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Sprouts Farmers (SFM) Lined Up for Q2 Earnings: What's in Store?
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As Sprouts Farmers Market, Inc. (SFM - Free Report) prepares to announce its second-quarter 2024 earnings, investors are keenly watching for insights into the company’s performance and strategic direction.
With a focus on providing fresh, natural and organic products, SFM has carved out a niche in the competitive grocery industry. The Zacks Consensus Estimate for second-quarter revenues stands at $1,828 million, which indicates an increase of 8% from the prior-year reported figure.
The bottom line of this grocery retailer is also expected to have risen year over year. Over the past 30 days, the Zacks Consensus Estimate for earnings per share has been stable at 77 cents, which suggests an increase of 8.5% from the year-ago quarter. On its last earnings call, the company had guided adjusted earnings in the band of 75-79 cents a share for the quarter.
Sprouts Farmers has a trailing four-quarter earnings surprise of 9.2%, on average. In the last reported quarter, this Phoenix, AZ-based company surpassed the Zacks Consensus Estimate by a margin of 12%.
Factors to Consider
Sprouts Farmers’ emphasis on product innovation, technology and targeted marketing with everyday competitive pricing bodes well. The company has been steadily increasing its footprint in the natural and organic space, driven by strong demand in this segment. The introduction of unique and health-oriented products attracts a diverse customer base and drives sales growth.
Management's efforts to streamline operations, such as simplifying production processes, optimizing inventory and transitioning to smaller-format stores, have been key to this growth. Additionally, Sprouts is expanding its range of private-label offerings, further strengthening its market position.
Cumulatively, the aforementioned factors are likely to have favorably impacted the top line. We expect comparable store sales growth of 3.5% for the quarter under review.
Sprouts Farmers Market has embraced digital transformation to enhance its customer experience and operational efficiency. The company has invested in e-commerce platforms, online ordering and delivery services to meet the growing demand for convenience. Partnerships with Uber Eats, DoorDash and Instacart have expanded its digital footprint and accelerated e-commerce growth.
However, the company faces challenges in the SG&A domain. We anticipate SG&A expenses to increase 8.4% year over year in the second quarter. As a percentage of net sales, we expect the metric to deleverage 20 basis points to 29.6%. Consequently, we foresee a 10-basis point contraction in the operating margin.
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise
Our proven model doesn’t conclusively predict an earnings beat for Sprouts Farmers this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Sprouts Farmers currently has a Zacks Rank #3 and an Earnings ESP of 0.00%, thus making the surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
3 Stocks With the Favorable Combination
Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Chewy, Inc. (CHWY - Free Report) has an Earnings ESP of +1.61% and currently sports a Zacks Rank of 1. CHWY's top line is anticipated to advance year over year when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.86 billion, which suggests a 2.9% rise from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is expected to register an increase in the bottom line. The consensus estimate for CHWY’s fiscal second-quarter earnings is pegged at 22 cents a share, up 46.7% from the year-ago quarter. CHWY has a trailing four-quarter earnings surprise of 57.7%, on average.
Ollie's Bargain (OLLI - Free Report) currently has an Earnings ESP of +2.38% and a Zacks Rank of 1. The company is likely to register an increase in the bottom line when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 78 cents implies a jump of 16.4% from the year-ago reported number.
Ollie's Bargain’s top line is expected to have ascended year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $562.4 million, which suggests an increase of 9.3% from the prior-year quarter. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
Costco Wholesale Corporation (COST - Free Report) currently has an Earnings ESP of +1.23% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COST’s quarterly revenues is pegged at $80 billion, which implies growth of 1.3% from the year-ago quarter’s reported figure.
The consensus estimate for Costco’s earnings has increased by a penny in the past 30 days to $5.02 per share. The consensus estimate for earnings suggests a jump of 3.3% from the year-ago quarter’s reported figure. COST delivered an earnings beat of 2.3%, on average, in the trailing four quarters.
Image: Bigstock
Sprouts Farmers (SFM) Lined Up for Q2 Earnings: What's in Store?
As Sprouts Farmers Market, Inc. (SFM - Free Report) prepares to announce its second-quarter 2024 earnings, investors are keenly watching for insights into the company’s performance and strategic direction.
With a focus on providing fresh, natural and organic products, SFM has carved out a niche in the competitive grocery industry. The Zacks Consensus Estimate for second-quarter revenues stands at $1,828 million, which indicates an increase of 8% from the prior-year reported figure.
The bottom line of this grocery retailer is also expected to have risen year over year. Over the past 30 days, the Zacks Consensus Estimate for earnings per share has been stable at 77 cents, which suggests an increase of 8.5% from the year-ago quarter. On its last earnings call, the company had guided adjusted earnings in the band of 75-79 cents a share for the quarter.
Sprouts Farmers has a trailing four-quarter earnings surprise of 9.2%, on average. In the last reported quarter, this Phoenix, AZ-based company surpassed the Zacks Consensus Estimate by a margin of 12%.
Factors to Consider
Sprouts Farmers’ emphasis on product innovation, technology and targeted marketing with everyday competitive pricing bodes well. The company has been steadily increasing its footprint in the natural and organic space, driven by strong demand in this segment. The introduction of unique and health-oriented products attracts a diverse customer base and drives sales growth.
Management's efforts to streamline operations, such as simplifying production processes, optimizing inventory and transitioning to smaller-format stores, have been key to this growth. Additionally, Sprouts is expanding its range of private-label offerings, further strengthening its market position.
Cumulatively, the aforementioned factors are likely to have favorably impacted the top line. We expect comparable store sales growth of 3.5% for the quarter under review.
Sprouts Farmers Market has embraced digital transformation to enhance its customer experience and operational efficiency. The company has invested in e-commerce platforms, online ordering and delivery services to meet the growing demand for convenience. Partnerships with Uber Eats, DoorDash and Instacart have expanded its digital footprint and accelerated e-commerce growth.
However, the company faces challenges in the SG&A domain. We anticipate SG&A expenses to increase 8.4% year over year in the second quarter. As a percentage of net sales, we expect the metric to deleverage 20 basis points to 29.6%. Consequently, we foresee a 10-basis point contraction in the operating margin.
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise
Sprouts Farmers Market, Inc. price-consensus-eps-surprise-chart | Sprouts Farmers Market, Inc. Quote
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Sprouts Farmers this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Sprouts Farmers currently has a Zacks Rank #3 and an Earnings ESP of 0.00%, thus making the surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
3 Stocks With the Favorable Combination
Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Chewy, Inc. (CHWY - Free Report) has an Earnings ESP of +1.61% and currently sports a Zacks Rank of 1. CHWY's top line is anticipated to advance year over year when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.86 billion, which suggests a 2.9% rise from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is expected to register an increase in the bottom line. The consensus estimate for CHWY’s fiscal second-quarter earnings is pegged at 22 cents a share, up 46.7% from the year-ago quarter. CHWY has a trailing four-quarter earnings surprise of 57.7%, on average.
Ollie's Bargain (OLLI - Free Report) currently has an Earnings ESP of +2.38% and a Zacks Rank of 1. The company is likely to register an increase in the bottom line when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 78 cents implies a jump of 16.4% from the year-ago reported number.
Ollie's Bargain’s top line is expected to have ascended year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $562.4 million, which suggests an increase of 9.3% from the prior-year quarter. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
Costco Wholesale Corporation (COST - Free Report) currently has an Earnings ESP of +1.23% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COST’s quarterly revenues is pegged at $80 billion, which implies growth of 1.3% from the year-ago quarter’s reported figure.
The consensus estimate for Costco’s earnings has increased by a penny in the past 30 days to $5.02 per share. The consensus estimate for earnings suggests a jump of 3.3% from the year-ago quarter’s reported figure. COST delivered an earnings beat of 2.3%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.