Natural Grocers by Vitamin Cottage, Inc.

Good day, ladies and gentlemen. Welcome to the Natural Grocers First Quarter Fiscal Year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the 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 Ms. Jessica Thiessen, Vice President, Treasurer for Natural Grocers. Ms. Thiessen, you may begin.

Good afternoon, and thank you for joining us for the Natural Grocers by Vitamin Cottage first quarter fiscal year 2025 earnings conference call. On the call with me today are Kemper Isley, co-president, and Rich Halle, chief financial officer. As a reminder, certain information provided during this conference call contains forward-looking statements based on current expectations and assumptions and 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 and uncertainties detailed in the company's most recently filed forms 10Q and 10K. The company undertakes no obligation to update forward-looking statements. Our remarks today include references to adjusted EBITDA, which is a non-GAAP measure. Please see our earnings release for a reconciliation of adjusted EBITDA to net income. Today's earnings release is available on the company's website, and a recording of this call will be available on the website at investors.naturalgrocers.com. Now I will turn the call over to Kemper.

Thank you, Jessica, and good afternoon, everyone. Thank you for joining us for our first quarter call. Today I will highlight our financial results, including key drivers of our performance, and provide an update on our initiatives. Then Rich will discuss the first quarter results in greater detail and review our updated fiscal year 2025 guidance. We are very pleased with the strong start to our fiscal year. Our first quarter results saw accelerating growth and continuation of the positive trends we experienced over the past two years, including broad-based growth across product categories and geographic regions. Moreover, comparable store sales growth has remained balanced between transaction counts, transaction size, and item per basket. We believe that many of our performance metrics are among the highest in grocery retail. Our daily average comparable store sales increase accelerated to 8.9% for the first quarter and was 15.1% on a two-year basis. Additionally, we have had eight consecutive quarters of positive transaction count comps and four consecutive quarters with both an increase in items per basket and modest inflation. Our sales growth in recent years and expectation for continued sales growth are supported by our differentiated offering. Consumers are increasingly prioritizing products that support health and sustainability, creating tailwinds for our business, are offering of high-quality products at always affordable prices creates a compelling value proposition that customers recognize is distinctive within the marketplace. Robust and balanced sales growth combined with effective expense management drove significant operating leverage and generated a 26.5% year-over-year increase in diluted earnings per share. We believe our growth in fiscal 2025 and beyond will benefit from our close alignment with consumer trends, strong customer engagement through our NPower Rewards Program, expansion of the Natural Grocers brand products, new store development, and driving existing store productivity. During the first quarter, net sales penetration of our NPower Rewards Program was 81%, up from 78% a year ago. reflecting continued positive trends in customer loyalty and engagement. Natural Grocers brand products represent premium quality at compelling prices. In the first quarter, our branded products accounted for 8.9% of total sales, up from 8.5% a year ago, helped in part by new products. During the quarter, We launched 23 new Natural Grocers brand items that all meet our high standards for nutritional health and sustainability, including organic varieties of tomato sauce, pasta, and soup. During the first quarter, we relocated two stores and closed two stores. Subsequent to the quarter, we opened a new store in Brownsville, Texas. Store unit growth and development continues to be a priority for our company. During fiscal 2025, we plan to open four to six new stores and relocate or remodel two to four stores. Earlier this week, we released our fiscal year 2024 sustainability report. Since my parents founded the company in 1955, Natural Grocers has prioritized offering quality products at affordable prices, nutrition education, and caring for our crew and communities. We believe that grocery stores play a pivotal role in the food chain, a system that is essential to health and well-being. We choose to positively impact the ways that food in this nation is grown, raised, and sold. We aim to offer nutritionally sound, environmentally responsible products and prioritize vendors and farmers who are as passionate about human health, animal welfare, and the health of our planet as we are. Furthermore, we believe that our company's ongoing financial success demonstrates that a business model dedicated to offering affordable, high-quality natural and organic products can help deliver positive environmental and social impact while creating value for all of our stakeholders. In closing, I would like to thank our Good4U crew for their commitment to operational execution and exceptional customer service. They have been essential to our sustained success. With that, I will turn our call over to Rich to discuss our financial results and guidance.