Dive Brief:
- Sprouts Farmers Market reported strong fourth-quarter results on Thursday, as the specialty grocer saw net sales increase 8% year over year, to $1.7 billion, and generated a 3.3% increase in comparable-store sales.
- The chain’s digital sales increased 17% during Q4, representing 12.4% of total sales.
- Sprouts’ shares have powered ahead over the past few months as its business has picked up momentum.
Dive Insight:
Sprouts’ latest results underscore the progress the company has been making as it seeks to improve its financial performance. While chains like Kroger and SpartanNash posted declining sales and comps during their most recent quarters, Sprouts has continued to boost those metrics.
Investors have taken notice: Sprouts’ stock price closed Thursday at $53.76, compared with $42.02 on Oct. 31, 2023, when the company last reported quarterly earnings. The health food-focused retailer’s shares continued to rise on Friday morning as investors digested its results.
For all of 2023, Sprouts brought in $6.8 billion in sales, up 7% compared with the same period in 2022, while comps rose 3.4%, driven by inflation and traffic, CFO Curtis Valentine said Thursday during an earnings call. E-commerce sales rose 15%, accounting for 12.2% of Sprouts’ overall sales for the year, Valentine added.
“It’s really encouraging …when we get the kind of growth that we’re getting in an e-comm environment because customers wouldn’t be navigating to our assortment if there wasn’t something differentiated in it. And the fact that we’re doing so well in e-comm gives me a lot of encouragement about the work that the merchants and the foraging team are doing in terms of bringing products to the marketplace,” Sprouts CEO Jack Sinclair said during the call.
Sprouts opened 30 new stores in 2023, all of which were in its new format, and concluded the year with 407 locations in 23 states, according to Valentine, who became the company’s finance chief on Jan. 1. The grocer expects to debut 35 stores during 2024 — down from a previous goal of 40 — with about half of the new locations slated for regions such as Florida and the mid-Atlantic where Sprouts is less established, Valentine said.
Sinclair said Sprouts has more than 100 approved stores and about 70 executed leases, which he said would help the grocer “maintain a strong pipeline moving forward.”
