SFM - Natural Grocers Still Looking For That Next Gear
2024-06-08 10:00:00 ET
Summary
- Natural Grocers has seen stronger same-store sales and margin performance, driven by its differentiated assortment, customer loyalty program, and focus on affordability.
- Private label remains a notable potential growth driver, with considerably less private label penetration than comps like Sprouts and Fresh Market.
- Management seems content with a modest pace of new store growth, reducing operating and balance sheet risk but capping overall growth potential.
- Natural Grocers isn't overvalued today, but with a shakier economy and tougher comps ahead, I'd prefer to wait in the hope of a pullback.
It’s been a while since I’ve updated my thoughts on Natural Grocers by Vitamin Cottage ( NGVC ) (“Natural Grocers”). I wasn’t excited about the return potential back in August of 2022 and the shares traded down from their price then for more than a year before stronger comps and margin performance in late 2023 led to a reawakening of the shares....
Natural Grocers Still Looking For That Next Gear