What happened

Shares of natural-foods grocery store Sprouts Farmers Market (SFM -0.18%) stock popped 13% in early trading Thursday after the company reported sales and earnings that broadly outperformed Wall Street's expectations.

Expected to earn $0.40 per share on $1.4 billion in sales, Sprouts nailed the sales target -- but earned $0.46 per share. Sprouts stock remains up 6.1% as of 2:20 p.m. EDT.

Supermarket produce department.

Image source: Getty Images.

So what

This was a relief -- but perhaps still not great news, which would explain why Sprouts shares are giving up some of their gains as the day wears on. Q1 2019 sales grew 10% year over year, with same-store sales climbing 1.4%. Profits, however, although they beat expectations, slid 8% from the $0.50 per share Sprouts had earned in last year's Q1.

Now what

Regardless, Sprouts interim co-CEO Brad Lukow said that based on what he's seeing in terms of "strong new store productivity...and planned continued expansion," he's "raising the bottom-end of our EPS guidance."

By year-end, Sprouts still expects to grow sales 9% to 10.5%, in line with Q1 sales growth. Earnings per share, however, are now expected to come in between $1.18 and $1.24 per share, or $0.02 better than previously expected. Taken at the midpoint, this implies $1.21 per share for the full year, or a penny better than Wall Street has been forecasting -- and suggests Sprouts will continue to beat earnings as the year moves along.