Sprouts Farmers Markets on Thursday said "near zero inflation" kept comparable store sales near the low end of its expected range — and below more optimistic Wall Street expectations — during the fiscal first quarter.
The Phoenix-based retailer reported revenues of $993.2 million for the period, an increase of 16%, and net income of $46.2 million, a 20% increase. Comparable-store sales of 4.8% was near the low end of the company's 4.5% to 5.5% guidance and below analyst consensus of 5.8%. Sprouts has typically guided conservatively, beating the midpoint of its expected range by 0.9% analyst Bill Kirk of RBC Capital noted. RBC had been anticipating 7% comp growth.
"Our first quarter results reflect our customers’ continued strong engagement with the Sprouts brand, and the appeal of our fresh, natural and organic products at affordable prices,” Amin Maredia, CEO, said. “Despite a near zero inflationary environment, our team delivered another solid quarter of comparable store sales growth and robust earnings improvement. We continue to further product innovation, enhance the customer experience, develop our team members and invest in infrastructure and technology, which position Sprouts for continued growth.”
Expectations of continuing low inflation and the timing of new store openings prompted Sprouts to adjust full-year sales guidance to a range of 17% to 19%, down from previous calls for 18% to 21% growth. It is maintaining guidance for 4% to 6% comp growth.
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