Sprouts Farmers Q2 Profit Surges - Update

(RTTNews) - U.S. grocery chain Sprouts Farmers Market Inc. (SFM), Thursday reported a surge in profit for the second quarter, as sales soared 45 percent indicating growing demand for natural and organically grown foods. Shares of the company were up about four percent in after-hours trade on the Nasdaq.

Phoenix, Arizona-based Sprouts Farmers Market's second-quarter profit surged to $12.5 million or $0.10 per share from $5.3 million or $0.05 per share last year. Adjusted earnings for the quarter rose to $0.14 per share from $0.19 per share last year.

Second-quarter sales surged to $622.4 million from $430.1 million last year. Sales were driven mainly by the Sunflower Farmers Market acquisition, an increase in comparable store sales growth and new store openings.

During the second quarter, the company opened six new stores, four in California and one each in Oklahoma and Texas. An additional five stores have been opened in the third quarter to date bringing 2013 new store openings to 17, for a total of 165 stores as on date. Sprouts Farmers is a natural and organic food store chain controlled by Apollo Global Management LLC (APO). The company focuses mainly on fresh foods produce, healthy foods and vitamins/supplements.

Gross margin for the quarter declined 30 basis points to 30.1 percent from the same period last year.

"We are pleased to report strong financial results in our initial quarterly release as a public company," said Chief Executive Doug Sanders said. "Our robust momentum continued into the second quarter resulting in strong top line performance with pro forma comparable store sales growth of 10.8%."

Sprouts Farmers is reporting quarterly results for the first time since the completion of its initial public offering earlier this month. The company had a fantastic welcome to the Nasdaq after its stock surged about 123 percent on its first day of trading. The stock which is currently trading at $40, was priced at $18 a share in its IPO, above the expected range of $14-$16 per share, raising about $333 million.

Looking forward to the full year, the company expect adjusted earnings in the range of $0.41 to $0.43 per share.

SFM closed Thursday at $38.59, up $1.37 or 3.68%, on the Nasdaq. The stock further gained $1.41 or 3.65% in after hours trade.