NASDAQ$SFM

Sprouts Farmers Market Inc. · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Reported a strong first quarter with significant sales growth and increased profitability.

Sprouts Farmers Market, Inc. reported a 16% increase in net sales to $1.6 billion for the first quarter of 2020. Comparable store sales grew by 10.6%. Net income increased to $92 million, with diluted earnings per share of $0.78.

  • Net sales increased by 16% to $1.6 billion.
  • Comparable store sales grew by 10.6%.
  • Net income reached $92 million, compared to $56 million in the same period of 2019.
  • Diluted earnings per share were $0.78, up from $0.46 in 2019.

Headline financials

Total Revenue

$1.65B

Previous: $1.41B+16.5%
EPS (adj)

$0.79

Previous: $0.46+71.7%
Comparable Sales Growth

10.6%

Previous: 12.0%-11.7%
Capital Expenditures

-$28M

Previous: -$30.1M+7.0%
Free Cash Flow

$63.8M

Previous: $26.3M+142.9%
Net Income

$91.8M

Previous: $56.4M+62.8%
Operating Income

$128M

Previous: $79.6M+60.4%
Gross Profit

$594M

Previous: $484M+22.6%
Cash & Equivalents

$247M

Previous: $19.5M+1167.1%
Total Assets

$2.86B

Previous: $2.62B+9.1%
Stock-Based Comp

$2.4M

Previous: $2.45M-2.0%

Revenue & EPS history

Sprouts · Revenue · Quarterly

$1.65B

Q1 2020+16.5%vs Q1 2019
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Forward guidance

Due to the COVID-19 crisis, the company is not reaffirming or stating a new outlook range, but expects to meet or exceed the previous annual outlook. The timing of investments to enhance team members pay and benefits, and to implement additional safety and cleansing measures will weigh heavier in the second quarter compared to the first quarter.

Tailwinds

  • Elevated levels of grocery spend have continued as many consumers have increased their food at home spend.
  • Social distancing has changed consumer behavior from customers consolidating trips and increasing use of ecommerce services.
  • Strategic initiatives around smarter promotions remain a benefit to operating margin.
  • Continue to meet or exceed previous annual outlook.
  • New store cash on cash returns of approximately 40%.

Headwinds

  • Lack of visibility for the remainder of 2020 with many unknowns.
  • Significant investments in pay, benefits and safety measures
  • Uncertainty as to when consumer behavior will return to normal or what may emerge as the ‘new normal’.
  • Timing of investments to enhance team members pay and benefits, and to implement additional safety and cleansing measures will weigh heavier in the second quarter compared to the first quarter.
  • Low single-digit comps.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+0.9%

Avg return

Earnings day

+1.9%

Avg return

5 days after

+4.8%

Avg return

30 days after

56%

30 / 54 earnings

Positive

+20.9%

Q3 2015

Best reaction

-25.9%

Q3 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+15.1%+10.7%+16.1%
Q4 2025-0.4%+8.7%+20.6%
Q3 2025-25.9%-20.0%-19.8%
Q1 2025+0.4%-0.9%+1.1%
Q4 2024-15.6%-11.0%-16.1%
Q3 2024+7.3%+10.1%+29.1%
Q2 2024+10.6%+12.7%+17.6%
Q1 2024+9.0%+13.6%+19.6%
Q4 2023+13.3%+15.8%+20.8%
Q3 2023-6.4%-3.9%-0.6%
Q2 2023-4.8%-3.2%+3.9%
Q1 2023+9.2%+5.1%-0.3%
Q4 2022+10.7%+7.6%+13.7%
Q3 2022+11.6%+14.8%+20.2%
Q2 2022+14.2%+11.4%+6.4%
Q1 2022-22.8%-19.0%-11.0%
Q4 2021+1.8%-1.0%+14.5%
Q3 2021+3.3%+4.1%+13.1%
Q2 2021+0.6%+4.3%+3.8%
Q1 2021-0.2%+4.2%+6.6%
Q3 2020-4.5%-8.9%+0.9%
Q2 2020-1.9%-6.6%-11.3%
Q1 2020+9.8%+15.7%+14.6%
Q4 2019+13.4%+5.6%+11.0%
Q3 2019+2.2%+6.0%+4.3%
Q2 2019+4.8%+5.0%+6.0%
Q1 2019+3.9%+4.7%-5.8%
Q4 2018-2.7%-3.4%-6.3%
Q3 2018-1.5%-2.5%-14.4%
Q2 2018+10.1%+10.7%+24.9%
Q1 2018-11.2%-11.1%-11.4%
Q4 2017-3.9%-1.1%-11.3%
Q3 2017+7.9%+7.3%+25.4%
Q2 2017-0.7%+1.5%-17.1%
Q1 2017+3.6%+2.5%+7.6%
Q4 2016+1.9%-2.8%+18.8%
Q3 2016-9.3%-9.4%-9.4%
Q2 2016-1.1%-3.5%-2.3%
Q1 2016-4.3%
Q4 2015+10.7%
Q3 2015+20.9%
Q2 2015-13.6%
Q1 2015-12.3%
Q4 2014-1.7%
Q3 2014+3.3%
Q2 2014-0.3%
Q1 2014-15.5%
Q1 2012+5.8%
Q4 2013+5.8%
Q3 2013-4.9%
Q3 2012-4.9%
Q4 2012+1.0%
Q2 2012+1.0%
Q2 2013+4.9%
Q1 2013

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