Supermarket Chain Sprouts Farmers Market Beats On Q3, Comps Up 3.9%, Picks New CFO

Sprouts Farmers Market, Inc SFM reported third-quarter FY23 sales growth of 7.7% year-on-year to $1.71 billion, beating the analyst consensus estimate of $1.68 billion.

Comparable store sales increased 3.9%. Gross profit for the quarter increased 7.2% to $625.4 million, and gross profit margin contracted 20 basis points to 36.5%.

Operating margin was 5.1%, and operating income for the quarter fell 3% to $87.6 million.

Adjusted EBITDA of $123.7 million increased 1.8% Y/Y. Adjusted EPS of $0.65 beat the analyst consensus of $0.62.

The company opened ten new stores, resulting in 401 stores in 23 states as of October 1, 2023.

The company held $252 million in cash and equivalents as of October 1, 2023. Cash flow from operating activities for the quarter amounted to $409 million.

Outlook: Sprouts Farmers sees FY23 adjusted EPS of $2.77 - $2.81 (prior view $2.68 - $2.76), above the consensus of $2.74; Net sales growth of 6.5% - 7% (previous view 5% - 6%).

The company expects Q4 adjusted EPS of $0.42 - $0.46 and comparable store sales growth of about 3%.

Management Change: Sprouts Farmers Market appointed Curtis Valentine as its chief financial officer, effective January 1, 2024. Valentine is currently Sprouts' senior vice president of finance and will succeed Lawrence Molloy, who previously announced his intention to retire as chief financial officer at the end of 2023.

Price Action: SFM shares traded lower by 5.48% at $40.97 on the last check Tuesday.