Natural Grocers Expands Footprint, Targets 4-5% Annual Store Growth

TL;DR

**NGVC is a steady growth play in the natural foods sector, expanding its store count and doubling down on its core values to capture health-conscious consumers.**

AI Summary

Natural Grocers by Vitamin Cottage, Inc. (NGVC) reported a market value of voting and non-voting common stock held by non-affiliates at $380,462,609 as of March 31, 2025. The company, a specialty retailer of natural and organic groceries and dietary supplements, expanded its store count to 169 stores across 21 states by September 30, 2025, up from 11 stores in 1998. In fiscal year 2025, NGVC opened two new stores, following four new store openings in fiscal year 2024. The company plans to open six to eight new stores in fiscal year 2026, targeting an annual new store unit growth rate of 4% to 5% for the foreseeable future. NGVC emphasizes strict quality guidelines, offering approximately 20,000 SKUs of natural and organic products per comparable store, including 6,500 SKUs of dietary supplements. Key strategies include expanding its store base and increasing sales from existing customers through nutrition education and promotions like the {N}power customer rewards program.

Why It Matters

Natural Grocers' continued expansion and commitment to its niche in natural and organic products could offer stability for investors in a competitive grocery market, especially given its focus on customer education and strict quality standards. This strategy differentiates NGVC from conventional supermarkets and mass retailers, potentially fostering strong customer loyalty. For employees, the company's emphasis on nutrition education and internal promotion suggests a supportive work environment. Customers benefit from a curated selection of high-quality, ethically sourced products and free health coaching, which could drive market demand for similar offerings. The broader market sees a growing trend towards sustainable and health-conscious consumption, with NGVC positioned to capitalize on this shift.

Risk Assessment

Risk Level: medium — The company operates in a highly competitive natural products retail industry, facing competition from conventional supermarkets, mass retailers, and online platforms, as detailed in 'Our Markets' on page 2. While NGVC plans to open six to eight new stores in fiscal year 2026, achieving its targeted 4% to 5% annual new store unit growth rate could be challenging amidst intense market saturation and rising operational costs, as implied by the 'Risk Factors' section on page 17.

Analyst Insight

Investors should monitor NGVC's new store opening cadence and comparable store sales growth in fiscal year 2026 to assess the effectiveness of its expansion strategy. Evaluate the impact of increased digital and social media investment on customer acquisition and retention, as these are crucial for sustaining growth in a competitive market.

Key Numbers

• $380,462,609 — Aggregate market value of non-affiliate common stock (as of March 31, 2025, indicating significant public float)
• 23,033,093 — Shares of common stock outstanding (as of December 8, 2025)
• 169 — Total store count (as of September 30, 2025, showing consistent expansion)
• 21 — Number of states with Natural Grocers stores (as of September 30, 2025, demonstrating geographic reach)
• 2 — New stores opened in fiscal year 2025 (reflecting recent growth)
• 4 — New stores opened in fiscal year 2024 (reflecting prior year's growth)
• 6-8 — Planned new store openings in fiscal year 2026 (indicating future expansion targets)
• 4%-5% — Target annual new store unit growth rate (for the foreseeable future, signaling aggressive expansion)
• 20,000 — Average SKUs of natural and organic products (per comparable store, highlighting extensive product offering)
• 6,500 — Average SKUs of dietary supplements (per comparable store, emphasizing a key product category)

Key Players & Entities

• Natural Grocers by Vitamin Cottage, Inc. (company) — registrant
• Margaret Isely (person) — co-founder of Natural Grocers
• Philip Isely (person) — co-founder of Natural Grocers
• Kemper Isely (person) — second generation family member, assumed control in 1998
• Zephyr Isely (person) — second generation family member, assumed control in 1998
• Heather Isely (person) — second generation family member, assumed control in 1998
• Elizabeth Isely (person) — second generation family member, assumed control in 1998
• New York Stock Exchange (regulator) — exchange where NGVC common stock is registered
• Securities and Exchange Commission (regulator) — filing oversight
• United States Department of Agriculture (regulator) — certifies organic produce standards

FAQ

Risk Factors

• Competition from other retailers [high — market]: The Company faces intense competition from a variety of sources, including conventional supermarkets, mass merchandisers, warehouse clubs, drug stores, and other specialty and natural/organic retailers. Some competitors may have greater financial resources, broader product selection, or more established brand recognition, which could negatively impact the Company's market share and profitability.
• Supply chain disruptions [medium — operational]: The Company's ability to source and distribute products depends on its supply chain. Disruptions due to natural disasters, pandemics, labor disputes, or other factors could impact product availability and increase costs, affecting sales and profitability. The Company relies on a limited number of suppliers for certain products.
• Maintaining quality standards [high — operational]: The Company's success is tied to its strict quality guidelines for natural and organic products. Failure to maintain these standards, or negative publicity related to product quality, could damage the brand's reputation and customer trust. This includes ensuring all products meet stringent criteria regarding artificial ingredients and processing.
• Economic downturns [medium — financial]: A significant economic downturn could reduce consumer spending on discretionary items, including natural and organic groceries and supplements, impacting the Company's sales and financial performance. Consumers may trade down to less expensive alternatives.
• Food safety and labeling regulations [medium — regulatory]: The Company is subject to various federal, state, and local regulations concerning food safety, product labeling, and marketing. Changes in these regulations or non-compliance could result in fines, recalls, or reputational damage. This includes regulations from the FDA and USDA.
• Cybersecurity threats [medium — operational]: The Company collects and stores sensitive customer and operational data. A cybersecurity breach could lead to data loss, theft, or unauthorized access, resulting in significant financial and reputational damage, as well as potential legal liabilities. The Company has implemented measures to protect its systems.
• Changes in consumer preferences [medium — market]: Shifts in consumer demand for natural and organic products, or changes in dietary trends, could affect the Company's product mix and sales. The Company must adapt to evolving consumer preferences to remain competitive.
• Reliance on key personnel [low — operational]: The Company's success depends on the continued service of its executive officers and other key employees. The loss of key personnel could disrupt operations and negatively impact the business.

Industry Context

Natural Grocers operates in the highly competitive specialty retail sector, focusing on natural and organic groceries and dietary supplements. The industry is characterized by increasing consumer demand for health-conscious products, but also by intense competition from conventional supermarkets, mass merchandisers, and other niche retailers. Key trends include a growing emphasis on transparency in sourcing, sustainability, and personalized nutrition.

Regulatory Implications

The company must adhere to a complex web of federal, state, and local regulations governing food safety, product labeling (e.g., USDA organic standards), and marketing claims. Compliance is critical to avoid penalties, recalls, and reputational damage. Evolving regulations around dietary supplements and organic certifications present ongoing compliance challenges.

What Investors Should Do

1. Monitor new store opening pace and performance
2. Evaluate the effectiveness of the {N}power program and nutrition education
3. Assess competitive pressures and market share trends
4. Analyze gross and operating margins for efficiency gains

Key Dates

• 2025-03-31: Aggregate market value of non-affiliate common stock reported — Indicates the public float and market valuation of the company as of this date, valued at $380,462,609.
• 2025-09-30: Total store count reached 169 — Demonstrates consistent physical expansion of the retail footprint across 21 states.
• 2025-09-30: Number of states with Natural Grocers stores — Shows the geographic reach of the company's operations, spanning 21 states.
• 2025-09-30: New stores opened in fiscal year 2025 — Reflects recent growth and expansion efforts, with 2 new stores opened.
• 2024-09-30: New stores opened in fiscal year 2024 — Indicates prior year's growth trajectory, with 4 new stores opened.
• 2025-12-08: Shares of common stock outstanding reported — Provides the total number of shares available in the market, totaling 23,033,093.

Glossary

SKUs

Stock Keeping Units, a unique identifier for each distinct product and service that a retailer sells. (Indicates the breadth of product offerings per store, with Natural Grocers offering approximately 20,000 SKUs of natural and organic products, including 6,500 SKUs of dietary supplements.)

Non-affiliate common stock

Shares of stock held by individuals or entities that are not officers, directors, or major shareholders of the company. (The market value of this stock ($380,462,609 as of March 31, 2025) reflects the public's valuation of the company outside of insiders.)

Fiscal year

A 12-month period that a company uses for accounting purposes. Natural Grocers' fiscal year ends on the last Wednesday of September. (Used to report financial performance and operational metrics, such as new store openings (2 in FY2025, 4 in FY2024) and future targets (6-8 in FY2026).)

USDA certified organic

Products that have been certified by the United States Department of Agriculture to meet specific standards for organic production and handling. (Highlights a key quality standard for Natural Grocers' fresh produce, aligning with their commitment to high-quality offerings.)

Artificial flavors, preservatives or sweeteners, synthetic colors, or partially hydrogenated or hydrogenated oils

Ingredients that Natural Grocers explicitly excludes from its product offerings due to their perceived negative health impacts. (Defines the strict quality guidelines that differentiate Natural Grocers from conventional retailers and appeal to health-conscious consumers.)

{N}power customer rewards program

A loyalty program designed to incentivize repeat business and increase sales from existing customers. (Represents a key strategy for customer retention and sales growth, alongside nutrition education.)

Year-Over-Year Comparison

While specific comparative figures for the prior 10-K are not detailed here, the provided context indicates a pattern of consistent expansion, with 4 new stores opened in FY2024 and 2 in FY2025, alongside a target of 6-8 for FY2026. This suggests continued investment in growth. The market value of non-affiliate stock at $380,462,609 as of March 31, 2025, indicates a significant public float, though year-over-year changes in revenue, net income, and margins would require direct comparison to the previous filing's financial statements.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value NGVC New York Stock Excha

Filing Documents

• ngvc20250930_10k.htm (10-K) — 1941KB
• ex_895559.htm (EX-23.1) — 2KB
• ex_895555.htm (EX-31.1) — 13KB
• ex_895556.htm (EX-31.2) — 13KB
• ex_895557.htm (EX-31.3) — 13KB
• ex_895558.htm (EX-32.1) — 10KB
• i01.jpg (GRAPHIC) — 46KB
• i02.jpg (GRAPHIC) — 56KB
• i03.jpg (GRAPHIC) — 18KB
• ng01.jpg (GRAPHIC) — 5KB
• 0001437749-25-037556.txt ( ) — 9586KB
• ngvc-20250930.xsd (EX-101.SCH) — 87KB
• ngvc-20250930_def.xml (EX-101.DEF) — 551KB
• ngvc-20250930_lab.xml (EX-101.LAB) — 515KB
• ngvc-20250930_pre.xml (EX-101.PRE) — 605KB
• ngvc-20250930_cal.xml (EX-101.CAL) — 86KB
• ngvc20250930_10k_htm.xml (XML) — 1358KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 17 Item 1B. Unresolved Staff Comments 39 Item 1C. Cybersecurity 39 Item 2.

Properties

Properties 40 Item 3.

Legal Proceedings

Legal Proceedings 40 Item 4. Mine Safety Disclosures 40 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6. Reserved 42 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 42 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 54 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 55 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 81 Item 9A.

Controls and Procedures

Controls and Procedures 81 Item 9B. Other Information 81 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 81 PART III Item 10. Directors, Executive Officers and Corporate Governance 82 Item 11.

Executive Compensation

Executive Compensation 82 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 82 Item 13. Certain Relationships and Related Transactions, and Director Independence 82 Item 14. Principal Accounting Fees and Services 82 PART IV Item 15. Exhibits and Financial Statement Schedules 83 Item 16. Form 10-K Summary 86

SIGNATURES

SIGNATURES 87 i Table of Contents Except where the context otherwise requires or where otherwise indicated: (i) all references herein to we, '' us, '' our, '' Natural Grocers '' and the " Company '' refer collectively to Natural Grocers by Vitamin Cottage, Inc. and its consolidated subsidiaries and (ii) all references to " fiscal year " refer to a year beginning on October 1 of the previous year and ending on September 30 of such year (for example " fiscal year 2025 " refers to the year from October 1, 2024 to September 30, 2025).

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K (this Form 10-K) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 in addition to historical information. These forward-looking statements are included throughout this Form 10-K, including in the sections entitled "Business," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." All statements that are not statements of historical fact, including those that relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, future growth, pending legal proceedings and other financial and operating information, are forward-looking statements. We may use the words "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future," "target" and similar terms and phrases to identify forward-looking statements in this Form 10-K. The forward-looking statements contained in this Form 10-K are based on management's current expectations and are subject to uncertainty and changes in circumstances. We cannot assure you that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to changes in global, national, regional or local political, economic, inflationary, disinflationary, recessionary, business, interest rate, labor market, competitive, market, regulatory, trade policy, supply chain and other factors, many of which are beyond our control. We believe that these factors include those described in "Risk Factors." Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in th

Business

Item 1. Business. General Natural Grocers is an expanding specialty retailer of natural and organic groceries and dietary supplements. We focus on providing high-quality products at affordable prices, exceptional customer service, nutrition education and community outreach. We strive to generate long-term relationships with our customers based on transparency and trust by: selling only natural and organic groceries, body care products and dietary supplements that meet our strict quality guidelines - we do not approve for sale grocery products that are known to contain artificial flavors, preservatives or sweeteners, synthetic colors, or partially hydrogenated or hydrogenated oils; utilizing an efficient and flexible smaller-store format to offer affordable prices and a convenient, clean and shopper-friendly retail environment; enhancing our customers' shopping experience by providing free science-based nutrition education to help our customers make well-informed health and nutrition choices; and incorporating principles of ecological sustainability into our product standards and Company practices. 1 Table of Contents Our History and Founding Principles Our founders, Margaret and Philip Isely, were early proponents of the connection between health and the use of natural and organic products and dietary supplements. In the mid-1950's, Margaret transformed her health and the health of her family by applying concepts and principles she learned from books on nutrition. This inspired the Iselys to provide the same type of nutrition education to their community. The Iselys started by lending books on nutrition and providing samples of whole grain bread door-to-door in Golden, Colorado and subsequently concluded they could develop a viable business that would also improve their customers' wellbeing. Over time, they fostered relationships through nutrition education and began taking orders for dietary supplements, whole grain bread and unprocessed foods. As the

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