How Forager Teams and Health-Minded Shoppers Are Driving Growth at Sprouts Farmers Market
Sprouts Farmers Market lived up to its name in the recently concluded second quarter, with shoots of growth across its business. Net sales rose 12% on a year-over-year (YoY) basis, while comps increased 6.7% in that time frame.
It was a good quarter based on other economic indicators, too. Diluted earnings per share (EPS) came in at $0.94, compared to $0.65 the prior year.
“Our enthusiastic customers continue to respond positively to our differentiated product assortment and unique shopping experience. As consumer preferences shift toward healthier living, we anticipate there we will be even more health enthusiasts than there are today,” said CEO Jack Sinclair during a July 29 earnings webcast.
The solid quarterly results reflect the retailer’s ongoing efforts to improve and expand its operations. According to Sinclair, the marketing team continues efforts to boost traffic through a media mix and a refinement of personalization tactics.
Sprouts is also in a two-market (Tucson, Ariz., and Nashville, Tenn.) testing phase of a new loyalty program that will further enhance personalization. “It’s very early days and there has been a lot of work behind the scenes to make sure the technology works efficiently but we are encouraged by the start,” reported Sinclair. “We have a unique proposition and we want people to feel special being part of this loyalty ‘club’, almost, as I’ve described it.”
Sprouts’ forager-driven approach to product assortment has also bolstered customer engagement. “Our foraging team has done an amazing job finding products that are not sold anywhere else. There are some entrepreneurs in the country who are bringing a lot of interesting things and we have become a go-to for people to bring products to the market,” Sinclair remarked, noting that the retailer’s “pitch slam” events with potential suppliers and visits to food shows around the country are broadening connections with promising brands.
More customers around the country can access the differentiated assortment at Sprouts, as the grocer expands its footprint. The company unveiled five new stores in the second quarter and plans to welcome shoppers to 35 new locations in total during FY2024. “Given our business momentum, we are eager to expand into more communities. We are dedicated to expanding our banner with over 110 approved new stores in the pipeline over the next few years,” Sinclair said.
[RELATED: Sprouts Farmers Market Accelerates Store Growth]
On that futuristic note, Sprouts shared its outlook for the full fiscal year. The company projects comp sales growth between 4% and 5%, with total sales growth landing between 9% and 10%.
Phoenix-based Sprouts employs about 32,000 associates and operates more than 400 stores in 23 states nationwide. The specialty retailer is No. 51 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America.
