Sprouts now delivering more groceries, growth

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Sprouts now delivering more groceries, growth

By Gina Acosta - 01/09/2018

Sprouts Farmers Market is proving that its business model is differentiated enough from other retailers that it can continue to outpace the industry in sales growth.

The company announced preliminary fourth quarter and 2017 earnings results ahead of its presentation at the 2018 ICR Conference. 

Sprouts said it expects to report same store sales growth of 4.6%. For the fiscal year ended Dec. 31, it expects to report net sales growth of 15.3%, same store sales growth of 2.9%, and earnings per share slightly above its previously announced guidance range of $0.98 to $0.99.  

"We are pleased to report that our strong performance continues, a direct result of our unique model offering health and value across the store, consistent execution and focus against our strategic initiatives,” said Amin Maredia, chief executive officer of Sprouts Farmers Market.

Sprouts also announced that it will expand home delivery service to its major markets across the country through a new partnership with Instacart.

Customers will be able to enjoy quick, convenient delivery of thousands of fresh, natural and organic products from Sprouts by simply visiting delivery.sprouts.com, the Instacart website or mobile app, where they can choose to have their groceries delivered same-day within one or two hours, or schedule a delivery for later in the week.

Sprouts, which currently offers home delivery in eight cities across the country, will roll out the Instacart service to markets in phases, starting with select zip codes in Phoenix and Tucson, Arizona today. Additional markets will be announced at a later date.

“We are excited to respond to customer demand for fast, convenient home delivery of their favorite Sprouts products in all of our major markets across the country,” said Maredia. “Home delivery is a natural way for Sprouts to engage with our customers on their healthy living journey, and our partnership with Instacart allows us to quickly scale for growth.”

The impressive sales growth and Instcart news comes on the heels of Sprouts announcing that it plans to open 30 new stores in 2018.

While many other retailers are scaling back plans for new stores, it seems the Arizona-based natural foods chain can't grow fast enough. It plans to open six new locations in the second quarter of 2018, and one of the six new stores will be located in Simpsonville, S.C. This store will be its first in South Carolina and represents Sprouts’ 16th state and the latest in the grocer’s eastern expansion efforts.

Sprouts says it will open approximately 30 new stores across the country in 2018, marking a near 11% increase in its footprint for the new year.

In 2018, Sprouts will also open stores in Maryland, Pennsylvania and Washington state, bringing its state count to 19 by the end of the year.

The Sprouts stores opening in the second quarter include:

  • Augusta, Ga. – 630 Crane Creek Drive
  • Charlotte, N.C. – 15121 Ballancroft Parkway
  • Lincoln, Calif. – 115 Ferrari Ranch Road
  • San Diego, Calif. – 8142 Mira Mesa Boulevard
  • Simpsonville, S.C. – 2200 Woodruff Road
  • Sparks, Nev. – 125 Disc Drive

Since opening its doors 15 years ago, Sprouts has appealed to shoppers interested in fresh, natural and organic products at value prices and is known for offering knowledgeable team members and a welcoming environment. A robust private label program and a balanced assortment are also helping Sprouts Farmers Market attract scores of shoppers despite increasing competition.

“Sprouts’ knowledgeable and friendly team members are the hallmark of our stores,” said Dan Sanders, chief operations officer. “We’re excited to meet our new neighbors in Simpsonville and introduce them to our fresh, natural and organic products at value prices across the store.”

In its latest fiscal quarter ended Oct. 1, Sprouts posted net sales of $1.2 billion; a 16% increase from the same period in 2016. Same sales growth was 4.6% and two-year comparable store sales growth was 5.9% in the third quarter. Net income was $31 million; a 32% increase from the same period in 2016. 

Sprouts also plans to focus on technology in 2018 and launch a new mobile app.

Headquartered in Phoenix, Ariz., Sprouts employs more than 27,000 team members and operates more than 280 stores in 15 states from coast to coast.