The retailer credits its performance in part to continued strength in dietary supplements, as well as strategic investments in customer education, collaborative pricing and rigorous quality assurance.
“Dietary supplements continue to play a significant role in our overall performance,” Jessica Thiessen, vice president and treasurer at Vitamin Cottage Natural Food Markets, Inc., told NutraIngredients. The category accounts for roughly 20% of total sales across Natural Grocers’ stores, which carry approximately 6,700 supplement SKUs.
Daily average comparable store sales increased 8.9% in the same fiscal period ending March 31, driven by higher traffic and larger transaction sizes. Diluted earnings per share reached $0.56.
Education, QA, loyalty and collaboration
Natural Grocers’ long-standing focus on nutrition education remains a key component of its strategy.
“In Fiscal Year 2024 alone, we dedicated more than $7 million to support our free, in-store nutrition education services,” Thiessen said. “We believe these services contribute meaningfully to our supplement sales performance by building trust and delivering personalized, high-quality experiences.”
Each location is staffed with a Nutritional Health Coach (NHC) who provides one-on-one coaching, educational events and internal crew training.
Natural Grocers also takes a conservative approach to new product adoption in the supplement space, with each product undergoing a thorough review—from ingredient analysis to verification of purity testing.
“Not every trending ingredient will appear on our shelves right away,” Thiessen said. “Our review process is deliberate, but we believe our high standards reinforce long-term customer trust—especially for those seeking the highest quality supplements on the market.”
Gross margins for the quarter increased by 100 basis points to 30.3%, largely driven by the success of loyalty programs and promotions, Thiessen said. These programs enable frequent engagement with customers through personalized offers and rewards, which Natural Grocers says helps boost traffic and encourage repeat purchasing.
Vendor relationships are also crucial to the company’s growth in the supplement market.
“We continue to work closely with our vendor partners to strike the right balance between quality, value and accessibility,” Thiessen said.
Transparent sourcing, long-term collaborations and cost efficiencies without sacrificing product integrity further contribute to the company’s profitable strategy.
“Affordability is a core part of our mission,” she added, referencing the retailer’s Always Affordable pricing model and monthly promotional discounts.
Poised for growth
The company closed the quarter with 169 stores in 21 states, following the addition of two new locations.
“Based on the strong second quarter results, we are increasing our fiscal 2025 outlook for daily average comparable store sales growth and diluted earnings per share,” Kemper Isely, co-president at Natural Grocers, said in the press statement.
The company is projecting daily average comparable store sales to grow between 6.5% and 7.5% and earnings per share to reach between $1.78 and $1.86 for the year.
“We believe there is a continuing trend in consumers’ prioritization of health and wellness...and that we are well positioned to capitalize on this dynamic,” Isely added.
With its fiscal 2025 outlook raised and new store openings on the horizon, the company is now focusing on its private-label supplement line as part of its strategy going forward.
“Each product is formulated with science-based expertise, made from premium-quality ingredients, manufactured in a third-party GMP-certified facility and priced with accessibility in mind,” Thiessen said.
She added that growth will follow a “modest, sustainable” approach to foster long-term opportunities for vendor partners.
