Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) Q1 2019 Earnings Conference Call Transcript

Feb 07, 2019 • 04:30 pm ET

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Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Natural Grocers First Quarter Fiscal Year 2019 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. As a reminder, today's call is being recorded.

I'd now like to turn the conference over to Mr. David Colson, Vice President and Treasurer for Natural Grocers. Mr. Colson, you may begin.

Executive
David Colson

Good afternoon, everyone, and thank you for joining us for the Natural Grocers by Vitamin Cottage first quarter fiscal year 2019 earnings conference call. On the call with me today are Kemper Isely, Co-President; and Todd Dissinger, Chief Financial Officer.

As a reminder, all statements made on this conference call, other than statements of historical fact are forward-looking statements. All forward-looking statements are based on current expectations and assumptions that 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 detailed in the company's most recently filed Forms 10-Q and 10-K. The company undertakes no obligation to update forward-looking statements.

Today's press release is available on the company's website and recording of this call will be available on the website at investors.naturalgrocers.com.

Now, I will turn the call over to Kemper.

Executive
Kemper Isely

Thank you, David, and good afternoon everyone. I am excited to report a strong start to fiscal 2019. Our founding principles continue to drive our business forward with our unsurpassed quality standards, always affordable prices, nutritional education, our commitment to our communities and our good4u Crew, all of which differentiate us from our competition. We believe our first quarter results show, we are telling this story better than we ever have in the past. We continue to build upon the momentum we achieved in fiscal 2018 and are pleased to report our seventh consecutive quarter of positive daily average comparable store sales, with comps up 5.5% and mature store comps up 3.6%. We generated an improved gross margin this quarter, which increased 40 basis points over the prior year. This improvement primarily reflects the more targeted promotion and pricing strategies, we implemented throughout fiscal 2018. And we are now beginning to anniversary the increased price investments we made throughout fiscal 2018.

In the first quarter, we continued to expand and refine our marketing efforts. These efforts included continued leverage of our NPower Loyalty program, which is contributing to the traffic of basket gains. NPower continues to be an effective resource for our enhanced and targeted marketing and promotion efforts. We were also pleased with the holiday selling period, including improved Turkey sales ahead of Thanksgiving and a strong performance throughout the Christmas holiday.

Over the last several quarters, our marketing and promotion efforts have been focused on Natural Grocers differentiation from the competition, and we are realizing positive momentum from that message. We are also focused on building brand awareness and have seen continued positive results from