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Sprouts Farmers Market Inc - Stock Quote SFM

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Morningstar's Sprouts Farmers Market Inc Stock Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

While Sprouts’ First Quarter Was Not Pretty, the Shares’ Dive Suggests a Buying Opportunity

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

Although no-moat Sprouts’ shares dove 25% on the day after its earnings announcement, we still plan only a mid-single-digit percentage reduction for our $29 per share valuation. We share investor concern about Sprouts’ lackluster top-line expansion (sub-2% comparable growth despite low-double-digit inflation) but believe our more sanguine take reflects a realistic long-term view about its prospects.

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Sprouts Farmers Market Inc's Company Profile

Business Description

Sprouts Farmers Market is an American specialty grocer offering an assortment highlighting fresh and naturally derived products. Its offerings are especially focused on produce, which constituted around 21% of sales in fiscal 2021. Founded in 2002, the chain is most heavily concentrated in California, which accounted for over one third of its 374 stores as of the end of fiscal 2021. All of the company's operations are in the United States, with its stores largely located in the southern half of the country. The firm sells roughly 20,000 products (of which around 70% are attribute driven, such as organic, plant-based, or catering to the keto or paleo diet), with private-label products accounting for about 16% of sales in fiscal 2021. Perishable items accounted for 58% of fiscal 2021 sales.

Contact
5455 East High Street, Suite 111
Phoenix, AZ, 85054
T +1 480 814-8016
Sector Consumer Defensive
Industry Grocery Stores
Most Recent Earnings Mar 31, 2022
Fiscal Year End Jan 2, 2023
Stock Type Classic Growth
Employees 31,000