Sprouts Farmers Market Inc (NASDAQ:SFM) was in demand on Thursday after the supermarket chain topped expectations with its third quarter earnings and upped its guidance.
The Phoenix-based group reported a profit of US$31.5mln for the three months to the end of September and said it had net income of US$0.23 per share.
That was significantly higher than the US$0.17 per share Wall Street analysts had forecast.
Net sales jumped 16% in the quarter to US$1.21bn (Q3 2016: US$1.04bn), also beating estimates of US$1.18bn.
‘Exceptional earnings growth’
“Sprouts is pleased to report strong top-line growth and demonstrate our ability to leverage those sales into exceptional earnings growth for the quarter. Sprouts' hallmark of fresh, healthy, affordable products continues to resonate with our customers and positions us as a leader in the industry," said chief executive Amin Maredia.
"We'll continue to accelerate strategic priorities that will enhance our business - from product assortment to the digital experience to customer service.
“These, coupled with our technology investments to drive efficiencies, will provide the flexibility to make future investments where needed to ensure Sprouts is well-positioned for the future.”
Full-year guidance raised
Given the strong performance so far in 2017, Sprouts now expects net sales growth of 14.5% to 15% (previously 13% to 14%) and also upped its earnings per share forecast to between US$0.98 and US$0.99 (previously US$0.88 to US$0.92).
As for new stores, the company remains on track to open 32 outlets this year.
Sprout shares gained 5.8% to US$19.96 on Thursday.