Sprouts Farmers Market (SFM) stock surged 5.19% in after-hours trading on Wednesday, as investors reacted to the company's second-quarter financial results that sailed past Wall Street expectations.
The specialty grocer reported diluted earnings per share of $1.37, easily topping the analyst consensus of $1.34. Revenue rose 5% to $2.33 billion, edging above the $2.32 billion estimate. The company also raised the lower end of its annual net sales growth forecast to 5.5%-6.5% from the prior 4.5%-6.5% range, while tightening the upper end of its full-year profit outlook, signaling confidence in the face of a cautious consumer environment.
Strong performance from new store openings and continued product innovation helped drive the beat, with CEO Jack Sinclair noting progress in foraging and innovation efforts. The results alleviated concerns about softening grocery demand and competitive pricing pressures, fueling the post-market rally in Sprouts Farmers shares.
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