Sprouts Farmers Market (SFM) Stock Falls Sharply on Weak Earnings Results

NEW YORK (TheStreet) -- Sprouts Farmers Market (SFM) shares are down 8.9% to $27.52 in trading on Friday following the release of the company's first-quarter earnings results after the closing bell yesterday.

The Phoenix-based organic food grocer reported an 11% increase in first quarter earnings to $37.5 million, or 25 cents per diluted share, falling short of analysts' 27 cents per share expectations.

The company reported a 19% jump in revenue to $857.5 million that also missed analysts' $870 million expectations for the period.

The company's shares fell as much as 9% in after-hours trading yesterday following the earnings release. However, the company also announced that it will be opening 27 new stores this year while expecting sales to grow between 20% and 22% this year. 

Separately, TheStreet Ratings team rates SPROUTS FARMERS MARKET as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SPROUTS FARMERS MARKET (SFM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including premium valuation, relatively poor performance when compared with the S&P 500 during the past year and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

SFM Chart SFM data by YCharts

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