Sprouts Farmers Market (SFM) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 increased 12% year-over-year to $1.9 billion, with comparable store sales up 6.7% and diluted EPS up 32% to $0.94, driven by new store openings and omni-channel growth.

• E-commerce sales rose 30% and now represent 14% of total sales; Sprouts Brand contributed 22% of total sales.

• Opened 5 new stores in Q2, bringing the total to 419 stores in 23 states as of June 30, 2024.

• Strong performance across all geographies and categories, with increased customer frequency, new customer growth, and enhanced store experience.

• Continued focus on health enthusiast customers, differentiated product assortment, and smaller store formats for long-term growth.

Financial highlights

• Q2 2024 net sales: $1.9B (+12% YoY); gross profit: $718M (+15% YoY); gross margin: 37.9% (up 80 bps YoY).

• Net income for Q2 2024 was $95.3M, up from $67.3M in Q2 2023; diluted EPS: $0.94, up 32% year-over-year.

• Operating cash flow YTD: $311M; capital expenditures: $89M net of landlord reimbursement.

• SG&A: $556M, up $63M, with 20 basis points of deleverage due to strategic investments and new store openings.

• Share repurchases totaled $104M YTD; $585M–$600M remains under new authorization.

Outlook and guidance

• Full-year 2024 net sales growth expected at 9%-10%, with comparable store sales growth of 4%-5%.

• Plan to open approximately 35 new stores in 2024, most in Q4.

• Adjusted EBIT guidance: $445M–$455M; adjusted EPS: $3.29–$3.37; corporate tax rate ~25%.

• Capital expenditures (net): $225M–$245M; gross margin expected to remain elevated in H2.

• Q3 comp sales guidance: 3.5%-4.5%; adjusted EPS: $0.71–$0.75.