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Sprouts Farmers Market Inc Earnings: 2 Things to Watch

By Brian Stoffel – Feb 25, 2014 at 4:00PM

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One of the country's fastest-growing grocery chains is reporting earnings. Here's how to separate what matters from the noise.

Though buying shares of grocers might sound like a boring investment prospect, it's been extremely lucrative over the past five years.  As Americans have become far more conscious of where their food comes from and what's in it, these upstarts have started grabbing huge shares of the country's enormous food budget.

Of course, the behemoth in the industry is Whole Foods Market (WFM), but newcomers like The Fresh Market (TFM)Natural Grocers (NGVC -0.69%) and Sprouts Farmers Market (SFM 1.20%) are differentiating themselves from Whole Foods by building smaller stores that can exist with a more mom-and-pop feel.

In the last two quarters, one of the fastest-growing of this cohort has been Sprouts -- which is primarily located within the American Southwest.  The company is reporting earnings later this week, and in order for investors to know what to look for, Motley Fool contributor Brian Stoffel has isolated two variables that he thinks will be the most important for long-term investors to keep an eye on.

John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Brian Stoffel owns shares of Whole Foods Market. The Motley Fool recommends The Fresh Market and Whole Foods Market. The Motley Fool owns shares of Whole Foods Market. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Sprouts Farmers Market Stock Quote
Sprouts Farmers Market
SFM
$34.52 (1.20%) $0.41
Whole Foods Market, Inc. Stock Quote
Whole Foods Market, Inc.
WFM
The Fresh Market, Inc. Stock Quote
The Fresh Market, Inc.
TFM
Natural Grocers by Vitamin Cottage Stock Quote
Natural Grocers by Vitamin Cottage
NGVC
$10.08 (-0.69%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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