A Preview of Sprouts Farmers Market ahead of Its 2Q17 Results


Jul. 21 2017, Updated 10:26 a.m. ET

Sprouts Farmers Market’s 2Q17 results preview

Arizona-based Sprouts Farmers Market (SFM) is slated to release its 2Q17 results on Thursday, August 3, 2017. Wall Street predicts that its 2Q17 earnings should remain flat at $0.25 per share. Its total sales are expected to rise 12.9% YoY (year-over-year) to ~$1.2 billion. During 1Q17, the retailer delivered 10% EPS (earnings per share) growth to $0.33 on total sales of $1.1 billion, which represents 14% YoY EPS growth.

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About Sprouts Farmers Market

Established in 2002, Sprouts Farmers Market (SFM) operates as a value-oriented grocery retailer offering a range of natural and organic foods. The company operates close to 270 stores in 15 states. It follows a small-box format with an average store size of 28,000–30,000 square feet, which is about half the size of Whole Foods Market’s (WFM) stores and one-third the size of Kroger’s (KR) combination stores.

Valuations overview

Sprouts Farmers Market is trading at a one-year forward price-to-earnings ratio of 26.0x, which is near the upper end of its 52-week price-to-earnings (or PE) range of 20.1x–26.9x.

The company trades at a premium to grocery chains Kroger (KR) and Supervalu (SVU), which are valued at 11.2x and 9.0x, respectively. Whole Foods Market is the most expensive grocer and has a one-year forward earnings multiple of 32x.

Investors looking for diversified exposure to SFM through ETFs can choose to invest in the iShares Morningstar Small-Cap Growth ETF (JKK). SFM holds ~0.54% of its portfolio in JKK.

Series overview

In this series, we’ll preview Sprouts Farmers Market’s 2Q17 results. We’ll talk about the company’s year-to-date financial performance, discuss key drivers for the coming quarter, take a look at its stock market performance, and explore Wall Street’s view of the company.


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