always affordable prices. We continue to be encouraged by our recent operating trends, and we are confident in our ability to drive growth and enhance value for all stakeholders.

最後，我們對第一季的業績感到滿意。我們將強勁的業績歸功於我們差異化業務模式的相關性，包括以始終實惠的價格提供高品質產品的價值主張。我們最近的營運趨勢繼續令人鼓舞，我們對推動成長和為所有利害關係人提高價值的能力充滿信心。

With that, I would like to open the lines for questions. Thank you.

說到這裡，我想開始提問。謝謝。

We will now begin the question-and-answer session. (Operator Instructions) Scott Mushkin, R5 Capital.

我們現在開始問答環節。（操作員說明）Scott Mushkin，R5 Capital。

Hey, guys. Thanks for taking the questions. So I guess if I can think of -- I'm driving right now, believe it or not, out in stores. But I kind of have three questions for you. One is when we look at the gross margin, how much would you just attribute to the strong sales and leverage and how much would you attribute it to mix and other things?

大家好。感謝您提出問題。所以我想如果我能想到——不管你信不信，我現在正在開車去商店。但我想問你三個問題。一是當我們考慮毛利率時，您會將多少歸因於強勁的銷售和槓桿作用，以及將多少歸因於混合和其他因素？

Well, leverage gave us about 11 basis points, so that was nice. And then as far as mix goes, there really wasn't a lot of mix change. Everything was pretty much steady. There wasn't a lot to mix. A lot of our gain in margin was attributable to smart promotions and pulling back on some of our previous {N}power promotions.

嗯，槓桿給了我們大約 11 個基點，所以這很好。就混音而言，確實沒有太多混音變化。一切都非常穩定。沒有太多可混合的。我們的利潤成長很大程度上歸功於明智的促銷活動以及取消了之前的一些{N}強力促銷活動。

And was that preplanned or is that something --?

這是預先計劃好的還是什麼——？

We have been -- we're about cycling through a year's worth of that coming up here in January of having less aggressive {N}power promotions on certain items.

我們一直--我們打算在 1 月在這裡度過一年的時間，對某些商品進行不那麼激進的{N}強力促銷。

And then as far as your growth goes, I mean, obviously, it seems like you're striking a chord with the consumer, like to dive into that maybe next. But is there opportunities to increase that growth rate over the next two to three years on its stores? I know that's ramping up, but have you thought about increasing it further? Or where are you guys on that?

然後就你的成長而言，我的意思是，顯然，你似乎正在引起消費者的共鳴，接下來可能會深入探討這一點。但未來兩到三年是否有機會提高其門市的成長率？我知道這個數字正在增加，但你有沒有想過要進一步增加它？或者你們在哪裡？

You mean as far as store openings go?

你是說開店的狀況嗎？

Yeah.

是的。

Or just acquiring new customers at existing stores. Well, our goal per store opening's --

或只是在現有商店中獲取新客戶。嗯，我們每家店開幕的目標是--

Store opening remodels that you want -- yeah.

你想要的商店開業改造——是的。

Yeah, I mean, our goal this year, we are going to come in somewhere around 10 to 12 new stores and relocations and remodels. Over the next couple of years, our goal is to get back to opening between six and eight stores a year. We don't really want to go above that because we think that it's more profitable for us to open six to eight stores a year than to ramp up and open 10 to 12 stores a year or even more than that. It's smarter from a profitability standpoint to not much more growth than that per year. That way, you can spend better time picking your sites and managing those new stores as you open them.

是的，我的意思是，我們今年的目標是，我們將開設大約 10 到 12 家新店，並進行搬遷和改造。在接下來的幾年裡，我們的目標是恢復每年開設六到八家商店。我們真的不想超越這個數字，因為我們認為每年開設 6 到 8 家商店比每年開設 10 到 12 家甚至更多商店更有利可圖。從獲利能力的角度來看，每年的成長幅度不超過這一水準是更明智的做法。這樣，您就可以花更多的時間挑選地點並在新店開業時對其進行管理。

And the remodel part of it, is that --?

改造部分是——？

Yeah. And then the remodels, remodels and relocations will probably have an acceleration of that because we have a lot of stores that will be anniversarying their 10-year point in two years. And so a lot of those stores will be up for remodels and relocations at that point in time.

是的。然後改造、改建和搬遷可能會加速，因為我們有很多商店將在兩年內慶祝其成立 10 週年。因此，屆時許多商店將進行改造和搬遷。

Okay. And then I don't know if you threw that --

好的。然後我不知道你是否扔了它--

It's about a 10-year to 15-year life cycle before a store needs a remodel or facelift.

商店需要改造或翻新之前，大約需要 10 年到 15 年的生命週期。

Right. So that you think being a couple of years, that should -- it's going to accelerate pretty meaningfully. I think our research showed that too.

正確的。所以你認為幾年後，這應該會顯著加速。我認為我們的研究也顯示了這一點。

Yeah, it will happen. Yeah.

是的，它會發生。是的。

Right. And then did you reference M&A? Is that something you guys would consider or not really?

正確的。然後你有提到併購了嗎？你們真的會考慮嗎？

We haven't really found that to be a good niche for us. The most -- we did one acquisition of one store a few years back. And that really didn't -- I mean, it was all right for us, but it wasn't anything -- it was a lot more painful than we would have liked it to be hugely.

我們還沒有真正發現這對我們來說是一個好的利基市場。最多的是──幾年前我們收購了一家商店。這確實不是——我的意思是，這對我們來說沒什麼問題，但沒什麼問題——這比我們希望的要痛苦得多。

Yeah, it usually is. So my last question really gets into -- you seem to be getting new customers. Is that correct that you are getting new customers?

是的，通常是這樣。所以我的最後一個問題確實涉及到——你們似乎正在吸引新客戶。您正在獲得新客戶，這是正確的嗎？

Yeah, I mean, our customer growth was -- I mean, essentially our basket growth that equals inflation and our customer growth was about 3.5% above that.

是的，我的意思是，我們的客戶成長基本上等於通貨膨脹，而我們的客戶成長大約比通膨高出 3.5%。

What do you -- I mean that's -- what's driving that? I mean, it's kind of maybe a silly thing to say is are you guys the other side of the diet pill craze where people now have extra money? And they can -- or minding what they eat? I mean, it seems like we're seeing this acceleration. You're winning customers.

你是什​​麼意思——我的意思是——是什麼推動了這一點？我的意思是，這可能是一件愚蠢的事情，你們是減肥藥熱潮的另一面，人們現在有多餘的錢嗎？他們可以──或介意他們吃什麼？我的意思是，我們似乎看到了這種加速。您正在贏得客戶。

It's the value of our company. It's the nutrition education, the quality of the products that we sell, only organic produce, not having -- people don't have to come into our store and worry about reading the labels and finding products that are contaminated. And then you have a produce that's contaminated with conventional produce. They don't have to worry about finding a lot of artificial colors and preservatives in the groceries they buy.

這就是我們公司的價值。這是營養教育，我們銷售的產品質量，只有有機產品，沒有——人們不必進入我們的商店，擔心閱讀標籤並找到被污染的產品。然後你的產品就被傳統產品污染了。他們不必擔心在購買的雜貨中發現大量人造色素和防腐劑。

And then, of course, we always have the value proposition of our every day, always affordable pricing. And so that really helps to -- and then just engaging with the communities that we're in via our outreach through at nutrition education and events that we sponsor and food bank sponsoring and so on and so forth.

當然，我們始終堅持日常、始終實惠的價格的價值主張。因此，這確實有幫助——然後透過我們贊助的營養教育和活動以及食物銀行贊助的活動等等，與我們所在的社區接觸。

And then finally, taking care of our crew so that they can give the customers that come into our stores a very good shopping experience. As we've talked -- said in several of our calls, the average wage of our hourly employees is now up to $21 an hour, which is pretty much industry leading for the grocery business.

最後，照顧好我們的工作人員，以便他們能夠為進入我們商店的顧客提供非常好的購物體驗。正如我們在幾次電話中所說，我們的小時工的平均工資現在高達每小時 21 美元，這對於食品雜貨行業來說幾乎是行業領先的。

Any sense of who these new customers are? Do you have any data on that at all or no?

你知道這些新客戶是誰嗎？您有這方面的數據嗎？還是沒有？

They're people that value their -- they have an active lifestyle and value what they consume and put into their bodies.

他們是重視自己的——他們有積極的生活方式，重視他們所消耗的和攝入體內的東西。

Married -- younger children like older, you don't have any sense demographically?

已婚－年幼的孩子和年長的孩子一樣，你從人口統計學上沒有任何意義嗎？

Well, we appeal quite well to the 50- to 60-year range of people. And then we have a lot of families that like to shop at our stores. And then we're starting to appeal more to the younger generation because we have an authentic story and they like authenticity in where they shop.

嗯，我們對 50 到 60 歲的人群很有吸引力。然後我們有很多家庭喜歡在我們的商店購物。然後我們開始更多地吸引年輕一代，因為我們有一個真實的故事，而且他們喜歡購物的真實性。

And so they really appreciate that we stay true to our values and have always had the same values. We don't just go wishy-washy in wanting to say, well, this is popular now, so let's do it now. We've always said what is intrinsic to our company and people appreciate that. And then the value proposition really -- I mean, the value proposition for a lot of people is very important also. They always know that we're going to have a good price on things.

因此，他們非常欣賞我們忠於我們的價值觀並且始終擁有相同的價值觀。我們不會只是軟弱地想說，好吧，這現在很流行，所以讓我們現在就做吧。我們總是說我們公司的本質是什麼，人們對此表示讚賞。然後，價值主張確實──我的意思是，價值主張對很多人來說也非常重要。他們總是知道我們的東西會賣個好價錢。

Well, perfect. Like I said, I appreciate you taking all my questions, and good luck in the next quarter.

嗯，完美。就像我說的，我感謝您回答我的所有問題，祝您下個季度好運。

Thanks. You have a good day, Scott.

謝謝。你有美好的一天，斯科特。

(Operator Instructions) It appears there are no further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Kemper Isely for any closing remarks.

（操作員說明）看來沒有其他問題了。我們的問答環節到此結束。我想將會議轉回給肯珀艾斯利 (Kemper Isely) 發表閉幕詞。

Thank you for joining us today. We believe our strong first-quarter results have positioned us well to leverage this momentum throughout the balance of the fiscal year. Thank you and have a great day. Goodbye.

感謝您今天加入我們。我們相信，第一季的強勁業績使我們能夠在整個財年的剩餘時間內充分利用這一勢頭。謝謝您，祝您有美好的一天。再見。

The conference has now concluded. Thank you for attending today's presentation.

會議現已結束。感謝您參加今天的演講。

You may now disconnect.

您現在可以斷開連線。