Sprouts Farmers Market posted higher second-quarter sales as new store openings continued to support growth.
Net sales rose 5 per cent to $2.3 billion as the grocer opened seven new stores, taking its footprint to 490 locations across 25 states.
“Our second-quarter results were in line with our expectations,” said CEO Jack Sinclair.
“As we continue to navigate a cautious consumer environment, we are encouraged by the strong performance of our new stores and the continued success of our foraging and innovation efforts. We are focused on driving deeper customer engagement, and we are confident in our long-term growth trajectory.”
For the full year, Sprouts expects net sales growth of between 5.5 per cent and 6.5 per cent, comparable store sales ranging from a 0.5 per cent decline to a 0.5 per cent increase, and EBIT (earnings before interest and taxes) of between $675 million and $685 million.
The company also plans to open 42 additional stores this year.
Neil Saunders, MD at GlobalData, said the grocer’s results should be viewed against a strong comparison from last year, when total sales grew 17.3 per cent, and comparable sales increased 10.2 per cent.
“As Sprouts is lapping some tough prior year numbers, the latest revenue numbers are respectable. However, they are not spectacular in terms of the continued weakness in comparable sales,” Saunders explained.
He said Sprouts has maintained a loyal customer base despite signs that shoppers are reducing basket sizes to manage household budgets.
“Sprouts has done well to minimize this impact through compelling ranges and some retooling of price points in certain categories,” he said.
Saunders added that the retailer still has significant room for expansion, given its relatively small store network.
“Sprouts’ relative immaturity and smaller footprint give the business a lot of scope for expansion, and it still has a lot to play for in terms of building average spend,” he said.
“That ultimately means this is still a grocer with a good growth story to tell.”
- Further reading: Sprouts powers through FY25, unveils executive reset for next chapter.
