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Sprouts Farmers Market’s Earnings to Remain Flat in 1Q17

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Apr. 26 2017, Published 6:48 p.m. ET

Sprouts Farmers Market’s 1Q17 results preview

Phoenix-based Sprouts Farmers Market (SFM) is slated to release its financial results for 1Q17 on Thursday, May 4, 2017. The results relate to the three-month period ending April 2, 2017.

Wall Street is predicting flat earnings of 30 cents per share in 1Q17. Total sales are expected to rise 12.3% YoY (year-over-year) to $1.1 billion.

The company delivered an earnings beat in three of the four quarters last year. However, it fumbled twice on top-line expectations.

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About Sprouts Farmers Market

Established in 2002, Sprouts Farmers Market (SFM) operates as a value-oriented healthy grocery store offering a range of natural and organic foods. The company operates 255 stores in 13 US states. It follows a small-box format with an average store size of 28,000 to 30,000 square feet, about half the size of Whole Foods (WFM) stores and one-third the size of Kroger’s (KR) combination stores.

Valuation overview

Sprouts Farmers is currently trading at a one-year forward price-to-earnings (or PE) multiple of 25.6x, operating close to the lower end of its 52-week PE range of 20.1x–29.7x.

The company continues to trade at a premium to supermarket chains Kroger (KR) and Supervalu (SVU), which are valued at 13.7x and 11x, respectively. It, however, trades at a slight discount to Whole Foods Market (WFM), which is currently valued at 27.3x.

Investors looking to invest in SFM through ETFs can choose to invest in the iShares Morningstar Small-Cap Growth ETF (JKK). SFM makes up approximately 0.5% in JKK.

What’s in this series?

In this series, we’ll preview SFM’s 1Q17 results. We’ll discuss the company’s recent financial performance, evaluate key revenue drivers, and discuss the company’s guidance and Wall Street estimates for the next quarter. We’ll also briefly touch upon SFM’s stock market performance, current valuations, and Wall Street recommendations.

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