SFM’s Comps Growth to Remain Muted in Fiscal 2017


Apr. 26 2017, Updated 6:05 p.m. ET

What will drive sales in 2017?

Sprouts Farmers Market’s (SFM) management expects deflationary headwinds to continue at least in the first half of 2017. As a result, sales comps are expected decelerate further to the 0%–1% range.

The company aims to open 32 new stores in 2017, which would provide a necessary boost to its top line. Total sales are expected to rise around 12% to 13% in fiscal 2017.

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Sprouts expected to deliver best-in-class results

Wall Street’s estimates are in-line with management estimates of a 12.3% rise in fiscal 2017 sales to $4.5 billion. If the company meets these estimates, it could deliver one of the best performances in the grocery sector.

Supermarket giant Kroger’s (KR) sales are forecasted to rise 4.9% YoY (year-over-year) during the next fiscal year, while organic competitor Whole Foods Market (WFM) is expected to register a 3% YoY jump in its top line.

Analysts predict that SFM’s first quarter sales will grow at the predicted full-year growth pace. The top line is predicted to land at $1.1 billion, up 12.3% YoY. Margins are, however, expected to come under pressure, at least in the first half of the year. Read the next section for a look at the company’s expected profitability in 2017.

Investors looking to invest in SFM through ETFs can choose to invest in the First Trust Consumer Staples AlphaDEX Fund (FXG). SFM makes up approximately 3.2% in FXG.


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