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Sprouts reports big sales in 4Q; healthy '16 outlook

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.


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“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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