Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) is a chain of grocery stores offering natural and organic foods and personal care products. The company, based in Colorado, is expanding but has not yet reached east of the Mississippi River. Therefore millions of us have never seen a Natural Grocers store or heard of the company. Currently there are about 60 stores reaching from Missouri west to Idaho, south to Arizona, New Mexico and Texas, and north to Montana.
Natural Grocers began as a man and wife team in 1955 when the Isely’s went door-to-door selling whole grain bread in Golden, Colorado. The couple soon opened a small retail outlet, adding stores over the decades. Family members continue to manage the company.
Natural Grocers made its appearance on Wall Street on July 25, 2012. The IPO price was $15; the stock closed its first trading day at $17.86. The stock reached a high of $24.75 on Oct. 3, 2012, a low of $17.69 on Jan. 10, 2013, then began rising, currently trading in the mid-$19 range. Natural Grocer’s current P/E is a lofty 64.40.
Company sales grew 27.16%, from $264.54 million to $336.39M, from 2011 to 2012. Net income grew 89.76%, from $264.54 million in 2011 to $336.39 million in 2012.
Expansion plans involve adding additional stores in current states and expanding to contiguous states, controlling infrastructure costs and logistics.
Competitors in the Natural Foods Marketplace
Whole Foods Market, Inc. (NASDAQ:WFM) is one of Natural Grocer’s aggressive competitors. Whole Foods is one of the few companies in the natural and organic industry offering a dividend, currently $0.20, a meager yield of .88%. The following chart illustrates the company's revenue, net income, and cash from operations over the past five years. Sales grew 15.74% in 2012 and net income increased 35.89%, an indication management is keeping a sharp eye on costs. Current P/E is 35.81.
data by YCharts
Another Natural Grocers’ competitor is The Fresh Market Inc (NASDAQ:TFM) , a specialty food chain with over 115 stores throughout the east, mid-west, and California. The company specializes in non-perishable fresh foods, and stores have a farmers’ market atmosphere. The current P/E is 44.79. The Fresh Market struggled during the Great Recession and immediately following. The company rebounded, controlling costs and growing sales during a difficult period. Net income grew 124.29% from 2011 to 2012 and sales grew 13.74%, illustrated in the following chart.
data by YCharts
A regional competitor in the natural foods grocery arena is Sprouts, a privately held chain with about 150 stores throughout the Southwest.