New Initiatives Help Boost Sprouts Q2 Sales
A renewed effort on bringing back a “selling culture” coupled with improving in-stocks were key factors in the second quarter net sales increase at Sprouts Farmers Market.
For the 13-week period ended July 3, net sales were $1.6 billion, an increase of 5% over the second quarter of 2021. Comparable store sales were up 2%. Diluted earnings per share were $0.57 compared to diluted earnings per share of $0.52 in the same period in 2021.
In the quarter, Sprouts opened two new stores and closed three stores due to lease expirations. As of July 3, the grocer operated 378 stores in 23 states.
“We emphasized bringing back a selling culture, improving in-stocks, amping up our merchandising and testing marketing initiatives,” Jack Sinclair, CEO of Sprouts said during an investor conference call. “This resulted in a better-than-expected financial performance.”
On the merchandising side, Sinclair said Sprouts is highlighting its differentiation and value with a focus on the Sprouts brand as well as its selection of healthy, prepared meals.The grocer is also amping up its connections with shoppers by holding events such as seafood road shows, community events and offering in-store sampling.
Highlighting its product differentiation has also been key to boosting sales, with a focus on its selection of entry-level pricepoints sold under the Sprouts brand, which pays attention to innovation, health and wellness and quality. Recent product introductions highlighted by Sinclair include pasteurized eggs, avocado and asparagus fries and medicinal gummies. Additional product debuts are expected later this year.
Sprouts is also moving forward with new store openings, planning for 30 additional locations in 2023. Short term, Sinclair noted that store expansion in 2022 has been slowed by supply chain challenges and securing items such as air conditioning and items related to refrigeration needed for new locations.
“We’re sitting on 80 to 85 signed leases,” he said. “We’re being naturally cautious given what is happening with supply chain. While it’s not getting hugely better, it’s definitely not getting any worse. We’re feeling confident about the 30 (stores) number in 2023."