In a release dated July 29th, Sprouts Farmers Market (SFM) reported results for the 2nd quarter of FY 2024 ended June 30th. Sprouts is regarded as a high-end grocery chain competing for health-conscious and affluent suburban consumers. Results for the quarter beat Zach’s estimates on both the top and bottom lines and for growth in same store sales.
For the period, the Company posted net income of $95.3 million on net sales of $1,894 million with a diluted EPS of $0.94. Comparable figures for the 2nd quarter ended July 2nd 2023 were net income of $67.3 million on net sales of $1,692 million with a diluted EPS of $0.65.
Comparing Q2 of 2024 with Q2 of the previous fiscal year, Sprouts Farmers Market increased revenue by 11.9 percent. Gross margin rose to 37.9 percent from 37.0 percent in Q2 2023. Operating margin was 6.7 percent compared to 5.4 percent for Q2 2023. Sprouts generated a comparable same-store sales growth of 6.7 percent compared to the corresponding 2nd quarter of 2023.
In commenting on results, Jack Sinclair, CEO, stated, Sprouts saw outstanding second quarter results, thanks to exceptional teamwork and strategic focus.” He added “Customers are responding to our healthy product assortment and our unique in-store experience. We are excited about the opportunities ahead."
Guidance for FY 2024 was raised to include net sales growth of 9.0 to 10.0 percent; a comparable same-store sales increase of 4.0 to 5.0 percent; adjusted diluted EPS of $3.29 to $3.37 and net unit growth of 35 stores requiring capital expenditure of $225 to $245million.
The company posted total assets of $3,411 million including $590 million as goodwill and intangibles with the balance sheet detailing long-term debt and lease liabilities of $1,530 million.
Sprouts Farmers Market had a market capitalization of $9,780 million on August 2nd and has traded for the past 52-weeks over a range of $37.10 to $103.80 with a 50-week moving average of $82.12
On July 29th SFM closed at $84.66 and closed post-release on the following day at $95.88, up 13.5 percent. Sprouts generated a trailing twelve-month operating margin of 6.7 percent and a profit margin of 4.5 percent. Return on assets was 8.2 percent and the return on equity attained 27.7 percent.
Sprouts employs 35,000 and operated 419 stores in 23 states on June 30th.