PHOENIX - Sprouts Farmers (NASDAQ:SFM) Market, Inc. (NASDAQ: SFM) delivered robust first-quarter financial results, surpassing analyst expectations with a significant earnings and revenue beat, and provided an optimistic outlook for the second quarter and full year of 2024, sending shares up 3.69%.
The specialty food retailer reported a first-quarter EPS of $1.12, exceeding the analyst estimate of $1.00. Revenue also outperformed, reaching $1.88 billion against the consensus estimate of $1.85 billion. This represents a 9% increase from the $1.73 billion reported in the same quarter last year, with comparable store sales growth of 4.0%.
CEO Jack Sinclair attributed the strong performance to the company's strategic initiatives and the solid execution by team members. "We are reinforcing our position as a leading specialty food retailer as we build new stores in line with our growth plans," Sinclair said, underscoring the company's expansion efforts.
Looking ahead, Sprouts anticipates second-quarter comparable store sales growth of 3% to 4% and adjusted EPS between $0.75 and $0.79, which is above the analyst consensus of $0.72. For the full year, the company expects net sales growth of 7% to 8%, comparable store sales growth of 2.5% to 3.5%, and an adjusted EPS of $3.05 to $3.13, outpacing the consensus of $2.95.
The positive guidance, coupled with the earnings and revenue beat, fueled investor optimism, as reflected in the stock's upward movement. The company also highlighted its strong financial position, ending the quarter with $312 million in cash and cash equivalents and a $125 million balance on its $700 million revolving credit facility. During the quarter, Sprouts opened 7 new stores, bringing its total to 414 stores across 23 states.
In terms of capital allocation, Sprouts repurchased 958 thousand shares of common stock for a total investment of $60 million and generated cash from operations of $220 million, while investing $46 million in capital expenditures, net of landlord reimbursement.
The company's forward-looking statements come with the usual caveats of potential economic, competitive, and other uncertainties. However, Sprouts' current trajectory suggests a strong position to navigate these challenges and continue its growth momentum.
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