Revenue during the quarter grew 9.41 percent to $183.58 million from $167.79 million in the previous year period. Gross margin for the quarter contracted 37 basis points over the previous year period to 28.41 percent. Total expenses were 97.73 percent of quarterly revenues, up from 96.01 percent for the same period last year. That has resulted in a contraction of 172 basis points in operating margin to 2.27 percent.

Operating income for the quarter was $4.17 million, compared with $6.69 million in the previous year period.

"As anticipated, comparable store sales trends and margins remained under pressure during the first quarter," said Kemper Isely, Co-President. "However, we are pleased with our nutrition education investments centered around our nutrient-to-know-about initiatives, which contributed to positive comparable store sales growth in supplements and supported our favorable product margin performance during the quarter. Additionally, we were able to manage our cash flow to maintain our capital spending below the amount of cash provided by operations. We remain comfortable with our full-year fiscal 2017 guidance and are maintaining flexibility as we look to balance our growth and cost-saving initiatives. We continue to anticipate improved relative performance in the second half of our fiscal year."

For financial year 2017, Natural Grocers by Vitamin Cottage, Inc. expects revenue to grow in the range of 1.40 percent to 1.60 percent. The company projects diluted earnings per share to be in the range of $0.50 to $0.58.

The company has spent $10.49 million cash to meet investing activities during the quarter as against cash outgo of $10.17 million in the last year period. It has incurred capital expenditure of $10.49 million on net basis during the quarter, up 3.20 percent or $0.33 million from year ago period.

The company has spent $0.48 million cash to carry out financing activities during the quarter as against cash outgo of $0.10 million in the last year period.

Cash and cash equivalents stood at $7.14 million as on Dec. 31, 2016, up 233.43 percent or $5 million from $2.14 million on Dec. 31, 2015.

Working capital increases sharply
Natural Grocers by Vitamin Cottage, Inc. has recorded an increase in the working capital over the last year. It stood at $28.89 million as at Dec. 31, 2016, up 83.08 percent or $13.11 million from $15.78 million on Dec. 31, 2015. Current ratio was at 1.41 as on Dec. 31, 2016, up from 1.23 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 4 days for the quarter from 21 days for the last year period. Days sales outstanding were almost stable at 1 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 31 days for the quarter compared with 59 days for the previous year period. At the same time, days payable outstanding went down to 36 days for the quarter from 40 for the same period last year.