Sprouts creates chief merchandising officer role

Sprouts Farmers Market has promoted Dave McGlinchey to chief merchandising officer, a newly created position.

McGlinchey has served as senior vice president of merchandising services since joining Phoenix-based Sprouts in October 2017. He reports to Jim Nielsen, president and chief operating officer.

With more than 20 years of experience in the retail grocery arena, McGlinchey (left) was vice president, general merchandise manager and chief merchant of grocery for Kmart before coming to Sprouts. Before that, he served as senior vice president of merchandising and marketing for Shaw’s and Star Markets, then owned by Supervalu Inc.

Earlier, he held a range of leadership posts over a 14-year span at Ahold USA’s Stop & Shop/Giant Food, most recently as senior vice president of merchandising support and vice president of grocery merchandising.

“Dave’s experience and passion for delivering consistent, coordinated and sustainable merchandising strategies across all categories will continue to position Sprouts as a driving force for making innovative natural and organic brands affordable and accessible for everyone,” Nielsen said in a statement.

Focusing on fresh, natural and organic products, Sprouts operates 305 stores in 17 states across the country.

Double-digit revenue growth

So far in fiscal 2018, Sprouts has seen double-digit revenue growth. The retailer on Thursday reported second-quarter sales of $1.32 billion, up 12% from $1.18 billion a year earlier. Same-store sales for the quarter, which ended July 1, rose 2% year over year.  

Net earnings came in at $41.7 million, or 32 cents per diluted share, compared with nearly $41 million, or 29 cents per diluted share, a year ago. The EPS result matched analysts’ consensus estimate of 32 cents, with projections ranging from a low of 30 cents to a high of 35 cents, according to Thomson Reuters.

“Double-digit sales and EPS growth in our second quarter reflects the strength of Sprouts’ differentiated business model and our solid execution across new and existing markets,” Sprouts CEO Amin Maredia said in a statement. “Our planned 2018 investments in our team members and technology, which increased this quarter, will strengthen our customer service, generate operational efficiencies and support our long-term growth.”

For the 2018 first half, Sprouts totaled sales of about $2.61 billion, up 13% from $2.31 billion a year ago. Comparable-store sales grew 2.3%.  Net income was $108.3 million, or 82 cents per diluted share, versus $87.3 million, or 62 cents per diluted share, in the prior-year period.

Sprouts said it opened seven new stores in the second quarter, including two in California and one each in Arizona, Georgia, Nevada, North Carolina and South Carolina. The latter location marked the retailer’s first store in that state. Four more stores have been opened in the third quarter to date. The company expects to open about 30 stores overall this year.

Looking ahead, Sprouts projects revenue growth of 10.5% to 11.5% and comp-store sales gains of 1.5% to 2.5% for the full 2018 fiscal year. Diluted earnings per share (EPS) are forecast at $1.24 to $1.28, up 2 cents on the bottom end from the company’s previous guidance.

Analysts, on average, peg Sprouts’ full-year EPS at $1.25, with estimates running from a low of $1.22 to a high of $1.30, according to Thomson Reuters.