In its third quarter of 2016, Sprouts Farmers Market delivered a 15 percent uptick in net sales and comparable store sales growth of 1.3 percent—a number that was slightly better than expected.
Even though it grew comps during a period of high cannibalization and deflation, earnings fell as the grocer stepped up promotions and increased payroll in the quarter.
Here are highlights from the earnings call Thursday:
- Net sales totaled $1 billion, up 15 percent from the same period last year.
- Diluted earnings per share were 16 cents, down from the same period last year and a penny short of analysts’ expectations.
- Comparable store sales grew 1.3 percent—1.2 percent from an increase in basket and 0.1 percent from traffic, CEO Amin Maredia said.
- Year-to-date, Sprouts is tracking 15 percent sales growth driven by a 3.4 percent increase in comparable store sales.
Sprouts opened 10 stores in the quarter and continued to expand its private label program, which now accounts for more than 10 percent of its revenue, according to Maredia. It’s also continuing work on its other key initiatives including expanded deli and fresh prepared offerings and growing its digital presence with customers.
Maredia commented that Sprouts foresees flat fourth-quarter comps. Investors reacted negatively to its unchanged earnings guidance for the full year, sending stocks down this morning.