Company: NGVC
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001437749-25-037556
Chunk: 819

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 819
---
 epidemics in the United States or in international markets could also lead to a decrease in spending by consumers or may cause our customers to avoid visiting our stores. In particular, global events, including the conflicts in Ukraine and the Middle East, have disrupted commodity markets and have contributed to global supply chain disruption and inflation. Furthermore, government shutdowns or other federal funding disruptions may reduce access to federal food assistance or otherwise reduce household income for certain of our customers. We may experience continued volatility with respect to these trends. Our results of operations depend upon, among other things, our ability to maintain and increase sales volume with our existing customers, to attract new customers and to provide products that appeal to customers at prices they are willing and able to pay. Prolonged unfavorable economic conditions or political instability may have an adverse effect on our sales and profitability.

21

Inflation or disinflation could adversely affect our business.

Our financial performance could be adversely impacted by relative rates of inflation or disinflation, which are subject to market conditions. Inflationary or disinflationary pressures on the products we sell could impact our net sales and earnings. If the cost of goods changes as a result of inflation or disinflation, we may be unable to adjust our retail prices accordingly, which could adversely impact our sales or earnings. In recent years, we experienced levels of inflation that were higher than we have historically experienced, resulting in part from various supply disruptions, geopolitical instability, including the conflicts in Ukraine and the Middle East, increased shipping and transportation costs, increased commodity costs, increased labor costs in the supply chain, monetary policy actions, tariffs and trade restrictions, other disruptions and the uncertain economic environment. We have been able to mitigate this impact to date through our pricing strategies. While levels of inflation moderated during fiscal years 2024 and 2025, we are unable to predict the long-term impact of inflationary or disinflationary trends on consumer behavior and our sales and profitability in the future. Additionally, commodities used in many of our products, including our Natural Grocers brand products, can be subject to availability constraints and price volatility caused by weather, supply conditions, political instability, government regulations, tariffs, energy prices and general economic conditions and other unpredictable factors. Changes in food and commodity prices could also negatively impact our sales and earnings if our competitors react more aggressively. Additionally, the cost of construction materials and labor we use to build and remodel our stores is also subject to price volatility based on market and economic conditions. Higher construction material and labor prices could increase the capital expenditures needed to construct