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Sprouts Farmers Market on track to double business in 5 years with innovation, new branding

30-Oct-2020 - Last updated on 30-Oct-2020 at 13:28 GMT

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Source: Sprouts Farmers Market

“We still have plenty of work to do to realize our five-year vision to double the size of our business, but I am more convinced than ever of our potential,” ​ after seeing third-quarter sales increase 9.5%, comp sales climb 4.2% and e-commerce outpace that of most others in the industry with a 337% increase, CEO Jack Sinclair told analysts earlier this week during the company’s third quarter earnings call.

While recognizing that the coronavirus pandemic has financially benefited Sprouts Farmers Market and allowed it to “fast forward certain aspects of its [five-year] strategic plan,” ​ Sinclair also attributed the retailer’s early success to innovative product launches, a new branding campaign and the rapid rollout of omni-channel offerings as part of its broader five-prong, five-year plan ​to improve its positioning.

Sinclair also acknowledged the contribution of the retailer’s essential employees “during this never-ending pandemic for providing services to our communities, taking care of our coworkers and delivering strong results to our shareholders.” ​

‘Innovation seekers are looking for taste & credibility’ ​

A potentially risky, but key component to Sprout’s growth is to target and better meet the needs of the health enthusiasts and innovation seekers, who make up the retailer’s core consumer base, and who Sinclair says he will pursue even if it means potentially sacrificing some value-oriented shoppers.

He added, in 2020 the company already has launched more than 3,500 new and unique products “focused purely on innovation and taste” ​ preferences of the retailer’s “desired customer base,” ​ including seasonal hatch chili items, chips that are grain-free, paleo and vegan-friendly, a private label vegan matcha latte protein powder, Remedy Organics’ cold brew coffee with MCT oil and other “differentiated plant-based, keto and private label” ​ products. The retailer also is exploring how best to develop a meal program.

Overall, Sinclair said, “innovation seekers are looking for taste and credibility from the retailer themselves… and we are going to be very different in those spaces and the format going forward.” ​

With these values in mind, Sinclair said Sprouts Farmers Market also has restructured its produce buying department to bring in new and innovative products, including new varietals before they become commoditized, such as an organic honeynut squash – the quantities of which are too low for many lot chains but which offer a “treasure hunt item” ​ for select Sprouts’ stores.

The retailer also is improving its produce selection with the addition of two new distribution centers in Colorado and Florida in 2021 that will allow it to more quickly deliver produce for a fresher presentation.

New branding focuses on farmers’ market experience, innovation ​

Sprouts also is more aggressively courting its core consumer through a multi-media marketing campaign launched in August with the tagline: Sprouts where goodness grows.

“The campaign, which includes our first mainstream commercial on farm fresh goodness, drives home our farmers’ market experience, by highlighting produce as the heart of our store, and inspires health enthusiasts and experience seekers to engage with our brand,” ​ Sinclair said.

So far, he added, the new branding “has been well received” ​ with digital impressions reaching more than 1.4 billion and more than 2 billion overall media impressions since launch.

The campaign also heavily relies on digital to communicate deals and new products in real time. While this has been effective and enticing target consumers, the digital focus has caused a slow down in purchases from highly price sensitive shoppers who hunted for deals in the print adds, acknowledged the retailer’s CFO Denise Paulonis.

Ecommerce ‘is more important than ever’ ​

As the company rebrands, it also is developing its ecommerce business with the third-quarter launch of delivery and curbside pickup through shop.sprouts.com.

The retailer initially struggled with how best to offer online shopping, but Sinclair said shop.sprouts.com is an ideal hybrid model that taps Instacart for order management technology but allows the retailer to leverage customer insights and does not require shoppers to have an Instacart account – creating a seamless Sprouts experience.

The approach seems to be going over well with consumers given it was one of the fastest growing e-commerce businesses in the second quarter, Sinclair said.

Ultimately, he noted, “it is more important than ever to have a full omnichannel offering as many customers use both in-store and online for their grocery needs,” ​ and they need options that complement each other.

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‘It’s a great proving ground’: Why food startups are flocking to Sprouts Farmers Market for their first major retail launches

sprouts farmers market business model

This month, direct-to-consumer ice cream startup Marco Ice Cream is hitting over 100 Sprouts Farmers Market stores. The brand, which launched online in August 2020, is hoping to make a national splash with its first major retail launch — and its founders believe Sprouts is the perfect retailer to take its presence to the next level.

“We’re trying to launch early where we think our best consumer is, which is the natural and specialty shopper who’s always discovering new brands to try,” Avery Henderson, co-founder and CMO of Marco Ice Cream, said. He also noted that as a higher-priced product, it’s much easier to build awareness among early adopters of premium brands. “Targeting the likes of Sprouts customers also helps our marketing dollars go further,” Henderson said.

It’s a growing sentiment among the founders of food and beverage startups, who say that Sprouts has catapulted to the top of their retail wishlist, ahead of even Whole Foods and Erewhon. At around 380 locations, Phoenix-based Sprouts is one of the largest grocery chains in the country that specializes in natural and organic foods. That makes Sprouts the ideal first partner for many startups operating in these categories, with founders saying that Sprouts’ buyers work quickly and are enthusiastic about innovative and better-for-your products. 

A few recent examples: Just months after launching on Amazon in June 2020, Poppi hit all Sprouts shelves, making it one of its first national chain launches for the prebiotic soda brand. Last November, pantry staples startup Voyage Foods launched at Sprouts, marking it as one of its first physical retail partnerships after selling online for a few months. Canned food startup Heyday Canning Co. also debuted at Sprouts last fall before entering Whole Foods in January, and is merchandised at the retailer’s innovation center. 

Sprouts did not return a request for comment on its strategy around scouting and working with new brands. But, in the last couple of years, one of Sprouts’ newer tactics appears to have been trying to woo some of these smaller, buzzy brands through new dedicated in-store sections touting these products. Sprouts started adding branded “ innovation centers ” within its newer store formats that opened in 2021 and 2022. The section is focused on a rotating selection of trending products and new-to-Sprouts brands. The dedicated hub displays the latest trending products and seasonal items from emerging brands.

Sprouts CEO Jack Sinclair said at the time that the goal of these innovation centers was to generate “buzz” and to underscore to shoppers that “there’s always something new to get excited about.”

The right customer demographic

Sprouts has been around for just about 20 years, having opened its first store in Chandler, Ariz. in 2002. Over the early years, the retailer was mostly concentrated in the Southwest and Western part of the country, but has been rapidly expanding in the South and Southeast for the past few years. The chain gained popularity among shoppers for its wide selection of organic produce and commitment to sustainability; as one small example of this dedication, Sprouts receipts are printed double-sided to save paper. The company went public in 2013, and has seen accelerated growth during the last few years. In its latest quarterly earnings last November, Sprouts reported $1.6 billion in total sales, a 5% increase over the previous year. Much of the growth was driven by new stores, with same-store comp sales increasing by 2.4%.

Today, Sprouts stores are located in over 270 cities across 23 states, making it a darling among food and beverage startups who want to make the step up from regional chains into a more national brand. 

Marco Ice Cream’s Henderson said that, so far, the company’s retail strategy has gradually revolved entering regional natural grocery chains. To date, these have included Gelson’s Markets in Los Angeles, Central Market in Texas and most recently, Whole Foods’ Rocky Mountain region last September. 

The Marco founders met Sprouts’ buyer at Expo West last year, and from there worked with brokerage Green Spoon Sales for Sprouts distribution. Earlier this month, the brand’s line of globally-inspired ice cream flavors entered 100 Sprouts doors in its first week, and is already available at all locations.

One tailwind that is working in Sprouts’ favor right now is that — at least according to the company —  Sprouts shoppers have shown resilience even amid rising inflation. In Sprouts’ latest quarterly earnings, CFO Chip Molloy noted that shoppers have cut back on the number of items-per-trip but are opting for more premium and higher priced products .

Another advantage to courting Sprouts early, Henderson said, is that the retailer typically takes on a brand and distributes it throughout several regions — quickly creating a large area of coverage. This is in contrast to Whole Foods Market’s strategy, for instance, whose buyers focus on expanding a brand regionally. “Whole Foods is very hard to get into nationally,” Henderson said.

“They’re also efficient with rollouts, and we had a diligent team stocking shelves within a week of launching there,” he said.

Henderson said that within his CPG circles, Sprouts is also known for trying to differentiate its shelves of emerging product categories. For example last year, sparkling water company Aura Bora released elderflower grapefruit — the best-selling flavor on its website — exclusively at Sprouts.    

Henderson added that a large chunk of Sprouts’ customer base clips the retailer’s digital coupons, which brands can participate in weekly. “They also have an influencer network of about 250 members, and brands can work with a coupon vendor to have them promote their products,” he said. 

Pecan-based milk brand PKN is another brand that recently launched at Sprouts. After entering over 200 Sprouts stores in December, the chain became PKN’s first national rollout. PKN first launched at select natural markets in California; these include Berkeley Bowl, Nugget Markets and Bristol Farms, followed by Foxtrot in cities like Chicago and Washington D.C. 

Since launch, Sprouts has become a top priority for the startup, said PKN founder and CEO Laura Shenkar. This has consisted of investing in a merchandising team to visit stores and paying for sales data through a third-party vendor. “We’ve sent out a team to speak to the dairy managers, and have their departments try our milk and talk to customers about it,” she said. 

Shenkar said, “[Sprouts] were always at the top of our wishlist,” and reiterated the visibility advantages that Marco Ice Cream saw in selling at Sprouts. “For one, the stores are also in many areas that aren’t dominated by Whole Foods,” she said – including growing affluent areas like Jacksonville, Fla. and Charlotte, NC. 

“Sprouts also has a very curated selection,” Shenkar explained. “Typically, an average Sprouts store has about 18,000 SKUs, compared to about 300,000 at Kroger.” 

For many brands, it can take months to work out all of the details associated with launching into a larger chain like Sprouts, like  securing enough manufacturing and fulfillment capacity, as well as connecting with the right buyers. But founders say it is worth the wait.

Lupii, a company that makes lupini bean-based protein bars and pastas, is launching its pasta at all Sprouts locations this April. Co-founder Alexandra Dempster told Modern Retail that as of last summer, Lupii’s bars were physically available at 50 Whole Foods locations in the Northeast. 

Dempster and co-founder Isabelle Steichen had been trying to enter a national retailer and were pitching Sprouts on the bars. Coincidentally, Lupii also debuted its plant-based pasta line in September, which was showcased at Plant Based World Expo in New York City. 

“Originally, we had been trying to get in touch with them about our bar line,” Steichen explained. “So we were very excited when the foraging team stopped by our booth.”

The Lupii launch was originally scheduled for March, but was pushed to April due to fulfillment challenges. “Now that we have a date lined up, we want to make sure our demo program is set up and are working with vendors that can help facilitate it,” Dempster said. Lupii is also in talks with other startups sold at Sprouts to collaborate on sampling, “like a sauce brand that works well with our pasta.”

While Sprouts has become known for seeking out young brands to stock its shelves, these founders say the entrance is just the beginning.

“You have to do well there,” Marco’s Henderson said, “which is not easy because there are a lot of new brands vying to be [at Sprouts].” However, he added that “it’s a great proving ground for a startup like us trying to show we can scale nationally.” 

PKN’s Shenkar said that for better-for-you or natural products, Sprouts is currently an important grocery retailer to court.  

“They are in the business of high quality products,” Shenkar said, adding that Sprouts buyers tend to understand startups’ missions, such as PKN’s sustainability efforts among alternative milk brands. “It’s an ideal retailer to help make a big deal out of our brand,” Shenkar said.

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Sprouts Farmers Market, Inc. – Strategy, SWOT and Corporate Finance Report

  • Published: August 2017
  • Report Code: EC81D0E4-83DE-4770-BC0C-1EDC399FDA06

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Sprouts Farmers Market, Inc. – Strategy, SWOT and Corporate Finance Report, is a source of comprehensive company data and information. The report covers the company's structure, operation, SWOT analysis, product and service offerings and corporate actions, providing a 360Ëš view of the company.

Key Highlights

Sprouts Farmers Market, Inc. (Sprouts or 'the company') is a grocery store engaged in offering natural and organic food. Its product offerings include fresh produce, bulk foods, vitamins and supplements, grocery, meat and seafood, deli, bakery, dairy, frozen foods, body care, and natural household items. The company primarily operates in the US. It is headquartered in Phoenix, Arizona and employed more than 20,000 people as of January 3, 2016.

– Large number of easy-to-grasp charts and graphs that present important data and key trends

Reasons to buy

Table of contents, list of tables.

Table 13: Sprouts Farmers Market, Inc.: Strategy and Operations

List of Figures

Figure 3: Sprouts Farmers Market, Inc.: Capital Raising by Deal Type (2013 – YTD*2017)

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  • Single User: $ 175 (A$7,290.07 AUD) -->
  • Enterprise: $ 525 (A$7,290.07 AUD) -->

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Sprouts Farmers Market, Inc. Reports Fourth Quarter and Full Year 2023 Results

Sprouts Farmers Market, Inc. (Nasdaq: SFM) today reported results for the 13-week fourth quarter and 52-week year ending December 31, 2023.

"Our fourth quarter performance demonstrates our continued strength as a leading specialty grocer," said Jack Sinclair, chief executive officer of Sprouts Farmers Market. "Our 2023 results exceeded our original expectations, with solid comparable sales each quarter, positive traffic, accelerating unit growth, and increasing customer engagement. I am confident our strategy and our passionate, dedicated team will continue to create shareholder value."

Fourth Quarter Highlights:

  • Net sales totaled $1.7 billion; an 8% increase from the same period in 2022
  • Comparable store sales growth of 3.3%
  • Diluted earnings per share of $0.49; compared to diluted earnings per share of $0.42 in the same period in 2022
  • Opened 6 new stores

Full Year 2023 Highlights:

  • Net sales totaled $6.8 billion; a 7% increase from 2022
  • Comparable store sales growth of 3.4%
  • Diluted earnings per share of $2.50; Adjusted diluted earnings per share of $2.84 (1) ; compared to diluted earnings per share of $2.39 in 2022
  • Opened 30 new stores, acquired 2 previously licensed stores, and closed 11 stores, resulting in 407 stores in 23 states as of December 31, 2023

______________________ (1) Adjusted diluted earnings per share, a non-GAAP financial measure, excludes the impact of certain special items. See the “Non-GAAP Financial Measures” section of this release for additional information about this item.

Leverage and Liquidity in 2023

  • Ended the year with $202 million in cash and cash equivalents and a $125 million balance on its $700 million revolving credit facility
  • Repurchased 5.9 million shares of common stock for a total investment of $203 million, excluding excise tax
  • Generated cash from operations of $465 million and invested $213 million in capital expenditures, net of landlord reimbursement

First Quarter and Full Year 2024 Outlook

The following provides information on our first quarter 2024 outlook:

  • Comparable store sales growth: 2.5% to 3.5%
  • Adjusted diluted earnings per share: $0.98 to $1.02

The following provides information on our full year 2024 outlook:

  • Net sales growth: 5.5% to 7.5%
  • Comparable store sales growth: 1.5% to 3.5%
  • Adjusted EBIT : $397 million to $412 million
  • Adjusted diluted earnings per share: $2.85 to $2.95
  • Unit growth: approximately 35 new stores
  • Capital expenditures (net of landlord reimbursements): $225 million to $245 million

Fourth Quarter and Full Year 2023 Conference Call

Sprouts will hold a conference call at 5:00 p.m. Eastern Standard Time on Thursday, February 22, 2024, during which Sprouts executives will further discuss fourth quarter and full year 2023 financial results.

A webcast of the conference call will be available through Sprouts’ investor relations webpage, accessible via the following link . Participants should register on the website approximately ten minutes prior to the start of the webcast.

A webcast replay will be available at approximately 8:00 p.m. Eastern Standard Time on Thursday, February 22, 2024. This can be accessed with the following link .

Important Information Regarding Outlook

There is no guarantee that Sprouts will achieve its projected financial expectations, which are based on management estimates, currently available information and assumptions that management believes to be reasonable. These expectations are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. See “Forward-Looking Statements” below.

Forward-Looking Statements

Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact (including, but not limited to, statements to the effect that Sprouts Farmers Market or its management "anticipates," "plans," "estimates," "expects," or "believes," or the negative of these terms and other similar expressions) should be considered forward-looking statements, including, without limitation, statements regarding the company’s outlook, growth, opportunities and long-term strategy. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this release. These risks and uncertainties include, without limitation, the company’s ability to execute on its long-term strategy; the company’s ability to successfully compete in its competitive industry; the company’s ability to successfully open new stores; the company’s ability to manage its growth; the company’s ability to maintain or improve its operating margins; the company’s ability to identify and react to trends in consumer preferences; product supply disruptions; equipment supply disruptions; general economic conditions that impact consumer spending or result in competitive responses; accounting standard changes; the current inflationary environment and future potential inflationary and/or deflationary trends; and other factors as set forth from time to time in the company’s Securities and Exchange Commission filings, including, without limitation, the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The company intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more information becomes available, except as required by law.

Corporate Profile

True to its farm-stand heritage, Sprouts offers a unique grocery experience featuring an open layout with fresh produce at the heart of the store. Sprouts inspires wellness naturally with a carefully curated assortment of better-for-you products paired with purpose-driven people. The healthy grocer continues to bring the latest in wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based and gluten-free. Headquartered in Phoenix, and one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States, Sprouts employs approximately 32,000 team members and operates more than 400 stores in 23 states nationwide. To learn more about Sprouts, and the good it brings communities, visit about.sprouts.com .

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), the company presents Adjusted gross margin, Adjusted EBITDA, Adjusted EBIT, and Adjusted diluted earnings per share. These measures are not in accordance with, and are not intended as alternatives to, GAAP. The company's management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the company, and certain of these measures may be used as components of incentive compensation.

The company defines EBITDA as net income before interest expense, provision for income tax, and depreciation, amortization and accretion. Adjusted gross margin, Adjusted EBITDA, Adjusted EBIT and Adjusted diluted earnings per share exclude the impact of certain specified special items. The Company has begun reporting these adjusted measures to provide additional information with respect to the impact of store closure costs and certain other items during the thirteen and fifty-two weeks ended December 31, 2023. There were no such material adjustments during the thirteen and fifty-two weeks ended January 1, 2023.

Non-GAAP measures are intended to provide additional information only and do not have any standard meanings prescribed by GAAP. Use of these terms may differ from similar measures reported by other companies. Because of their limitations, non-GAAP measures should not be considered as a measure of discretionary cash available to use to reinvest in the growth of the company’s business, or as a measure of cash that will be available to meet the company’s obligations. Each non-GAAP measure has its limitations as an analytical tool, and they should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP.

The following table shows a reconciliation of (i) Adjusted gross margin to gross margin, (ii) Adjusted EBITDA and Adjusted EBIT to net income and (iii) Adjusted diluted earnings per share to diluted earnings per share, in each case, for the thirteen and fifty-two weeks ended December 31, 2023 and January 1, 2023:

sprouts farmers market business model

Investor Contact: Susannah Livingston (602) 682-1584 [email protected]

Media Contact: [email protected]

View source version on businesswire.com: https://www.businesswire.com/news/home/20240222910337/en/

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Market Realist

A Must-Read SWOT Analysis of Sprouts Farmers Market

While Whole Foods Market is struggling at the hands of giants like Kroger and Wal-Mart, Sprouts has been growing steadily in same-store sales and margins.

Sonya Bells - Author

Nov. 20 2020, Updated 1:31 p.m. ET

Understanding SWOT

In this last part of our series, we’ll conduct a SWOT (strengths, weakness, opportunities, and threats) analysis on Sprouts Farmers Market (SFM) in an effort to evaluate the company’s outlook at the close of 2015.

Sprouts’ strengths

Sprouts has a strong business model. It sells highly demanded organic food products at prices that are comparable to regular groceries. The company’s strong business model is reflected by its solid growth despite rising competition in the grocery sector in general and in the organic food sector in particular. While Whole Foods Market (WFM) is struggling at the hands of giants like Kroger Company (KR) and Wal-Mart Stores (WMT) , Sprouts has been growing steadily in both same-store sales and margins over the years.

Sprouts’ weakness

While Kroger (KR) and Wal-Mart (WMT) offer amenities such as in-house pharmacy and fuel stations, Sprouts Farmers Market currently lacks them. Such amenities act as a big pull for customers who appreciate the convenience of shopping, purchasing medicines, and fueling up in one stop.

Opportunities moving forward

Sprouts has plans to grow to 1,200 stores in 15 years from its current store number of 216. If the company is able to achieve the target without losses in margins, then this would make it three times as big as Whole Foods, which currently has more than 400 stores. Kroger currently has more than 3,700 stores.

Threats to Sprouts

Since Sprouts operates primarily in the organic food segment, it’s subject to fierce and rising competition from all corners. On the one hand, traditional grocers such as Kroger (KR) are increasing their range of natural and organic foods offerings and capturing market share, while on the other hand, existing players such as Whole Foods are launching new formats such as “365” to survive the competition. The 365 format is the budget-friendly version of the traditional Whole Foods store and poses direct competition for Sprouts.

ETF exposure

Whole Foods Market (WFM) , Wal-Mart Stores (WMT) , Kroger Company (KR) , and Sprouts Farmers Market (SFM) are a part of the SPDR S&P Retail ETF (XRT) . Together, these companies account for approximately 4.1% of the fund’s total holdings.

For more updates and analysis, please visit our Supermarkets Page.

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sprouts farmers market business model

Sprouts Farmers Market, Inc. (SFM) Soars to 52-Week High, Time to Cash Out?

H ave you been paying attention to shares of Sprouts Farmers (SFM) ? Shares have been on the move with the stock up 4% over the past month. The stock hit a new 52-week high of $53.6 in the previous session. Sprouts Farmers has gained 10.3% since the start of the year compared to the 5.2% move for the Zacks Retail-Wholesale sector and the 7.1% return for the Zacks Food - Natural Foods Products industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2023, Sprouts Farmers reported EPS of $0.65 versus consensus estimate of $0.62.

For the current fiscal year, Sprouts Farmers is expected to post earnings of $2.83 per share on $6.83 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $3.02 per share on $7.25 billion in revenues. This represents a year-over-year change of 1.2% and 6.19%, respectively.

Valuation Metrics

Sprouts Farmers may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Sprouts Farmers has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 18.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 17X. On a trailing cash flow basis, the stock currently trades at 11.1X versus its peer group's average of 11.1X. Additionally, the stock has a PEG ratio of 2.15. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Sprouts Farmers currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Sprouts Farmers passes the test. Thus, it seems as though Sprouts Farmers shares could have a bit more room to run in the near term.

How Does SFM Stack Up to the Competition?

Shares of SFM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Sovos Brands, Inc. (SOVO) . SOVO has a Zacks Rank of # 2 (Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of B.

Earnings were strong last quarter. Sovos Brands, Inc. beat our consensus estimate by 25%, and for the current fiscal year, SOVO is expected to post earnings of $0.85 per share on revenue of $999.45 million.

Shares of Sovos Brands, Inc. have gained 1.3% over the past month, and currently trade at a forward P/E of 26.34X and a P/CF of 22.5X.

The Food - Natural Foods Products industry is in the top 16% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SFM and SOVO, even beyond their own solid fundamental situation.

To read this article on Zacks.com click here.

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IMAGES

  1. A Closer Look at Sprouts Farmers Market’s Business Strategies

    sprouts farmers market business model

  2. A Key Business Overview of Sprouts Farmers Market

    sprouts farmers market business model

  3. Sprouts Farmers Market Stock Offers Growth And Strong Buybacks

    sprouts farmers market business model

  4. Sprouts Farmers Market: Execution And Growth

    sprouts farmers market business model

  5. Sprouts Farmers Market CEO talks strategy and the future

    sprouts farmers market business model

  6. Sprouts Farmers Market debuts new look, part of 20-store expansion

    sprouts farmers market business model

COMMENTS

  1. Opportunity Is Sprouting At Sprouts Farmers Market

    Sprouts Farmers Market, Inc. (SFM) is this week's Long Idea. This stock offers excellent risk/reward based on Sprouts': Strong growth opportunities for same stores and new stores. Sharp focus ...

  2. Sprouts Farmers Market unveils 'transformational strategy' that builds

    Many of the changes in consumer behavior and purchasing at grocery stores due to the ongoing pandemic, including preferences for e-commerce, smaller stores and healthier food, are the cornerstones...

  3. Sprouts Farmers Market on track to double business in 5 years with

    Encouraged by strong third-quarter sales online and in stores as well as net sales in the period that grew twice that of a year ago, Sprouts Farmers Market is "financially stronger than...

  4. Sprouts Farmers Market Is Improving Profits And Creating ...

    Despite missing top-line estimates in 3Q21 and giving back some of the pandemic-induced sales of 2020, this company is more profitable than it was pre-pandemic and is expanding its reach in the...

  5. Why food startups are flocking to Sprouts for retail launches

    The right customer demographic Sprouts has been around for just about 20 years, having opened its first store in Chandler, Ariz. in 2002. Over the early years, the retailer was mostly concentrated in the Southwest and Western part of the country, but has been rapidly expanding in the South and Southeast for the past few years.

  6. Mapping Sprouts' ambitious growth plan

    Sprouts Farmers Market's U.S. footprint Sprouts focused much of its early growth on the West Coast but has gradually moved east in recent years. In addition to finding markets with its target consumers, Sprouts also seeks out regions that are conducive to its 20,000 to 25,000-square-foot small store format, which the grocer is focusing on ...

  7. Sprouts Farmers Market CEO talks strategy and the future

    Smaller but surer As Sprouts continues with its plans to open 20 new stores this year — filling in key markets such as California, Texas and Georgia and building out in new areas including the...

  8. Sprouts Farmers Market: The Strategic Plan Is Showing Results

    Business Overview Sprouts Farmers ( NASDAQ: SFM) is a supermarket chain with a primary focus on offering local, organic and fresh food. It was founded in Arizona in 2002, making it relatively...

  9. Sprouts Farmers Market: Strong Growth With A Margin Of Safety

    Philip Eriksson 1.29K Follower s Follow Summary Using company guidance and store economics, I have created a simple valuation model for Sprouts' 10-year growth trajectory. The main components...

  10. PDF Investor Deck

    •A farmers market experience -open layout of fresh produce at the heart of the store, community feel, treasure ... WHY INVEST IN SPROUTS? A POWERFUL GROWTH BUSINESS. 0% 20% 40% 60% 80% 2016 2018 2020 Food Waste Recovery Rate ... • Hybrid produce buying model -centralized and regional teams allow us to be flexible

  11. A Closer Look at Sprouts Farmers Market's Business Strategies

    In this part of our series, we'll look at Sprouts Farmers Market's (SFM) business strategies, focusing on Sprouts' private label strategies, pricing strategies, and marketing strategies....

  12. Sprouts Farmers Market moves forward with new stores, strategy

    Sprouts Farmers Market continues to move forward on its strategic plan, even as second-quarter sales were disappointing, company executives said after earnings were released Thursday...

  13. Sprouts Farmers Market, Inc.

    Reasons to buy - Gain understanding of Sprouts Farmers Market, Inc. and the factors that influence its strategies. - Track strategic initiatives of the company and latest corporate news and actions. - Assess Sprouts Farmers Market, Inc. as a prospective partner, vendor or supplier.

  14. Why Sprouts Farmers Market Can Be a Great Long-Term Holding

    The business model Sprouts is a grocery chain with a focus on natural foods that are also affordable. This combination has been its main selling point to customers since it opened its first...

  15. The New Stores on Tap for Sprouts Farmers Market

    Staying true to its farmstand heritage, the grocer is invested in serving the communities where it operates by working with local farmers. Sprouts' business model is paying off, as shown by its recent third-quarter financials. The specialty grocer's net sales totaled $1.7 billion, a 7.6% increase from the same period in 2022.

  16. Sprouts Farmers Market, Inc. Reports Fourth Quarter and Full Year 2023

    Sprouts will hold a conference call at 5:00 p.m. Eastern Standard Time on Thursday, February 22, 2024, during which Sprouts executives will further discuss fourth quarter and full year 2023 ...

  17. Sprouts: A Bulletproof Business Model For The Next Recession (NASDAQ

    2.88K Follower s Follow Summary The U.S. economy is on shaky ground; now is the time to position for the upcoming recession. Sprouts Farmers Market is a well-run, highly profitable company in...

  18. Sprouts records strong Q4 sales, plots growth for 2024

    Dive Brief: Sprouts Farmers Market reported strong fourth-quarter results on Thursday, as the specialty grocer saw net sales increase 8% year over year, to $1.7 billion, and generated a 3.3% increase in comparable-store sales.; The chain's digital sales increased 17% during Q4, representing 12.4% of total sales. Sprouts' shares have powered ahead over the past few months as its business ...

  19. Sprouts Farmers Market targets growth via loyalty, private label

    Sprouts Farmers Market opened a total of 30 new stores and its network currently stands at 407 locations in 23 states. Growth will continue for the retailer over the next year.

  20. A Porter's Five Forces Analysis of Sprouts Farmers Market

    Porter's Five Forces Model is used to assess the nature of competition and attractiveness of an industry. According to the model, the attractiveness of any industry can be gauged by evaluating...

  21. A Must-Read SWOT Analysis of Sprouts Farmers Market

    Opportunities moving forward. Sprouts has plans to grow to 1,200 stores in 15 years from its current store number of 216. If the company is able to achieve the target without losses in margins ...

  22. Sprouts accelerates rollout of smaller stores

    Dive Brief: Sprouts Farmers Market intends this year to significantly sharpen its focus on the smaller store format the specialty grocery chain detailed at the start of the pandemic, executives said Thursday during an earnings call.; Sprouts plans to open at least 30 new stores in 2023, all of which will be based on the less expansive design it has been developing over the past few years, CFO ...

  23. Sprouts Farmers Market Inc Reports Solid Growth in Q4 and Full Year

    Sprouts Farmers Market Inc released its 8-K filing on February 22, 2024, detailing its financial performance for the fourth quarter and full year of 2023. The company, a leading American specialty ...

  24. Sprouts Farmers Market to Open 35 New Stores This Year

    Sprouts Farmers Market Inc. has high expectations for 2024. Amid the release of its impressive results for its fourth quarter and fiscal year ending Dec. 31, results, the specialty grocer released its outlook for the year. ... In 2023, Sprouts opened 30 new stores, acquired two previously licensed stores and closed 11 stores, resulting in 407 ...

  25. Sprouts Farmers Market, Inc. (SFM) Soars to 52-Week High, Time to Cash Out?

    Sprouts Farmers has gained 10.3% since the start of the year compared to the 5.2% move for the Zacks Retail-Wholesale sector and the 7.1% return for the Zacks Food - Natural Foods Products industry.

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  27. Sprouts Farmers Market, Inc. 2023 Q4

    The following slide deck was published by Sprouts Farmers Market, Inc.

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