New Stores, Private Brands Drive Sprouts' Continued Growth
Sprouts Farmers Market is continuing its expansion, adding new stores and growing its private-label product assortment, following a strong quarter where comparable store sales increased more than 10%. The grocer is also expanding its loyalty program test.
During a conference call to discuss second-quarter results, CEO Jack Sinclair said Sprouts is on track to open 35 locations this year. The grocer has 130 approved locations in its real estate pipeline, which includes recent approvals in the Midwest and Northeast.
"Building great stores remains the foundation of our growth strategy," Sinclair said. "New stores this year are opening with solid top and bottom line results, and last year's vintage is entering the comp base strongly, reinforcing the effectiveness of our model. We continue to expand our footprint to enhance accessibility for more customers across the country."
Earlier this year, news reports revealed Sprouts would enter New York with a forthcoming location in the Long Island community of Centereach, slated to open in 2026. Sprouts closed out July with the opening of a new Montgomeryville, Pennsylvania, store, and on Aug. 1, celebrated the opening of its new Waldorf, Maryland, location.
During the call, Sinclair was asked about Sprouts’ growth in the Mid-Atlantic and Northeast, and potential challenges in providing stores in these regions with fresh produce and related items year-round.
He noted that within each of its distribution centers, Sprouts has a sourcing team that works to acquire fresh produce locally. If local sources aren’t available, they look for regional sources and then national providers.
"Our distribution philosophy has always been to try and get our stores within 250 miles of the distribution center," Sinclair said. "And that will apply when we go to the Mid-Atlantic. When you look at Jersey tomatoes and New York apples, there are certain times of the year we've got to have the right products in store, and we want to be right in pace with that.
"But inevitably, you have to bring things from California at certain times of the year that travel a long way, and we'd hope to be managing our inventory so well that the freshness and the rotation allow us to maintain the freshness of those kinds of products."
Sprouts also continues to expand its private-label assortment, which accounted for 24% of total sales in the second quarter. More than 350 new Sprouts Brand products will debut in 2025. Sinclair said the grocer is pushing its Sprouts brand products "very hard" as its private-label team works to develop offerings that provide differentiation and offer a variety of healthy attributes.
The grocer also continues to test its loyalty program. Company officials said early results have boosted confidence in the program’s potential, with loyalty members shopping Sprouts with greater frequency and spending more.
"Our teams are excited and prepared to support the full rollout, which remains on track for the end of this year," Sinclair said. "This initiative presents a significant opportunity for us to better understand and serve our target customers, ultimately, using these insights across our business to enhance the customer experience and create long-term value."
Sprouts closed its second quarter with net sales of $2.2 billion, up 17% from the same quarter the previous fiscal year. Diluted earnings per share were $1.35, up from 94 cents in the same period in 2024. Comparable store sales were up 10.2%. As of the end of June, Sprouts operated 455 stores in 24 states.
