Sprouts Farmers Market Inc., a specialty grocery chain headquartered in Phoenix, saw its stock price drop nearly 25% on Thursday following the company’s latest earnings report.
After the markets closed on May 4, Sprouts released its first-quarter earnings, which saw increases in revenue, comparable store sales and net income compared to the same quarter in 2021, but what the company’s executives said about the future caused investors to sour on the company.
During Sprouts’ May 4 earnings call with analysts, CFO Chip Molloy said that at the beginning of the year the company was optimistic that certain economic conditions would turn around, but that hasn’t happened yet.
“We believed year-over-year inflation would begin to dissipate as the year progressed and the declines in units per basket would slowly stabilize,” Molloy said. “However, inflation is not slowing and customers continue to put one to two fewer items in their basket this year than last.”