Sprouts Farmers Market Q3 Profit Increases

(RTTNews) - Sprouts Farmers Market Inc. (SFM) reported that its net income for the third-quarter was $26.1 million or $0.17 per share, up from $11.46 million or $0.08 per share in the same period in 2013. Net income in the quarter included $1.1 million pre-tax loss on extinguishment of debt; and $0.9 million of pre-tax secondary offering expenses.

Net income for the third quarter of 2013 included $9.5 million pre-tax loss on extinguishment of debt; $3.2 million pre-tax bonus related to the IPO; and $0.4 million pre-tax loss on disposal of assets.

Excluding these items, adjusted net income for the quarter increased 41% to $27.4 million, compared to $19.5 million in the same period in 2013. The increase was driven by higher sales and operating leverage partially offset by expenses and lower operating margin from the 14 new stores opened in the quarter. Adjusted earnings per share was $0.18, a 38% increase from adjusted earnings per share of $0.13 from the same period in 2013.

Net sales in the third quarter of 2014 were $766.4 million, or a 21% increase compared to the same period in 2013. Net sales growth was driven by strong performance in new stores opened and a 9% increase in comparable store sales growth.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.16 per share and revenues of $763.71 million for the quarter. Analysts' estimates typically exclude special items.

For the fourth-quarter, the company expects Comparable store sales growth of 5.5% to 6.5%.

Two-year combined pro forma comparable store sales growth is expected to be in the range of 19% to 20%.

Looking ahead for 2014, the company now projects adjusted earnings per share to be in the range of $0.67 to $0.68, compared to prior estimate of $0.65 to $0.67. The company still expects net sales growth of 19% to 20% for fiscal 2014. Analysts expect the company to report earnings of $0.68 per share and revenues of $2.95 billion for fiscal 2014.