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Diving brief:

• Sprouts Farmers Market reported strong third quarter profits with net sales increasing 14%, to $1.9 billion, and same-store sales growth of more than 8%, the specialty grocer announced Wednesday.
• Strong performance in its private label and e-commerce businesses and continued store expansion fueled Sprouts’ solid quarterly growth, executives said on a call with investors.
• Sprouts has slightly scaled back its new store expansion plan, reducing the number of new locations from 35 to 33, due to the impact of Hurricane Milton.

Dive Overview:

Sprouts’ third-quarter results “exceeded our expectations,” CEO Jack Sinclair said during the company’s earnings conference call, continuing the specialty grocer’s streak of recent quarters with strong sales growth .

E-commerce sales increased 36%, accounting for 14.5% of total sales in the quarter, while private labels contributed 23%, Chief Financial Officer Curtis Valentine said on the call.

Social media marketing was also a significant driver of Sprouts’ performance this quarter, Sinclair said, noting that these efforts attracted new customers, increased buyer loyalty and attracted younger consumers.

“Our team brought our unique assortment and experience to life and found willing partners with many influencers and celebrities whose products and goals align with ours,” Sinclair said.

Hurricane Milton, which hit Florida earlier this month, delayed the opening of two planned stores in the state, according to the company. Both sites are now expected to open during the first quarter of 2025.

Although still in its early stages, Sprouts plans to expand its loyalty pilot program beyond Tucson, Ariz., and Nashville, Tenn., Sinclair said, noting that testing would extend to more new unidentified markets early next year.

Moving forward, loyalty program advancements will focus on how to better incentivize customers to scan and sign up, Sinclair said, adding that by the end of 2025, Sprouts will also look for ways to “ stimulate our customers to have more affinity with the Sprouts brand.