Sprouts Farmers Market Q1 Revenue Miss Drags Down Shares

Sprouts Farmers Market, Inc. (Nasdaq: SFM) reported 23.2 percent increase in net income to $46.2 million in the first quarter from $37.5 million in the year-ago quarter. Its earnings also jumped 25 percent to $0.30 a share from $0.24 a share in the comparable period. This was $0.01 a share higher than the Street analysts' expectations of $0.29 a share.

Sprouts Farmers Market's net sales advanced 16 percent to $993.2 million in the first quarter from $857.51 million in the previous year quarter. However, this was lower than the Street analysts' predictions of $1.01 billion. As a result, shares of the company tanked over 9 percent. The company indicated that its net sales growth was driven by a 4.8 percent growth in its comparable store sales and solid performance in new stores opened.

The company's CEO, Amin Maredia, commented, "Our first quarter results reflect our customers' continued strong engagement with the Sprouts brand, and the appeal of our fresh, natural and organic products at affordable prices. Despite a near zero inflationary environment, our team delivered another solid quarter of comparable store sales growth and robust earnings improvement."

He added, "We continue to further product innovation, enhance the customer experience, develop our team members and invest in infrastructure and technology, which position Sprouts for continued growth."

Going forward, Sprouts Farmers Market maintained its earnings outlook of $0.96-$0.98 a share for the year 2016. Analysts expect the company to deliver earnings of $0.98 a share for the same period. The company also maintained its comparable store sales growth of 4–6 percent for the current year.

On Thursday, the stock fell 9.02 percent.