Phoenix, AZ—Sprouts Farmers Market, Inc. has reported results for its second quarter ended June 28, 2020, in a press release.
- Net sales of $1.6 billion, a 16% increase from the same period in 2019
- Comparable store sales growth of 9.1% and two-year comparable store sales growth of 9.2%
- Net income of $67 million and adjusted net income of $70 million, compared to net income and adjusted net income of $35 million from the same period in 2019
- Diluted earnings per share of $0.57 and adjusted diluted earnings per share of $0.59, compared to $0.30 diluted and adjusted diluted earnings per share from the same period in 2019
- 6 new stores were opened; Sprouts now has 350 stores in 23 states.
The release explains that net sales growth was driven by continued demand due to COVID-19. Sprouts has also made “strategic changes” in the company’s promotional activities, the press release says, and has cycled deep promotions from the previous year. Sprouts has lowered marketing expenses by shifting from print marketing to digital.
Selling, general, and administrative expenses for the quarter increased $489 million—an increase of $106 million, bringing it to 29.8% of sales—due to team member bonuses and higher operational expenses due to COVID.
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Sprouts expects sales to continue to grow. The release notes that customers are eating at home more often; as such, comparable store sales for the month of July are expected to show an increase of approximately 9% compared to the same period last year. E-commerce sales are estimated to represent around 11% of net sales.
“I am proud of how our Sprouts team members have navigated these unprecedented circumstances we live in today. Our culture rooted in respect, inclusion and caring for one another has shone through in everything our team members do for our customers and for each other,” said Jack Sinclair, CEO of Sprouts Farmers Market, in the release. “Our strong second quarter performance was driven by the strategic changes we have begun to implement across our business and the continued positive impact on demand from the COVID-19 pandemic. As we head into the second half of the year, our early strategic wins give me confidence in our long-term direction, and our team members’ dedication assures me we will continue to provide our communities and customers healthy food for their families.”
“The trajectory of the COVID-19 situation remains uncertain, clouding the impact to the food retail industry over the coming quarters,” added Denise Paulonis, CFO of Sprouts Farmers Market. “While our sales continue at elevated levels, so do additional costs associated with our team members and stores. Predicting specific outcomes remains difficult, and accordingly we are not stating a new outlook range. We remain confident in the financial strength of our business and our new long-term growth strategy presented last quarter.”