Sprouts Farmers Market says people are sticking with their diets despite higher food prices

By Bill Peters

'Whether it be keto or paleo or vegan or vegetarian or dairy or non-dairy plant-based ... if you get into that space in your food purchase, you can tend to stick with it,' CEO says

Shares of Sprouts Farmers Market Inc. jumped after hours on Monday after the wellness-focused grocery chain bumped its full-year outlook higher, as health-oriented shoppers weather higher grocery bills.

The company said it expected revenue growth of 9% to 10% and same-store sales growth of 4% to 5%, compared to forecasts in May for a 7% to 8% revenue gain and a 2.5% to 3.5% same-store sales increase.

Sprouts (SFM) also said it now expected adjusted earnings per share of $3.29 to $3.37 for the full year, up from the prior outlook for $3.05 to $3.13.

Shares jumped 15.2% after hours. The stock has run 75.9% higher so far this year.

The company issued the forecast as it tries to target health enthusiasts in more communities - through store openings, new higher-quality products, its loyalty program and in-store events.

Chief Executive Jack Sinclair said its customers hadn't been affected by higher grocery prices, which have hit lower-income shoppers harder.

"The thing we've always said is that the nature of our assortment, whether it's attribute-based - whether it be keto or paleo or vegan or vegetarian or dairy or non-dairy plant-based, all those trends - if you get into that space in your food purchase, you tend to stick with it, almost irrespective of what the broader economic circumstances around you are," he said during Sprouts' earnings call.

"And I think that's what's given us a little bit of a moat here in terms of our customer base and their dietary needs and their dietary requirements, however they're coming at it," he continued.

The company said that for the second quarter, sales jumped 12% to $1.9 billion. Same-store sales were up 6.7%. The company earned 94 cents a share. Those figures were above Wall Street's forecasts.

-Bill Peters

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

07-29-24 2044ET

Copyright (c) 2024 Dow Jones & Company, Inc.