PHOENIX - Sprouts Farmers (NASDAQ:SFM) Market, Inc. (NASDAQ: SFM) reported robust second-quarter earnings, surpassing analyst expectations, and provided an optimistic outlook for the third quarter and full fiscal year 2024, sending shares up by 11%.
For the 13-week period ending June 30, 2024, Sprouts announced a second-quarter net sales increase of 12% to $1.9 billion, up from the same quarter last year, and ahead of the consensus estimate of $1.84 billion. The company's diluted earnings per share (EPS) came in at $0.94, significantly outperforming the analyst estimate of $0.78. This compares favorably to the diluted EPS of $0.65 and adjusted diluted EPS of $0.71 reported in the same period in 2023.
CEO Jack Sinclair attributed the strong quarter to "exceptional teamwork and strategic focus," with customers responding positively to Sprouts' healthy product assortment and unique in-store experience. The company's comparable store sales growth stood at 6.7%, and five new stores were opened, bringing the total to 419 stores across 23 states.
Looking ahead, Sprouts provided guidance for the third quarter of 2024, forecasting an adjusted diluted EPS between $0.71 and $0.75, which is above the analyst consensus of $0.69. The company also expects comparable store sales growth ranging from 3.5% to 4.5%. For the full year, Sprouts anticipates a net sales growth of 9% to 10%, with comparable store sales growth between 4% and 5%.
The adjusted EBIT is projected to be between $445 million and $455 million, and the adjusted diluted EPS is estimated to be in the range of $3.29 to $3.37, exceeding the consensus of $3.13. Additionally, the company plans to open approximately 35 new stores and has earmarked capital expenditures (net of landlord reimbursements) of $225 million to $245 million.
The company ended the quarter with a strong balance sheet, featuring $177 million in cash and cash equivalents and no balance on its $700 million revolving credit facility after a $125 million voluntary pay down. Sprouts also authorized a new $600 million share buyback program and repurchased 640 thousand shares of common stock for a total investment of $44 million, excluding excise tax.
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