- Sales Growth: 17% increase in total sales, reaching $2.2 billion.
- Earnings Per Share (EPS): 44% growth in diluted EPS to $1.35.
- E-commerce Performance: 27% growth in e-commerce sales, representing 15% of total sales.
- Gross Margin Expansion: Gross margin improved to 38.8% due to inventory management.
- New Store Openings: 12 new stores opened, totaling 455 locations, with plans for 35 more in 2025.
Operational Highlights
The company opened 12 new stores during the quarter, ending with 455 locations. Sprouts is investing in its supply chain, with plans to expand capacity and insource fresh meat and seafood. The Sprouts Reward loyalty program was launched in Arizona, with positive results, and is expected to roll out nationwide by the end of October. According to Curtis Valentine, "We're excited about our new loyalty program, which will roll out in Q4 and drive comp in '26."
Guidance and Outlook
For 2025, Sprouts expects total sales growth of 14.5% to 16%, with comparable store sales growth between 7.5% and 9%. Earnings before interest and taxes are expected to be between $675 million and $690 million, and earnings per share between $5.20 and $5.32. The company has a strong balance sheet, with $261 million in cash and cash equivalents, and a new $600 million revolving credit facility.
Valuation and Growth Prospects
With a P/E Ratio of 31.04, P/B Ratio of 11.1, and P/S Ratio of 1.79, the market is pricing in significant growth expectations. The company's ROE of 36.53% and ROIC of 14.94% indicate strong profitability. Analysts estimate next year's revenue growth at 11.5%. The industry growth rate is expected to be around 5% to 6% through the end of the decade, and Sprouts' initiatives may drive a 7% comp over the next three years, as noted by Jack L. Sinclair, "Sprouts has a low share of wallet with its customer base and is ambitious to grow, driven by tailwinds in healthy eating and caring about food production."