Sprouts Farmers Market (SFM) is a healthy grocery store that sells fresh, natural, and organic food products in 305 stores in 17 states in the U.S.  It has more than 28,000 employees, was founded in 2002 and is based in Phoenix, Arizona, observes David Fried, editor of The Buyback Letter.

Sprouts has the usual offerings of fresh produce, meat and seafood, deli and baked goods, packaged groceries, vitamins and supplements, bulk foods, dairy and dairy alternatives, frozen foods, beer and wine, and natural body care and household items.

Sprouts, with its emphasis on health and value, is one of the fastest growing retailers in the country. In the first half of the year, the company opened 16 stores, including its first location in South Carolina.

Thirteen new locations are scheduled to open in the third quarter, including entries into Pennsylvania and Washington state. By the end of 2018, Sprouts will operate in 19 states.  

This year, the company expanded home delivery service in its major markets through a new partnership with Instacart, which allows for same-day (within 2 hours) delivery, or delivery within the week.

Sprouts has committed to a “Zero Waste” threshold by 2020, as defined by the U.S. Environmental Protection Agency. The Sprouts Food Rescue program donates unsold and edible groceries, including fresh produce, from its stores and distribution centers to food banks in all of its markets.

Local relief agencies pick up this food, which would otherwise go to waste, and distribute it to families in need. In 2017, Sprouts donated 23 million pounds of product, equivalent to 19 million meals. Food that is not fit for human consumption is either composted or sent to cattle ranches through Sprouts’ Food Waste to Farms program.

Q2 results highlights included net sales of $1.3 billion; a 12% increase from the same period in 2017. Net income was  $42 million, a 2% increase and diluted earnings per share of $0.32 were a 10% increase from the same period in 2017.

The firm also raised the low end of 2018 EPS guidance. Meanwhile, the shares outstanding have been reduced by 6.262% in the last 12 months.

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