Sprouts Farmers Market (SFM) Tops Q3 EPS by 16c, Slight Miss on Revenues; Offers 4Q & FY20 EPS Outlook

Sprouts Farmers Market (NASDAQ: SFM) reported Q3 EPS of $0.52, $0.16 better than the analyst estimate of $0.36. Revenue for the quarter came in at $1.6 billion versus the consensus estimate of $1.62 billion.

Third Quarter Highlights:

• Net sales of $1.6 billion; a 9.5% increase from the same period in 2019
• Comparable store sales growth of 4.2% and two-year comparable store sales growth of 5.7%
• Net income of $60 million and adjusted net income(1) of $62 million; compared to net income and adjusted net income of $26 million from the same period in 2019
• Diluted earnings per share of $0.51 and adjusted diluted earnings per share(1) of $0.52; compared to $0.22 diluted and adjusted diluted earnings per share from the same period in 2019

“Sprouts continues to prioritize the wellbeing of our team members and customers through our safe store operations and the wholesome foods we offer,” said Jack Sinclair, chief executive officer of Sprouts Farmers Market. “Our strong financial performance in the third quarter was driven by our curation of healthy offerings, coupled with ongoing strategic changes. With each passing quarter, the progression of our strategy strengthens our conviction in our long-term growth and our ability to provide exceptional returns for years to come.”

GUIDANCE:

Sprouts Farmers Market sees Q4 2020 EPS of $0.36-$0.40, versus the consensus of $0.38.

Sprouts Farmers Market sees FY2020 EPS of $2.26-$2.30, versus the consensus of $2.13.

As customers continue to consume much of their food at home due to the COVID-19 pandemic, grocery spend and ecommerce penetration have remained at elevated levels, as do additional company expenses. For the fourth quarter we expect our comparable store sales to be in the low single digits and inclusive of the 53rd week, adjusted diluted EPS to be between $0.36 to $0.40, which translates into a full-year adjusted diluted EPS range of $2.26 to $2.30, on a 53-week basis.

“We remain confident in executing our long-term unit growth plans, winning with our target customer, maintaining our strong balance sheet and delivering sustainable superior returns,” said Denise Paulonis, chief financial officer of Sprouts Farmers Market. “As we build out our 2021 plans, we are more focused than ever on maintaining the momentum we have captured in 2020, giving us confidence that our earnings before interest and taxes in 2021 will be in the range of $285 to $305 million.”

For earnings history and earnings-related data on Sprouts Farmers Market (SFM) click here.

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