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Sprouts Farmers Market Continues with Its Steady Top Line Growth in 2Q16

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Aug. 9 2016, Published 11:42 a.m. ET

Revenue increased by 14% in 2Q16

Sprouts Farmers Market (SFM) reported a 14.4% YoY (year-over-year) increase in its top line and touched the $1 billion figure in quarterly revenues for the first time in 2Q16.

The company has shown strong sales growth quarter-over-quarter despite the increasing competition in the natural and organic food industry. In comparison, competitor Whole Foods Market (WFM), which is considered to be the pioneer of the US natural and organic food segment, saw sales growing by just 2% in the last reported quarter.

While talking about the company’s performance in the first quarter, Amin Maredia, chief executive officer of Sprouts Farmers Market, commented, “Sprouts’ healthy living for less business continues to resonate with customers as we grow coast to coast”. 

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Maredia added, “Despite the deflationary environment, our team continues to produce solid comparable store sales growth through improved traffic of 3.5% and increased tonnage. We remain laser-focused on our strategic priorities to drive performance today while continuing to invest in team members, technology and infrastructure for sustainable long-term growth.”

Sprouts registers positive comps for the 37th consecutive quarter

Sprouts’s steady top line growth has been backed by a consistent performance in its sales comps. The company reported a 4.1% increase in comparable store sales, reporting its 37th consecutive quarter of positive same-store sales.

Sprouts’s performance is superior to almost all the big supermarkets and mass merchandisers. Kroger (KR), which has reported 50 consecutive quarters of positive identical supermarket sales growth (excluding fuel), saw identical sales growing by 2.4% during its last reported.

Whole Foods Market, whose sales have been under pressure for the last several quarters, has reported four consecutive quarters of negative same-store sales. Its comparable store sales were -2.6% for the three months ended July 3, 2016.

Supervalu’s (SVU) Retail Food segment also reported a 4.5% fall in identical store sales. The Save-A-Lot segment reported a 1.4% decline in the identical store sales in the last reported quarter.

Investors looking to invest in SFM through ETFs can choose to invest in the SPDR S&P Retail ETF (XRT). SFM has a weight of approximately 0.78% in XRT.

Read the next section to learn about Sprouts’s margins and profitability.

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