PHOENIX — With between 18,000 to 20,000 stock-keeping units (SKUs) in its stores, and new items accounting for about 7,100 of those SKUs every year, Sprouts Farmers Market is a “treasure hunt” for customers, said Jack Sinclair, chief executive officer.
In response to an analyst’s question during a Feb. 20 conference call to discuss fourth-quarter financials, Sinclair said the pace of new product introductions is moving fast, even more so over the past two to three years.
“We’ve got about 18,000 to 20,000 SKUs in our business, and we’re rotating that kind of number because … basically there’s only a finite amount of space,” he said. “So, things are coming out and coming in. And that’s, I think, one of the things customers really like about us. They’re getting a treasure hunt. They’re not quite sure what’s going to come next.”
Sinclair said Sprouts is using the innovation strategy to bring people and products into its stores. He said one of the things customers love is the fact Sprouts is constantly changing its assortment.
“It’s part of the excitement of coming into the store,” he said. “There are some challenges in terms of replenishing and working behind that, but it’s something that we’re very anxious to do because I think it makes a difference, and we can reinvent ourselves.
“We expect products that come into our business sell really, really well, then they’ll end up in more conventional retailers going forward and we kind of celebrate that because then we can move on and keep reinventing ourselves.”
In 2025, Sprouts plans to showcase even more innovation in its stores, Sinclair said. Product innovation will focus on where the retailer has been winning, specifically attribute-driven products that are unique in the marketplace, he said.
“The foraging team will continue sourcing the best innovation in our space such as organics, clean ingredients, minimally processed, and pasture raised proteins while staying ahead of evolving trends,” Sinclair said. “Additionally, they will introduce more innovative Sprouts Brand items such as organic avocado tortilla chips, konjac noodles, organic reduced-sugar preserves and organic acai chunks. Our Sprouts Brand is thriving, delivering growth and outpacing company performance while providing customers with products they trust.”
He added that snacks and beverages have been a big opportunity for Sprouts, and non-alcoholic “is on fire.”
Net income in the year ended Dec. 29, 2024, totaled $380.6 million, equal to $3.79 per share on the common stock, up 47% from $258.86 million, or $2.53 per share, in fiscal 2023. Net sales increased 13% to $7.72 billion from $6.84 billion.
For the fourth quarter, net income totaled $79.6 million, or 80¢ per share, up 59% from $50.04 million, or 49¢ per share, in the same period a year ago. Net sales increased 18% to $1.99 billion from $1.7 billion.