Natural Grocers by Vitamin Cottage, Inc.

Ladies and gentlemen, welcome to the Natural Grocers First Quarter Fiscal Year 2026 Earnings Conference Call. At this time, all participants will be in a listen-only mode. Later, we will conduct a question-and-answer session, and the instructions will be given at that time. As a reminder, today's conference call is being recorded. I would 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 Growers by Vitamin Cottage first quarter fiscal year 2026 earnings conference call. On the call with me today are Kemper Isley, co-president, and Richard Halle, chief financial officer. As a reminder, certain information provided during this conference call, including the company's outlook for fiscal 2026, 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. During today's call, I will provide an overview of our financial results, highlight the key drivers of our performance, and share an update on our key operational initiatives. Then Rich will discuss the first quarter results in greater detail and review our fiscal year guidance. Our first quarter results were in line with expectations, including daily average comparable store sales growth of 1.7% and diluted earnings per share growth of 14% to 49 cents. Based on our first quarter performance and outlook for the remainder of the fiscal year, we are maintaining our full year guidance. There are several key underlying trends that I would like to highlight. The first quarter sales comp increase of 1.7% was cycling, an 8.9% comp last year. The two-year comp of 10.6% continues to reflect a robust growth rate relative to the broader grocery retail industry. While first quarter sales were consistent with our outlook, we believe these trends reflected cautious consumer spending behaviors observed broadly across the grocery retail sector. Additionally, the sales comp primarily reflected trends with customers who do not participate in our rewards program. We continue to see stronger sales growth by our NPower Rewards Program members. We believe that our differentiated offering of high-quality natural and organic products at always affordable prices continues to deliver strong value for our customers and reinforce our competitive position amid economic uncertainty. Furthermore, we believe that our company's initiatives position us well to achieve sustainable long-term growth. Next, I will review the performance of key operational initiatives. During the first quarter, NPower Rewards Program net sales penetration increased two percentage points to 83%, supported by strong membership gains and higher traffic by NPower customers. The continued expansion of both membership and sales penetration highlights our customers' appreciation for the program's value and benefits. NPower remains an effective tool for optimizing promotional activity and strengthening customer engagement. Our natural grocers brand products represent value through premium quality at compelling prices. In the first quarter, our private label products accounted for 9.6% of total sales, up 70 basis points from a year ago. The strong growth reflects rising customer awareness, driven in part by more prominent marketing efforts as well as the impact of new product introductions. During the first quarter, we relocated one store. Relocations are a key element of our store development strategy, as they typically generate accelerated sales growth off a higher sales base. Additionally, today we are affirming our plan of opening six to eight new stores in fiscal 2026. and are targeting 4-5% annual new store unit growth for the foreseeable future. Yesterday, our company released its fiscal year 2025 sustainability report. The featured topic is our differentiated nutrition education program. Since my parents founded our company in 1955, we have offered free nutrition education, because we believe it empowers our customers, crew, and communities to improve their well-being. This long-standing commitment earned us the Shelby Report 2025 Sustainability in the Food Industry Award for advancing sustainable practices in the food sector and driving meaningful change through our nutrition education program. For further information about our nutrition education program, our rigorous product standards, and commitment to our crew and communities, please refer to our sustainability report or visit our company's website. Last but not least, an important component of our differentiated model is the best-in-class customer service provided by our Good4U crew. I wish to express my deep appreciation to our crew for their continued commitment to delivering an exceptional shopping experience. Now, I will turn our call over to Rich to discuss our financial results in greater detail and fiscal 2026 guidance.