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Sprouts Farmers (SFM) Marches Ahead of Industry: Here's Why
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Sprouts Farmers Market, Inc. (SFM - Free Report) , one of the recognized names in the grocery space, has exhibited a decent run on the bourses in the past six months. Thanks to its operational initiatives — strengthening omni-channel solutions, expanding customer reach and focusing on private-label offerings — the stock has outpaced the Zacks Food-Natural Foods Products industry. In the said period, shares of this Zacks Rank #2 (Buy) company have surged about 41.3% compared with the industry’s growth of 13.1%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimates for the current and next financial year have increased about 5.2% and 4.4% to $2.21 and $2.36, respectively, over the past 60 days. The company’s long-term earnings growth rate of 7.3% highlights its inherent strength.
Let’s Delve Deeper
In an effort to expand its customer base, Sprouts Farmers has been taking several initiatives focused on product innovation, customer experience, and targeted marketing with everyday great pricing and technology. It is steadily expanding its presence in the natural organic space, given the huge demand in the segment. It has been lowering operational complexity, optimizing production, improving in-stock position and updating to smaller format stores.
Apart from these, the company is trying to expand private-label offerings in departments under the Sprouts Market Corner Deli, The Butcher Shop at Sprouts and Sprouts Fish Market brands. Product innovation continues to drive sales of private label items. Private label sales penetration increased to 16.1% in 2021 from 15.8% in 2020. The company introduced more than 5,700 new products in 2021.
Image Source: Zacks Investment Research
Sprouts Farmers is focused on creating a robust omni-channel experience for customers. The company has been providing hassle-free shopping through the Sprouts.com website and mobile app as well as creating a supply chain that provides the freshest produce while also updating store prototypes. We note that an in-store Pick-up & Delivery facility is available to all customers in all stores and markets. E-commerce penetration increased to 10.8% in 2021 from 9.4% in 2020.
For 2022, management forecast net sales growth of 4-6% and comparable store sales growth to be 0-2%. It projected earnings in the band of $2.14-$2.24 per share, which suggests an increase from earnings of $2.10 per share reported in 2021.
Kroger, the renowned grocery retailer, sports a Zacks Rank #1 (Strong Buy) at present. The company has an expected EPS growth rate of 9.9% for three-five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year sales suggest growth of 2.4% from the year-ago reported number. KR has a trailing four-quarter earnings surprise of 22.1%, on average.
General merchandise retailer Target currently carries a Zacks Rank #2. TGT has an expected EPS growth rate of 16.5% for three-five years.
The Zacks Consensus Estimate for Target’s current financial-year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the corresponding year-ago period’s levels. TGT has a trailing four-quarter earnings surprise of 21.3%, on average.
Tractor Supply Company, a rural lifestyle retailer in the United States, carries a Zacks Rank of 2 at present. TSCO has an expected EPS growth rate of 9.8% for three-five years.
The Zacks Consensus Estimate for Tractor Supply Company’s current financial-year sales and EPS suggests growth of 8.1% and 8.9%, respectively, from the corresponding year-ago period’s actuals. TSCO has a trailing four-quarter earnings surprise of 22%, on average.
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Sprouts Farmers (SFM) Marches Ahead of Industry: Here's Why
Sprouts Farmers Market, Inc. (SFM - Free Report) , one of the recognized names in the grocery space, has exhibited a decent run on the bourses in the past six months. Thanks to its operational initiatives — strengthening omni-channel solutions, expanding customer reach and focusing on private-label offerings — the stock has outpaced the Zacks Food-Natural Foods Products industry. In the said period, shares of this Zacks Rank #2 (Buy) company have surged about 41.3% compared with the industry’s growth of 13.1%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimates for the current and next financial year have increased about 5.2% and 4.4% to $2.21 and $2.36, respectively, over the past 60 days. The company’s long-term earnings growth rate of 7.3% highlights its inherent strength.
Let’s Delve Deeper
In an effort to expand its customer base, Sprouts Farmers has been taking several initiatives focused on product innovation, customer experience, and targeted marketing with everyday great pricing and technology. It is steadily expanding its presence in the natural organic space, given the huge demand in the segment. It has been lowering operational complexity, optimizing production, improving in-stock position and updating to smaller format stores.
Apart from these, the company is trying to expand private-label offerings in departments under the Sprouts Market Corner Deli, The Butcher Shop at Sprouts and Sprouts Fish Market brands. Product innovation continues to drive sales of private label items. Private label sales penetration increased to 16.1% in 2021 from 15.8% in 2020. The company introduced more than 5,700 new products in 2021.
Image Source: Zacks Investment Research
Sprouts Farmers is focused on creating a robust omni-channel experience for customers. The company has been providing hassle-free shopping through the Sprouts.com website and mobile app as well as creating a supply chain that provides the freshest produce while also updating store prototypes. We note that an in-store Pick-up & Delivery facility is available to all customers in all stores and markets. E-commerce penetration increased to 10.8% in 2021 from 9.4% in 2020.
For 2022, management forecast net sales growth of 4-6% and comparable store sales growth to be 0-2%. It projected earnings in the band of $2.14-$2.24 per share, which suggests an increase from earnings of $2.10 per share reported in 2021.
3 More Stocks Looking Red Hot
Here we highlight three other top-ranked stocks, namely, Kroger (KR - Free Report) , Target (TGT - Free Report) and Tractor Supply Company (TSCO - Free Report) .
Kroger, the renowned grocery retailer, sports a Zacks Rank #1 (Strong Buy) at present. The company has an expected EPS growth rate of 9.9% for three-five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year sales suggest growth of 2.4% from the year-ago reported number. KR has a trailing four-quarter earnings surprise of 22.1%, on average.
General merchandise retailer Target currently carries a Zacks Rank #2. TGT has an expected EPS growth rate of 16.5% for three-five years.
The Zacks Consensus Estimate for Target’s current financial-year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the corresponding year-ago period’s levels. TGT has a trailing four-quarter earnings surprise of 21.3%, on average.
Tractor Supply Company, a rural lifestyle retailer in the United States, carries a Zacks Rank of 2 at present. TSCO has an expected EPS growth rate of 9.8% for three-five years.
The Zacks Consensus Estimate for Tractor Supply Company’s current financial-year sales and EPS suggests growth of 8.1% and 8.9%, respectively, from the corresponding year-ago period’s actuals. TSCO has a trailing four-quarter earnings surprise of 22%, on average.