Natural Grocers (NYSE: NGVC) reported Q2 EPS of $0.43, $0.26 better than the analyst estimate of $0.17. Revenue for the quarter came in at $277.5 million versus the consensus estimate of $249.1 million.

Highlights for Second Quarter Fiscal 2020 Compared to Second Quarter Fiscal 2019

• Net sales increased 20.4% to $277.5 million;
• Daily average comparable store sales increased 17.0%;
• Operating income increased 116.6% to $13.3 million;
• Net income increased 151.8% to $9.7 million with diluted earnings per share of $0.43;
• EBITDA increased 57.7% to $21.1 million;
• Opened two new stores, resulting in a 3.3% new store growth rate for the twelve-month period ended March 31, 2020; and
• The Board of Directors has extended the Company's share repurchase program and declared a quarterly dividend of $0.07 per common share.

"Our exceptional results for the second quarter were driven by unprecedented sales activity resulting from the COVID-19 outbreak," said Kemper Isely, Co-President. "We are deeply grateful to our amazing good4uSM Crew members, who worked tirelessly during the quarter to quickly adapt to new circumstances on an almost daily basis. Due to their efforts, our company was able to continue delivering to customers in all our markets the highest quality natural and organic produce, groceries and household essentials during a period of unparalleled challenges. We wish to thank each and every one of our Crew members, who are heroes in masks and aprons, for their courageous work and selfless contribution; they are the personification of the same principles and integrity that have distinguished the Natural Grocers name for the past 65 years."

Mr. Isely continued: "During the second quarter, we saw net sales increase 20.4%, with average daily comparable store sales growth of 17.0%. We experienced above-average sales increases in household products, supplements, grocery and bulk. We are one of the few retailers where consumers can still buy bulk products, as we prepackage all bulk at our own bulk processing facility. Our private label brands also performed well. We experienced increased net sales, driven by a significantly increased average basket size, beginning in late February and continuing through the end of the quarter, driven by our customers' response to the COVID-19 pandemic. We remain focused on ensuring our supply chain is able to keep up with demand, supporting our Crew members and providing our customers with the products they need, as we work as a community to get through these uncertain times,"

Mr. Isely added: "The safety of our heroes in masks and aprons and customers has been the driving factor behind every decision we have made over the past several months, and will continue to be throughout this global pandemic. We are proud of the numerous steps we took proactively to protect the safety of our Crew members and customers. Those steps include establishing social distancing measures throughout our stores; sourcing and repacking bulk hand sanitizer for our Crew members when supplies were limited; relying on family, Crew and community to produce more than 6,000 face masks for all our Crew members and requiring those masks to be worn; establishing customer capacity limits in our stores; adjusting store hours to allow for cleaning and restocking; installing plexiglass protective shields at our checkouts; creating store hours reserved for seniors and other at-risk members of the community; expanding medical leave; and instituting our Hero Pay program, which includes raising wages and paying bonuses to our Crew members in recognition of their extraordinary efforts and to ease the financial burdens on their families."

GUIDANCE:

Natural Grocers sees FY2020 EPS of $0.54-$0.62, versus the consensus of $0.40.

The Company has updated its fiscal 2020 outlook, reflecting year to date results and current trends in light of the rapidly evolving COVID-19 environment. The Company cannot predict the duration or severity of the current COVID-19 environment and how that could impact financial results. The fiscal 2020 outlook does not contemplate significant additional changes to the current operating environment as a result of further COVID-19 developments and assumes a moderation of COVID-19 related elevated sales as the year progresses. Additionally, the Company intends to delay signing new lease commitments in the near-term as it monitors the evolving macroeconomic situation

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