- Net sales at Sprouts Farmers Market increased across the board in Q4, with a 14% increase over the previous quarter and 6% increase over the same period last year, according to the company's earnings report. Net sales reached $986 million in Q4.
- Same-store sales for the natural health foods supermarket chain increased by 0.7% in Q4. For all of 2016, same-store sales grew by 2.7%.
- “The Sprouts team delivered industry leading 15% sales growth for the year and positive same store sales in a year significantly impacted by deflationary pressures,” CEO Amin Maredia said in the report. “While the environment remains challenging, we remain confident in our business fundamentals, team and long-term growth opportunities for the brand.”
Sprouts Farmers Markets defied the odds with its positive earnings report. In its own Q4 report, Whole Foods posted sales declines, along with slumping same-store sales. Sprouts, on the other hand, celebrated solid growth, including three new stores that opened in California, Oklahoma and Texas.
Despite the growth in net and same-store sales, Sprouts may not be the success story investors are looking for. Gross profits were up 4% for the quarter, but diluted shares stayed relatively flat and net income for the year was down $5 million from 2015. The report mentions that some of the earnings are down because of payments associated with the recent retirement of the retailer's executive chairman of the board — former president and CEO Doug Sanders.
In its report, the supermarket chain announced a $250 million buyback of its own shares through December 2018, though reasons for such a move were not articulated. The earnings report suggests Sprouts has been buying back its stock for at least the last two years: In 2016, 13.2 million shares were bought back for a total of $294 million, and 4.1 million shares have been bought back since January.
The retailer may be reacting to currently low stock prices of natural grocery retailers in general or working to improve its earnings per share ratio. Sprouts stock has been anything but healthy recently, falling more than 14% after its Q3 earnings report in November. Trading so far on Thursday has seen few changes.