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Sprouts Farmers Market Releases Third Quarter FY 2023 Results


In a release dated October 31st, Sprouts Farmers Market (SFM) reported results for the third quarter of FY 2023 ended October 1st. Sprouts is regarded as a high-end grocery chain competing for health-conscious and affluent suburban consumers. Results for the third quarter beat Zach’s estimates on both the top and bottom lines, despite the fall in share price.      


For the period, SFM posted net income of $65.3 million on net sales of $1,713 million with a diluted EPS of $0.64.  Comparative figures for the third quarter ended October 1st 2022 were net income of $65.7 million on net sales of $1,591 million with a diluted EPS of $0.61. Comparing Q3 of 2023 with Q3 of the previous fiscal year, Sprouts Farmers Market increased sales by 7.6 percent. Gross margin fell to 36.5 percent from 36.7 percent attained in Q3 2022; and operating margin was 5.1 percent compared to 5.7 percent for Q3 2022. Sprouts generated a comparable same-store sales growth of 3.0 percent compared to the corresponding third quarter of 2022.


In commenting on results, Jack Sinclair, CEO, stated, "We are pleased to report another solid quarter at Sprouts, with continued increases in both traffic and comparable store sales," He added “Our results signal the alignment of our 31,000 team members across merchandising, marketing, supply chain, and operational initiatives-- propelling our strategy forward."


Guidance for FY 2023 was raised to include net sales growth of 6.5 to 7.0 percent; a comparable same-store sales increase of 3 percent; net unit growth of 30 stores.


The company posted total assets of $3,291 million including $589 million as goodwill and intangibles and the balance sheet shows long-term debt and lease liabilities of $1,579 million.


Sprouts Farmers Market has a market capitalization of $4,130 million and has traded for the past 52-weeks over a range of $28.40 to $44.43 with a 50-week moving average of $41.64.


On Wednesday, October 30, SFM closed at $43.20 and opened post-release on the following day at $40.38. Sprouts generated a trailing twelve-month operating margin of 5.1 percent and a profit margin of 3.8 percent. Return on assets was 7.6 percent and the return on equity attained 22.6 percent.


Sprouts employs 31,000 and operates more than 350 stores in 23 states.