Dive Brief:
- Sprouts Farmers Market reported strong third-quarter earnings with a net sales increase of 14%, to $1.9 billion, and comparable-store sales growth of over 8%, the specialty grocer announced Wednesday.
- Strong performance in its private label and e-commerce business as well as its ongoing store expansions fueled Sprouts’ robust quarterly growth, executives said during a call with investors.
- Sprouts has scaled back slightly on its new store expansion plan, bringing the number of new locations down from 35 to 33, due to the impact of Hurricane Milton.
Dive Insight:
Sprouts’ third-quarter results “surpass[ed] our expectations,” CEO Jack Sinclair said during the company’s earnings call, continuing the specialty grocer’s string of recent quarters with strong sales growth.
Sprouts’ same-store sales keep rising
E-commerce sales grew 36%, accounting for 14.5% of total sales for the quarter, while private label contributed 23%, CFO Curtis Valentine said during the call.
Social media marketing was also a significant driver for Sprouts’ performance this quarter, Sinclair said, noting the effort has attracted new customers, increased shopper retention and brought in younger consumers.
“Our team has brought our unique assortment and experience to life and has found willing partners with many influencers and celebrities whose products and purposes align with ours,” Sinclair said.
Hurricane Milton, which struck Florida earlier this month, has delayed two planned store openings in the state, according to the company. The two locations are now slated to open during the first quarter of 2025.
While still in the early stages, Sprouts plans to expand its loyalty program pilot beyond Tucson, Arizona, and Nashville, Tennessee, Sinclair said, noting the testing will expand to new, unnamed markets early next year.
Moving forward, the loyalty program’s advancements will focus on how to better engage customers to scan as well as sign up, Sinclair said, adding that by the end of 2025, Sprouts will also look for ways to “stimulate our customers to have more affinity to the Sprouts brand.”
