Sprouts Profits Up; Same-Store Sales Increase 1.6.% in Q1

Phoenix-based Sprouts Farmers Market reported May 4 that net sales in its fiscal first quarter increased by 4% and comps rose by 1.6%—driven by a slight increase in same-store sales and new stores opened.

The grocer reported first-quarter profit of $88.3 million and that net sales in the first quarter, which ended April 3, totaled $1.6 billion.

Sprouts ended its quarterly earnings on a high note of 79 cents per share vs. earnings of 70 cents per share a year ago.

"We are encouraged with the strong start to the year,” said Jack Sinclair, CEO of Sprouts Farmers Market, in a statement. "We delivered top-line growth, supported by both positive comps and traffic, while simultaneously maintaining our gross-margin discipline. The commitment, passion and dedication of Sprouts 31,000 team members to one another, our customers and communities were key to our success. We look forward to continuing to engage our communities with innovative, healthy products in convenient smaller format stores, shaping our brand as a destination specialty grocer."

The natural foods retailer, which recently opened its 32nd store in Florida as part of its expansion in the Sunshine State, said it opened six new stores and closed one, resulting in 379 stores in 23 states as of April 3.

“While we are pleased with our first-quarter performance, inflation is not slowing and customers are continuing to put a few less items in their baskets,” Chip Molloy, chief financial officer of Sprouts, said in a statement. “Despite transaction comp continuing to be positive, given the level of uncertainty in the marketplace, we believe it is prudent to assume a more conservative approach to our outlook."

Molloy added that for the full year, “we now expect total sales growth, comparable store sales growth and earnings per share to be at the low end of the outlook provided during our last earnings release. We still expect to open between 15-20 new stores. For the second quarter of 2022, we expect comparable stores sales growth to be relatively flat and diluted earnings per share of 49 cents to 53 cents.”

On the same day as the grocer’s earnings call, Sprouts released its 2021 Environmental, Social and Governance (ESG) Report. The report highlights the grocer’s ongoing progress in growing its business sustainably and responsibly.

Several highlights from the report include Sprouts’ efforts to reduce carbon emissions per square foot by nearly 10% from 2019; the grocer achieving an overall landfill diversion rate of 60% by repurposing and recycling 79,000 tons of food and other recyclables; and it commitment to improving chicken welfare by providing environmental enrichments by 2024, reducing stocking density by 2025, and more humane processing through controlled-atmosphere stunning by 2026.

"I’m very pleased with the meaningful achievements we made on our ESG initiatives in 2021,” Sinclair said in a statement. “Our accomplishments reinforce the commitment of our 31,000 purpose-driven team members in caring for each other, our customers, communities and the planet. We look forward to continuing our progress in the years ahead as we execute on our long-term growth strategy that is rooted in ESG.”