While dark clouds have settled over some of competitors in natural/organic grocery, Sprouts Farmers Markets on Thursday reported strong sales gains in the fourth quarter and a bright outlook for the new fiscal year, citing a winning combination of value and on-trend assortments.
Phoenix-based Sprouts said comparable-store sales in the quarter ended Jan. 3 increased by 7.4% when adjusted for the extra week in the fiscal year, a figure that easily topped Wall Street consensus estimates of 5.7% and far outpaced leading natural retailer Whole Foods Market, which earlier this month reported a comp decline of 1.8% over a similar period.
Total sales increased 27% to $930.3 million on the strength of new stores. Adjusted net income of $28.4 million increased by 57%, and earnings-per-share of 18 cents beat Wall Street by 2 cents, as both margins (up 13 basis points) and comps topped estimates.
“As more and more Americans embraced our 'Healthy Living for Less' model, Sprouts’ position of strength in the industry continued to grow in 2015,” Amin Maredia, CEO of Sprouts, said in a statement. “Our unique combination of health, value and customer engagement resulted in industry leading comps of 5.8% and strong earnings growth in the high teens. This momentum enables us to focus on our strategic priorities, including product and category innovation, in and out-of-store customer experience and developing team members who can lead our new stores as we continue to grow.”
Sprouts also reported a sunny outlook for comps in the current first quarter (4.5% to 6%) and said it expects comps to improve in a similar range for the fiscal year. Sprouts forecast for per-share earnings for the year (96 cents to 98 cents) also topped analyst estimates.
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