Sprouts Tops Expectations Once Again in 3Q17

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Sprouts Tops Expectations Once Again in 3Q17 PART 1 OF 5

Sprouts Tops Expectations Once Again in 3Q17

Series snapshot

Arizona-based Sprouts Farmers Market (SFM) reported results for 3Q17 on Thursday, November 2, 2017. The results relate to the quarter ending October 1, 2017. As in the first two quarters of the current fiscal year, SFM did better than the Wall Street revenue and earnings expectations. Total sales rose 16% YoY (year-over-year) to $1.2 million, $23 million more than the consensus estimates. Earnings per share rose 44% YoY to $0.23, beating the consensus by five cents.

Sprouts Tops Expectations Once Again in 3Q17

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The company also raised guidance for full fiscal 2017.

Valuations and recommendations overview

SFM trades at a one-year forward price-to-earnings (or PE) ratio of 19x versus a three-year average of 27x. The company, however, trades at a premium to supermarket chains Kroger (KR) and Supervalu (SVU), which are valued at 11x and 7x, respectively.

52% of the 23 analysts covering SFM have rated it as a “buy,” while 48% have recommended a “hold” on it. There aren’t any “sell” recommendations on the stock.

About Sprouts Farmers Market

Established in 2002, Sprouts Farmers Market (SFM) operates as a value-oriented healthy food retailer, offering a range of natural and organic foods. The company operates 285 stores in 15 US states as of November 2, 2017. Investors looking to invest in SFM through ETFs can choose to invest in the PowerShares Dynamic Food & Beverage Portfolio (PBJ). SFM has a weight of approximately 2.3% in PBJ.

This series

This series is an overview of Sprouts Farmers Market’s 3Q17 results. Throughout the series, we’ll talk about the company’s financial performance during the quarter, discuss key revenue drivers, its year-to-date stock market performance, and Wall Street recommendations.


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