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Sprouts Farmers' (SFM) Operational Efforts Help Widen Spectrum
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In recent years, a major transformation has been seen in the grocery industry due to increasing e-commerce penetration, changing consumer behavior and stiff competition. Sprouts Farmers Market, Inc. (SFM - Free Report) , being laser-focused, has been redefining strategies and upgrading capabilities to stay ahead of the curve. Quality, price, customer shopping experience and real estate selections have been the key areas of focus.
Let’s Introspect
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 reducing operational complexity, optimizing production, improving the 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 and The Butcher Shop at Sprouts. Product innovation continues to drive sales of private-label items.
Image Source: Zacks Investment Research
Sprouts Farmers is focused on creating a robust omnichannel experience for customers. The company has been providing hassle-free shopping through the Sprouts.com website and the mobile app and creating a supply chain that provides the freshest produce while updating store prototypes. Sprouts Farmers is gradually heading toward its strategic goal of 10% unit growth per year. It currently intends to open 30 new stores in 2023.
Sprouts Farmers’ partnership with Instacart and DoorDash enables it to enter new marketplaces and strengthen e-commerce growth. It has rolled out the grocery pickup service at all its stores. The home delivery business is also available at the company’s stores. In the fourth quarter of 2022, e-commerce sales grew 16.5%, representing 11.4% of total sales.
Bottom Line
Sprouts Farmers has been strengthening omnichannel solutions, expanding its customer reach and focusing on private-label offerings to gain market share. For 2023, management envisions net sales growth of 4-6% and comparable store sales to increase in the low-single digits. It expects adjusted earnings in the band of $2.41-$2.53 per share for 2023, up from the $2.39 reported in 2022.
Shares of this Zacks Rank #2 (Buy) company have risen 22.7% in the past six months compared with the industry’s growth of 27.3%.
Other Stocks Looking Red Hot
Here we have highlighted three other top-ranked stocks, namely Kroger (KR - Free Report) , BJ's Wholesale Club (BJ - Free Report) and General Mills (GIS - Free Report) .
Kroger, which operates as a supermarket operator, currently sports a Zacks Rank #1 (Strong Buy). The expected EPS growth rate for three to five years is 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.6%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
BJ's Wholesale Club, which operates warehouse clubs, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 9.3%.
The Zacks Consensus Estimate for BJ's Wholesale Club’s current financial-year sales and earnings suggests growth of 7.3% and 0.8% from the year-ago period. BJ has a trailing four-quarter earnings surprise of 19.6%, on average.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial-year sales and earnings suggests growth of 6.3% and 7.4% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
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Sprouts Farmers' (SFM) Operational Efforts Help Widen Spectrum
In recent years, a major transformation has been seen in the grocery industry due to increasing e-commerce penetration, changing consumer behavior and stiff competition. Sprouts Farmers Market, Inc. (SFM - Free Report) , being laser-focused, has been redefining strategies and upgrading capabilities to stay ahead of the curve. Quality, price, customer shopping experience and real estate selections have been the key areas of focus.
Let’s Introspect
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 reducing operational complexity, optimizing production, improving the 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 and The Butcher Shop at Sprouts. Product innovation continues to drive sales of private-label items.
Image Source: Zacks Investment Research
Sprouts Farmers is focused on creating a robust omnichannel experience for customers. The company has been providing hassle-free shopping through the Sprouts.com website and the mobile app and creating a supply chain that provides the freshest produce while updating store prototypes. Sprouts Farmers is gradually heading toward its strategic goal of 10% unit growth per year. It currently intends to open 30 new stores in 2023.
Sprouts Farmers’ partnership with Instacart and DoorDash enables it to enter new marketplaces and strengthen e-commerce growth. It has rolled out the grocery pickup service at all its stores. The home delivery business is also available at the company’s stores. In the fourth quarter of 2022, e-commerce sales grew 16.5%, representing 11.4% of total sales.
Bottom Line
Sprouts Farmers has been strengthening omnichannel solutions, expanding its customer reach and focusing on private-label offerings to gain market share. For 2023, management envisions net sales growth of 4-6% and comparable store sales to increase in the low-single digits. It expects adjusted earnings in the band of $2.41-$2.53 per share for 2023, up from the $2.39 reported in 2022.
Shares of this Zacks Rank #2 (Buy) company have risen 22.7% in the past six months compared with the industry’s growth of 27.3%.
Other Stocks Looking Red Hot
Here we have highlighted three other top-ranked stocks, namely Kroger (KR - Free Report) , BJ's Wholesale Club (BJ - Free Report) and General Mills (GIS - Free Report) .
Kroger, which operates as a supermarket operator, currently sports a Zacks Rank #1 (Strong Buy). The expected EPS growth rate for three to five years is 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.6%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
BJ's Wholesale Club, which operates warehouse clubs, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 9.3%.
The Zacks Consensus Estimate for BJ's Wholesale Club’s current financial-year sales and earnings suggests growth of 7.3% and 0.8% from the year-ago period. BJ has a trailing four-quarter earnings surprise of 19.6%, on average.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial-year sales and earnings suggests growth of 6.3% and 7.4% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.