Sprouts Is Closing Out a Surprisingly Good Year
By all evidence, 2017 should have been a trying year for Sprouts Farmers Market (NASDAQ: SFM). Still-lingering effects of grocery deflation, which have weighed heavily on much larger competitors like Kroger Co (NYSE: KR), had the potential to derail the produce-intensive natural and organic food chain. Shareholders have worried over a price battle looming between established grocery giants like Kroger and Wal-Mart (NYSE: WMT) as global German discount grocery specialists Aldi and Lidl assert themselves in the U.S. market. Finally, Amazon.com's (NASDAQ: AMZN) purchase of Sprouts competitor Whole Foods Market earlier this year has raised the prospect of deep price cuts, and those by a high margin grocer previously disinclined to compete on price.
And yet, despite great volatility in Sprout's stock chart due to the Whole Foods acquisition, SFM shares have gained nearly 17% to date. Through the first three quarters of 2017, Sprout's revenue has increased 15% to $3.5 billion versus the prior-year period, due to both a brisk slate of successful store openings and a comparable sales increase of 2.4% among established stores -- no small feat in the current cutthroat grocery pricing environment.
Image source: Getty Images.
Source: Fool.com
