Sprouts Farmers Market has reported better-than-expected results for its fiscal first quarter, despite strong price deflation. The results prompted the natural foods grocer to slightly raise its full-year forecast.
For the three months to 2 April, sales surged up 14% to $1.1bn, on like-for-like growth of 1.1%, even though net profit remained flat at $46m. The results were helped by a 0.6% uptick in store traffic.
Sprouts noted that it recorded a 3% price deflation in the quarter, the highest it had ever reported, although it said that this reduced over time. CEO Amin Maredia noted: “We expect 2017 to be in the 1% to 2% deflationary range, a slight improvement from what we believed at year-end mainly attributed to produce. We anticipate that deflation will progressively improve throughout the year with the expectations that we cycle deflation in most all categories as we enter the third quarter.”
The chain now expects full-year sales to grow by 12.5%-13.5% on LFL growth of 0.5%-1.5%, compared to its previous forecast of 12%-13% sales and flat to 1% LFL growth.