Dive Brief:
- Sprouts Farmers Market reported strong second-quarter results on Monday with sales up 12% year over year to $1.9 billion and a 6.7% increase in comparable-store sales.
- Sprouts’ private label brand and its e-commerce business were significant drivers in the specialty grocer’s quarterly performance, accounting for 22% and 14% of total sales, respectively.
- Moving into the second half of its fiscal year, the grocer said it will continue its ambitious store growth plan and monitor the beta test it recently started on its long-awaited loyalty program.
Dive Insight:
Same-store sales and the addition of new stores were significant drivers of Sprouts’ Q2 performance, CFO Curtis Valentine said during Monday’s call with investors.
Sprouts’ same-store sales keep rising
E-commerce sales grew 30% in Q2, up 5 percentage points from the prior quarter and representing the same percentage of overall sales as last quarter.
Valentine noted that Sprouts particularly benefited from an early and strong seasonal produce harvest that “saw business strengthen more than anticipated with the kick-off of summer.”
Sprouts restated its 2024 goal of opening approximately 35 new stores by the end of this year and noted that more than half of the remaining openings are slated for the fourth quarter, Sprouts CEO Jack Sinclair said during the call.
Sinclair also noted the company has robust store opening plans for the next few years, including 110 approved new locations and more than “70 executed leases in the pipeline.”
As Sprouts gears up to launch its loyalty program, the grocer’s executives shared Monday it is testing the program in Tucson, Arizona, and Nashville, Tennessee — “one older market and one newer market,” Sinclair said.
The program has worked “very well for the three days that we’ve been operating,” Sinclair noted, highlighting the early stages of the program.
Sprouts’ primary goal as it evolves its loyalty program is to find the best way to gather customer data in order to create a personalized experience for loyalty members, Sinclair said.
“We’ve got a very unique proposition, and we want people to feel very special by being part of this kind of loyalty club,” Sinclair said.
