Sprouts Farmers Market Reports Q3 2017 Results; Produce Department Thrives
PHOENIX, AZ - Sprouts Famers Market reported another strong financial quarter today, showing a 16% increase in Q3 2017 sales over last year, due, in part, from a strong showing in the produce department. As a result, the retailer increased its estimates for 2017 across the majority of its financial goalposts, including net sales, comparable store sales growth, and diluted earnings per share.
“Sales were strong across all departments, while inflation was muted and ended flat for the third quarter. The momentum in our non-perishable departments continued, and our produce department benefited from a very strong growing season this year,” said CEO Amin Maredia in a call with the company’s investors.
The boost in produce department looks to come as a surprise for the company, and may have influenced the increased outlook for its total 2017 finances. CFO Bradley Lukow added, “In the third quarter, we did have a benefit from a very strong produce growing season that we would not anticipate in the ordinary course to exist in the fourth quarter, which is traditionally a seasonally less robust produce period.”
In total, net sales for Q3 of 2017 were $1.2 billion, a 16% increase compared to the same period in 2016. Net income for the quarter was $31 million, a 32% increase compared to net income for the same period in 2016. Diluted earnings per share was $0.23, an increase of $0.07 or 44%, as compared to diluted earnings per share of $0.16 for the same period in 2016.
“Sprouts is pleased to report strong top-line growth and demonstrate our ability to leverage those sales into exceptional earnings growth for the quarter. Sprouts’ hallmark of fresh, healthy, affordable products continues to resonate with our customers and positions us as a leader in the industry,” Maredia said in a statement. “We’ll continue to accelerate strategic priorities that will enhance our business–from product assortment to the digital experience to customer service. These, coupled with our technology investments to drive efficiencies, will provide the flexibility to make future investments where needed to ensure Sprouts is well-positioned for the future.”
As mentioned above, this strong quarter was motivation for Sprouts to update its guidance, and, according to a press release, the new outlook is as follow for 2017:
- Net sales growth: 14.5% to 15%, up from 13% to 14% prior
- Comparable store sales growth: 2.5% to 3.0%, up from 1.5% to 2.0% prior
- Diluted earnings per share: $0.98 to $0.99, up from $0.88 to $0.92 prior
- Capital expenditures: Approximately $170M, up from $155M to $165M prior
To learn more details about Sprouts’ full quarter, you can read the retailer’s press release here. And until next quarter, keep checking back with AndNowUKnow for the latest updates.