Benzinga | Aug 6, 2021 06:55AM EDT

Sprouts Farmers Market Stock Falls After Mixed Q2 Results, Lowered FY21 Sales Outlook

* Sprouts Farmers Market Inc (NASDAQ:SFM) reported a second-quarter FY21 sales decline of 7% year-on-year, to $1.52 billion, missing the analyst consensus of $1.60 billion.

* Comparable store sales declined (10.0%), and two-year comparable store sales fell (0.6%).

* Gross profit for the quarter decreased 10.2% to $550 million, and gross profit margin contracted 115 basis points to 36.1%.

* The operating margin was 5.5%, and operating income for the quarter fell 9.8% to $83.7 million.

* The company held $220.9 million in cash and equivalents as of July 4, 2021.

* Cash flow from operating activities for the six months amounted to $177.31 million.

* Adjusted EBITDA of $114.9 million declined 9.7% Y/Y.

* Adjusted EPS of $0.52 beat the analyst consensus of $0.45.

* Outlook: Sprouts Farmers sees FY21 adjusted EPS of $1.90 - $2.02 (prior $1.87 - $2.00), versus the consensus of $1.97.

* The company expects FY21 sales to decline in the low single digits (prior flat to up slightly). Comparable store sales decline of (5.0%) - (7.0%), versus prior outlook down low to mid-single digits.

* Price action: SFM shares traded lower by 1.72% at $24.00 in premarket on the last check Friday.