“Unique and great-tasting” private label offerings at Sprouts Farmers Market, Inc. increasingly are resonating with existing and new customers, said Amin N. Maredia, chief executive officer.

Describing Sprouts as “an authority in natural and organic foods for more than a decade,” Mr. Maredia in a Nov. 1 conference call with analysts offered high praise for the retailer’s private label portfolio.

“Today, more than half of our private label products are non-G.M.O. or organic, and it’s this quality that continues to drive traffic to our stores,” he said. “Private label remains a high-growth category at Sprouts, and at only 13% penetration today, we believe we have many more years of growth in private label for new product introductions and increased customer engagement and messaging. Private label products continue to help drive our top line, and with higher gross margins will provide added flexibility when it comes to further investments as necessary in the business.”

James L. Nielsen, president and chief operating officer, said Sprouts expects private label to account for approximately 16% of sales by late 2020 or 2021.

Elsewhere in the business, Mr. Maredia said home delivery and Sprouts' partnership with Instacart have continued to grow. Sprouts home delivery is now available in more than 200 stores, covering most of the retailer’s major markets. The remaining markets are expected to come online by early 2019, he said.

“Though home delivery remains a small percentage of grocery shopping in the U.S. today, our early involvement and experience in this space combined with strong brand, trust, loyalty and execution continues to allow us to think about new and exciting ways to serve the customer outside the store,” he said.

Net income at Sprouts in the third quarter ended Sept. 30 was $37,500,000, equal to 30c per share on the common stock, up 19% from $31,486,000, or 23c per share, in the same period a year ago. The most recent quarterly results included a $3 million discrete income tax benefit from the adoption of a tax calculation method change in conjunction with the Tax Cuts and Jobs Act. Net sales increased 10% to $1,329,109,000 from $1,206,059,000.

In the nine months ended Sept. 30, net income was $145,833,000, or $1.13 per share, up 23% from $118,741,000, or 87c per share, in the same period a year ago. Net sales increased 12% to $3,937,998,000.