Amin Maredia, who helped to grow Sprouts Farmers Market into a powerhouse foe of conventional supermarkets, is resigning as its CEO effective Dec. 30 to take on another opportunity.
Jim Nielsen, Sprouts’ president and COO, and Brad Lukow, CFO, will take on co-CEO duties as the grocery chain seeks a successor, according to the Phoenix-based retailer.
The surprise departure of Maredia—who has been Sprouts’ CEO since 2015 when he succeeded Doug Sanders, and previously was its CFO from August 2011 to August 2015—sent the retailer's stock tumbling by nearly 14% in early trading.
Under Maredia’s leadership, Sprouts refined its “healthy living for less” positioning and engaged in aggressive geographic expansion, growing from its Southwest base to new markets in the Southern U.S. and East Coast while building out service departments such as delis that added traffic and served a variety of eating occasions amid rapidly growing sales.
Sprouts had sales of $4.7 billion in fiscal 2017 and is on pace to grow revenues by 11% to 11.5% this year, the company said in its most recent financial filing this month. It was on pace to add 30 new stores this year and 30 next year.
Sprouts did not disclose any information about Maredia’s next stop, but industry sources told WGB they would be surprised if the split was related to performance. Amid trying times for the industry overall, Sprouts has grown rapidly.
“I can’t imagine this had anything to do with performance,” Jose Tamez, an executive recruiter with Austin-Michaels, Golden, Colo., told WGB in an interview. “I’d make the case they became a much more formidable opponent under his guidance.”
Another source, who asked not to be identified, speculated that the suddenness of the departure may have indicated a disagreement with the board. Sprouts, given its rapid growth and positioning at the intersection of the booming wellness and value trends, has been a subject of industry speculation over a sale as recently as last year, when Albertsons was said to have made an offer.
Maredia told WGB earlier this year that “there will always be rumors out there,” regarding a sale. “What I tell the team is, if we do exceptionally well, we’ll be too expensive to buy.”
In the same interview, which accompanied the selection of Sprouts as WGB’s 2018 Grocery Business of the Year, Maredia described having learned consumer business while working in restaurants operated by his father, a KFC/Taco Bell franchisee in Texas. He described himself as “a strong business person who happened to be good at finance” in explaining his path from CFO to CEO.
Maredia was also heavily involved in Sprouts’ charitable endeavors.
An analyst who participated in a call with Sprouts officials regarding the leadership change told WGB the company gave the impression Maredia’s departure was a “lifestyle choice,” emphasizing that the company did not use those words specifically.
In a press release, Sprouts Chairman Joseph Fortunato said, “On behalf of the board of directors, I would like to express our gratitude to Amin for his many years of service to Sprouts. Over the past three years, Amin has overseen our tremendous growth from coast to coast and put us on a firm footing for continued success. We wish Amin all the best in his future endeavors. While we search for a new CEO, the board has deep confidence in Jim and Brad to continue executing the company’s strategic initiatives, driving shareholder value and delivering on our mission of ‘Healthy Living for Less.’”
“It has been an enormous privilege to have been part of the Sprouts team during this incredible period in the company’s history over the past eight years,” Maredia said in the release. “As I transition, it is comforting knowing that Sprouts is well-positioned with a strong management team for robust growth and sustained success.”
Sources speculated that Nielsen would a leading internal candidate to succeed Maredia. Nielsen joined the company in April 2011 as its COO and has been the company’s president and COO since August 2015. Prior to that, Nielsen was president of Henry’s Farmers Markets from 2007 through April 2011.
Lukow has been Sprouts' CFO since March 2016, having previously been EVP and CFO of Shoppers Drug Mart, Canada’s leading drugstore retailer.
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