Sprouts Farmers Market has posted impressive results for the third quarter of 2024, exceeding its expectations with a 14% increase in sales compared to the same period last year. This growth included an 8.4% rise in comparable-store sales and a notable 40% increase in diluted earnings per share. Jack Sinclair, CEO of Sprouts, attributes this success to robust traffic growth both in-store and online, stating, “We remain confident in our long-term growth potential.”
During the third quarter, Sprouts achieved total sales of $1.9 billion, an increase of $232 million from the same quarter in 2023. Curtis Valentine, the CFO, reported that the rise in sales was driven equally by increased customer traffic and higher basket totals. Notably, e-commerce sales surged by 36%, representing 14.5% of total sales for the quarter. This trend underscores a growing consumer preference for online grocery shopping, bolstered by a shift toward food-at-home consumption and healthy living.
According to data from Placer.ai, the company’s foot traffic increased by 8.1% year-over-year in Q3, with the average visits per location rising by 2.6%. This trend persisted throughout the summer months, with substantial increases reported in both August and September. The rise in visits highlights Sprouts’ ability to attract and retain customers amidst a competitive grocery landscape.
To cater to its health-conscious clientele, Sprouts has expanded its assortment of unique products. This includes its store brands, which contributed 23% to total sales in the last quarter. The retailer introduced over 300 new Sprouts Brand items, including the recently launched Real Root by Sprouts product line, which features more than 130 premium body care and home fragrance goods. In addition to personal care items, the expansion of organic produce offerings has become a significant focus, with organic items now accounting for more than 46% of total produce sales, reflecting a shift in consumer preferences toward healthier choices.
In the meat department, Sprouts has made a strategic move by offering only non-antibiotic chicken and pasture-raised proteins. The grocer has also capitalized on the trend toward home cooking by enhancing its meal solutions across fresh and frozen departments. Sinclair expressed satisfaction with the collaborative efforts across various functions that have led to successful merchandising events and heightened customer engagement.
In-store experiences have been pivotal for Sprouts in Q3. The inaugural Sprouts Brand Discovery Days in July allowed customers to explore the latest trends and better-for-you products. This initiative was complemented by a back-to-school event focused on healthy snacks and lunch options for kids. Furthermore, social media engagement has played a critical role in promoting the brand, as the company collaborates with influencers and celebrities whose values align with those of Sprouts. This engagement has resulted in authentic customer posts that enhance the brand’s visibility and credibility.
Looking forward, Sprouts is currently testing a new loyalty program in Tucson, Arizona, and Nashville, Tennessee. Plans are in place to expand this test to additional markets in early 2025, with intentions of rolling it out broadly later that year. The company anticipates total sales growth of approximately 12% for the full year, along with comparable sales growth of about 7%. Adjusted earnings before interest and taxes are projected to be between $490 million and $495 million, with adjusted earnings per share ranging from $3.64 to $3.68.
In terms of capital expenditures, Sprouts expects to invest between $205 million and $215 million for the year. Although the company initially planned to open 35 new stores, it has adjusted this number down to 33 due to the impacts of Hurricane Milton, which delayed two store openings in Florida until 2025. Currently, Sprouts operates 428 locations across 23 states, employing approximately 33,000 associates.
As Sprouts continues to expand its footprint in the grocery sector, its commitment to providing healthier options to communities across the nation remains steadfast. With a strong focus on customer engagement, innovative product offerings, and an agile approach to market demands, Sprouts Farmers Market is well-positioned for ongoing success in the competitive grocery landscape.
