In a release dated May 1st, Sprouts Farmers Market (SFM) reported results for the 1st quarter of FY 2024 ended March 31st. 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 and for growth in same store sales.
For the period, the Company posted net income of $114.1 million on net sales of $1,884 million with a diluted EPS of $1.12. Comparable figures for the 1st quarter ended April 2nd 2023 were net income of $76.1 million on net sales of $1,733 million with a diluted EPS of $0.73. Comparing Q1 of 2024 with Q1 of the previous fiscal year, Sprouts Farmers Market increased revenue by 8.7 percent. Gross margin rose to 38.3 percent from 37.5 percent in Q1 2023. Operating margin was 7.9 percent compared to 5.9 percent for Q1 2023. Sprouts generated a comparable same-store sales growth of 4.0 percent compared to the corresponding 1st quarter of 2023.
In commenting on results, Jack Sinclair, CEO, stated, "We were pleased with our impressive financial results this quarter, with strength in comparable store sales, traffic, and E-commerce”. He added . "These outcomes highlight the effectiveness of our strategy and the exceptional execution by our team members across the country. We are reinforcing our position as a leading specialty food retailer as we build new stores in line with our growth plans.”
Guidance for FY 2024 was raised to include net sales growth of 7.0 to 8.0 percent; a comparable same-store sales increase of 2.5 to 3.0 percent; net unit growth of 35 stores requiring capital expenditure of $225 to $245 million.
The company posted total assets of $3,472 million including $589 million as goodwill and intangibles with the balance sheet detailing long-term debt and lease liabilities of $1,612 million.
Sprouts Farmers Market had a market capitalization of $6,480 million on May 2nd and has traded for the past 52-weeks over a range of $32.12 to $74.03 with a 50-week moving average of $63.05
Om May 1st SFM closed at $66.03 and opened post-release on the following day at $73.00, up 10.6 percent. Sprouts generated a trailing twelve-month operating margin of 7.9 percent and a profit margin of 4.3 percent. Return on assets was 8.1 percent and the return on equity attained 2 percent.
Sprouts employs 35,000 and operates more than 380 stores in 23 states.