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Mar 29, 2020
Sprouts Q1 2020 Earnings Report
Reported a strong first quarter with significant sales growth and increased profitability.
Key Takeaways
Sprouts Farmers Market, Inc. reported a 16% increase in net sales to $1.6 billion for the first quarter of 2020. Comparable store sales grew by 10.6%. Net income increased to $92 million, with diluted earnings per share of $0.78.
Net sales increased by 16% to $1.6 billion.
Comparable store sales grew by 10.6%.
Net income reached $92 million, compared to $56 million in the same period of 2019.
Diluted earnings per share were $0.78, up from $0.46 in 2019.
Forward Guidance
Due to the COVID-19 crisis, the company is not reaffirming or stating a new outlook range, but expects to meet or exceed the previous annual outlook. The timing of investments to enhance team members pay and benefits, and to implement additional safety and cleansing measures will weigh heavier in the second quarter compared to the first quarter.
Positive Outlook
- Elevated levels of grocery spend have continued as many consumers have increased their food at home spend.
- Social distancing has changed consumer behavior from customers consolidating trips and increasing use of ecommerce services.
- Strategic initiatives around smarter promotions remain a benefit to operating margin.
- Continue to meet or exceed previous annual outlook.
- New store cash on cash returns of approximately 40%.
Challenges Ahead
- Lack of visibility for the remainder of 2020 with many unknowns.
- Significant investments in pay, benefits and safety measures
- Uncertainty as to when consumer behavior will return to normal or what may emerge as the ‘new normal’.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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