Sprouts (SFM) Q2 Earnings Report Preview: What To Look For

Grocery store chain Sprouts Farmers Market (NASDAQ:SFM) will be reporting earnings this Wednesday after market close. Here’s what to look for.

Sprouts beat analysts’ revenue expectations by 1.4% last quarter, reporting revenues of $2.24 billion, up 18.7% year on year. It was an exceptional quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

Is Sprouts a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Sprouts’s revenue to grow 14.6% year on year to $2.17 billion, improving from the 11.9% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.24 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Sprouts has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 1.8% on average.

With Sprouts being the first among its peers to report earnings this season, we don’t have anywhere else to look to get a hint at how this quarter will unravel for non-discretionary retail stocks. However, there has been positive investor sentiment in the segment, with share prices up 9.5% on average over the last month. Sprouts is down 2.8% during the same time and is heading into earnings with an average analyst price target of $182.93 (compared to the current share price of $160.07).

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