PHOENIX--(BUSINESS WIRE)--Sprouts Farmers Market, Inc. (Nasdaq: SFM) today announced a planned leadership transition, effective January 4, 2027, whereby Nick Konat, current president and chief operating officer, will take on the role of chief executive officer and join the board of directors. Jack Sinclair, who has served as CEO since 2019, will transition to the role of executive chairman.
Sinclair said, “The Board and I have spent significant time and consideration developing our succession plan, and we believe that now is the right time to transition Sprouts to its next generation of leadership. Following the Board’s comprehensive search process, we determined that Nick was the right leader for Sprouts. I’ve worked closely with Nick since he joined Sprouts in 2022 and seen firsthand his talent, drive and strong dedication to our people. He played a central role in shaping and executing our strategy, and I have tremendous confidence in his ability to lead the company to new heights. I want to thank all our team members for their deep commitment to Sprouts and their support for each other, our customers, our communities and our shareholders. I will be supporting Nick during the transition period, and it will be a privilege for me to continue serving Sprouts as its executive chairman.”
“Jack has guided the company through a significant phase of transformation and value creation. We are extremely grateful for his leadership,” said Joe Fortunato, chairman of the board of Sprouts. “I am proud of the work that our Board has put into our succession planning. The Board believes that Nick’s experience, along with his deep knowledge of our business and Sprouts’ unique culture and market position, make him the ideal leader for the next phase of the company’s journey. We are also pleased that Jack will continue serving as a trusted partner to him. This transition enables Jack’s ongoing involvement while allowing Nick’s significant depth and breadth of experience to shine even brighter.”
“It will be an honor to serve as the next CEO of Sprouts at this exciting and important time for our company,” said Konat. “We remain focused on executing our growth strategy, expanding into new markets and strengthening our connection with customers as we navigate an evolving consumer environment. I am grateful to Jack and our Board for their leadership, support, and confidence in me. I look forward to continuing to work closely with Jack to ensure a seamless transition. Since I joined Sprouts, our dedicated team and our purpose—to help people live and eat better—have inspired me every day. Looking ahead, I am confident in the opportunities before us and in our ability to build on our momentum and create long-term value for our shareholders.”
As part of this leadership transition, Joe Fortunato will serve as lead independent director beginning January 4, 2027, the first day of Sprouts’ 2027 fiscal year.
About Nick Konat
Konat joined Sprouts in March 2022 as president and chief operating officer where he has overseen the company’s operations, marketing, merchandising, supply chain, and innovation functions. Konat previously served at Petco Health and Wellness Company for over six years, culminating as chief merchandising officer. Prior to joining Petco, Konat served over nine years at Target Corporation, where he held a range of merchandising, planning, and leadership roles across the food and fashion categories. Konat also spent six years with Accenture plc, a multinational professional services company. Konat holds an honors bachelor’s degree in political science and government from St. John’s University.
About Sprouts Farmers Market, Inc.
Sprouts Farmers Market is one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States. Sprouts helps people live and eat better with fresh produce at the heart of the store and delicious discoveries for every dietary lifestyle. Always foraging for what’s fresh and innovative, Sprouts offers a carefully curated assortment of products that inspire wellness naturally, including organic, gluten-free, plant-based and non-GMO favorites. Headquartered in Phoenix, AZ, Sprouts employs approximately 36,000 team members and operates more than 480 stores in 25 states nationwide. To learn more about Sprouts and the role it plays in its communities, visit sprouts.com/about/.
Forward-Looking Statements
Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact (including those using “believes,” “will,” “look forward,” or “am confident” or the negative of these terms and other similar expressions) should be considered forward-looking statements, including, without limitation, statements regarding the company’s outlook, growth, opportunities and long-term strategy. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this release. These risks and uncertainties include, without limitation, risks related to the upcoming CEO transition; the company’s ability to execute on its long-term strategy; the company’s ability to successfully compete in its competitive industry; the company’s ability to successfully open new stores; the company’s ability to manage its growth; the company’s ability to maintain or improve its operating margins; the company’s ability to identify and react to trends in consumer preferences in a timely manner; product supply disruptions; equipment supply disruptions; general economic conditions that impact consumer spending or result in competitive responses; accounting standard changes; potential inflationary and/or deflationary trends; tariffs; and other factors as set forth from time to time in the company’s Securities and Exchange Commission filings, including, without limitation, the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The company intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more information becomes available, except as required by law.
Sprouts Farmers za poslední měsíc oslabil o 6,7 % po smíšených výsledcích za 2. čtvrtletí 2026: EPS 1,37 USD překonal odhad, tržby 2,3258 mld. USD jej mírně minuly. Tržby ze srovnatelných prodejen klesly o 1 %.
It has been about a month since the last earnings report for Sprouts Farmers (SFM - Free Report) . Shares have lost about 6.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sprouts Farmers due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Sprouts Farmers Market, Inc. before we dive into how investors and analysts have reacted as of late.
Sprouts Farmers Q2 Earnings Beat Despite Soft Comparable-Store SalesSprouts Farmers Market, Inc. reported second-quarter 2026 results, wherein the top line marginally missed the Zacks Consensus Estimate, while the bottom line beat the mark. The company continued to benefit from solid new-store productivity, strength in its Sprouts brand and double-digit e-commerce growth despite a cautious consumer environment and difficult year-over-year comparisons.
SFM’s Sales Mix Gains From Digital Strength and New StoresSprouts Farmers reported quarterly earnings of $1.37 per share, surpassing the Zacks Consensus Estimate of $1.35. The bottom line increased from $1.35 in the year-ago quarter. Net sales of this Phoenix, AZ-based natural and organic grocery retailer rose 4.7% year over year to $2,325.8 million. However, the figure marginally missed the Zacks Consensus Estimate of $2,329 million. Sales growth was driven by stellar new-store performance, partially offset by lower comparable-store sales.
Comparable-store sales declined 1% during the quarter, reflecting a cautious consumer backdrop and difficult prior-year comparisons. Management noted that comparable sales improved sequentially through May before softening in June due to exceptionally strong produce comparisons from last year. Business trends improved in July, with easier comparisons expected through the remainder of the year. E-commerce sales increased more than 12% and accounted for approximately 16% of total quarterly sales, underscoring continued strength in the company's omnichannel business. Sprouts brand continued to outperform the broader business and accounted for 26% of total sales.
The company continued to strengthen its differentiated merchandising strategy through innovation and foraging initiatives. During the quarter, Sprouts introduced approximately 1,300 new products, focusing on organic, seed-oil-free, fiber-rich, gut-health and protein-oriented offerings. Organic products now account for more than 30% of total sales, including more than half of dairy and produce sales. Management also highlighted growing traction in loyalty, personalization and first-party customer data capabilities to support long-term customer engagement.
Taking a Sneak Peek Into SFM’s MarginsGross profit increased to $900.6 million from $862.6 million in the year-ago quarter. However, the gross margin contracted 12 basis points to 38.7%, primarily due to loyalty program investments and elevated fuel costs, partially offset by benefits from self-distribution initiatives and vendor participation to support customer value. We had expected gross margin contraction of 30 basis points. Operating income came in at $174.2 million, down from $179.4 million in the year-ago quarter. Operating margin contracted 60 basis points to 7.5% from 8.1% in the prior-year period. We had expected operating margin to shrink 80 basis points.
SG&A expenses increased 5.8% year over year to $682.6 million. As a percentage of net sales, the metric deleveraged 30 basis points to 29.3%, primarily due to fixed-cost deleverage from soft comparable-store sales and continued business investments. Cost controls and lower incentive compensation provided a partial offset. We had expected SG&A expenses to deleverage 20 basis points
Sprouts Farmers’ Store UpdateSprouts Farmers opened seven new stores during the quarter, ending with 490 stores across 25 states. Management highlighted continued strong productivity from recently opened stores and noted a robust development pipeline, including more than 110 executed leases and 155 approved new stores, providing confidence in long-term expansion. The company also continued advancing its supply-chain transformation. Its Northern California distribution center became operational during the quarter, while nearly 85% of stores are now supplied with fresh meat through Sprouts distribution centers. Management believes these initiatives will improve freshness, service levels, shrink and long-term profitability while supporting affordability efforts.
A Look at SFM’s Financial PositionSprouts Farmers continued to generate healthy cash flows to support growth investments and shareholder returns. For the 26 weeks ended June 28, operating cash flow totaled $369 million, funding $186 million of capital expenditures (net of landlord reimbursements). The company repurchased 2.8 million shares for $210 million during the first six months of 2026 and had $626 million remaining under its existing $1 billion share repurchase authorization. Sprouts Farmers ended the quarter with $224 million in cash and cash equivalents and no borrowings outstanding under its $600 million revolving credit facility.
SFM Updates 2026 ViewFor the third quarter of 2026, management expects comparable-store sales in the range of down 0.5% to up 1.5%, with earnings per share between $1.20 and $1.24. Management also anticipates approximately 50 basis points of EBIT margin pressure, reflecting fixed-cost deleverage from softer comparable sales and the impact of a higher number of new-store openings compared with the year-ago quarter.
On a 52-week basis, management expects net sales growth of 5.5% to 6.5%, comparable-store sales between down 0.5% and up 0.5%, EBIT in the range of $675-$685 million, capital expenditures (net of landlord reimbursements) of approximately $310 million and 42 net new stores in 2026. Earnings per share are projected between $5.32 and $5.40, assuming at least $300 million in share repurchases. Management reiterated that fiscal 2026 will be a 53-week year, with the additional week expected to contribute approximately $200 million in sales, $28 million in EBIT and 21 cents to earnings per share.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.
VGM ScoresCurrently, Sprouts Farmers has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Sprouts Farmers has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Beacon Pointe Advisors LLC acquired a new stake in shares of Sprouts Farmers Market, Inc. (NASDAQ:SFM – Free Report) in the second quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The fund acquired 108,818 shares of the company’s stock, valued at approximately $9,204,000. Beacon Pointe Advisors LLC owned 0.12% of Sprouts Farmers Market as of its most recent filing with the Securities & Exchange Commission.
Other large investors have also recently bought and sold shares of the company. TD Private Client Wealth LLC lifted its holdings in Sprouts Farmers Market by 1,309.1% during the fourth quarter. TD Private Client Wealth LLC now owns 310 shares of the company’s stock worth $25,000 after acquiring an additional 288 shares in the last quarter. Annis Gardner Whiting Capital Advisors LLC acquired a new stake in shares of Sprouts Farmers Market during the first quarter worth about $25,000. Newbridge Financial Services Group Inc. acquired a new stake in shares of Sprouts Farmers Market during the second quarter worth about $29,000. Bell Investment Advisors Inc bought a new position in shares of Sprouts Farmers Market during the 2nd quarter valued at about $29,000. Finally, Clearstead Advisors LLC lifted its holdings in shares of Sprouts Farmers Market by 72.7% during the 4th quarter. Clearstead Advisors LLC now owns 380 shares of the company’s stock valued at $30,000 after purchasing an additional 160 shares in the last quarter.
Sprouts Farmers Market Stock Up 0.5% SFM stock opened at $81.46 on Friday. Sprouts Farmers Market, Inc. has a twelve month low of $64.75 and a twelve month high of $141.78. The company has a market cap of $7.60 billion, a price-to-earnings ratio of 15.61, a P/E/G ratio of 2.01 and a beta of 0.68. The company has a quick ratio of 0.43, a current ratio of 0.99 and a debt-to-equity ratio of 0.07. The business has a 50 day moving average price of $81.82 and a two-hundred day moving average price of $79.55.
Sprouts Farmers Market (NASDAQ:SFM – Get Free Report) last issued its earnings results on Wednesday, July 29th. The company reported $1.37 EPS for the quarter, topping the consensus estimate of $1.35 by $0.02. Sprouts Farmers Market had a return on equity of 34.84% and a net margin of 5.58%.The company had revenue of $2.33 billion during the quarter, compared to the consensus estimate of $2.32 billion. During the same period in the previous year, the company posted $1.35 EPS. The firm’s revenue for the quarter was up 4.7% compared to the same quarter last year. Sprouts Farmers Market has set its Q3 2026 guidance at 1.200-1.240 EPS and its FY 2026 guidance at 5.320-5.400 EPS. Analysts anticipate that Sprouts Farmers Market, Inc. will post 5.55 EPS for the current fiscal year. Insider Transactions at Sprouts Farmers Market In related news, Director Joseph D. O’leary sold 2,597 shares of the company’s stock in a transaction on Friday, August 14th. The stock was sold at an average price of $82.57, for a total transaction of $214,434.29. Following the completion of the sale, the director directly owned 14,710 shares in the company, valued at $1,214,604.70. This represents a 15.01% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, COO Nicholas Konat sold 12,538 shares of the firm’s stock in a transaction that occurred on Thursday, June 11th. The shares were sold at an average price of $87.90, for a total transaction of $1,102,090.20. Following the completion of the sale, the chief operating officer owned 66,119 shares in the company, valued at approximately $5,811,860.10. The trade was a 15.94% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 58,289 shares of company stock valued at $4,991,405. 1.30% of the stock is currently owned by company insiders.
Analyst Ratings Changes A number of analysts recently issued reports on SFM shares. Royal Bank Of Canada reissued an “outperform” rating and set a $114.00 target price on shares of Sprouts Farmers Market in a research note on Monday, June 1st. Evercore reaffirmed an “outperform” rating on shares of Sprouts Farmers Market in a research note on Monday, July 27th. Weiss Ratings reiterated a “hold (c)” rating on shares of Sprouts Farmers Market in a report on Wednesday, June 24th. JPMorgan Chase & Co. upgraded shares of Sprouts Farmers Market from a “neutral” rating to an “overweight” rating and upped their price target for the company from $80.00 to $103.00 in a report on Thursday, July 30th. Finally, Roth Capital set a $82.00 price objective on shares of Sprouts Farmers Market in a report on Friday, July 31st. Seven investment analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the stock currently has an average rating of “Hold” and a consensus target price of $91.58.
Get Our Latest Stock Analysis on Sprouts Farmers Market
(Free Report)
Sprouts Farmers Market, Inc (NASDAQ: SFM) is a specialty grocery retailer focused on fresh, natural and organic foods. Headquartered in Phoenix, Arizona, the company operates stores designed to offer an open-market shopping experience, emphasizing quality produce sourced from regional farmers alongside organic pantry staples, dairy, meat and seafood. Sprouts’ product assortment also includes bulk foods, vitamins and supplements, a deli and prepared foods, reflecting its commitment to wellness and affordable healthy living.
Founded in 2002 by members of the Boney family, Sprouts began as a single farmers market in Chandler, Arizona.
Read More Five stocks we like better than Sprouts Farmers Market 3 Financial Stocks Positioned for the Fed’s Next Move After Jackson Hole IREN’s AI Pivot Looks Real, But the Market Wanted a Faster Payoff After Earnings Boeing’s $131B F-15 Win: Mach 1 Momentum or Just Altitude? Okta Stock Surges 29%—Is $200 the Next Stop?
Receive News & Ratings for Sprouts Farmers Market Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Sprouts Farmers Market and related companies with MarketBeat.com's FREE daily email newsletter.
SFM za měsíc přidaly 12,2 %, ale růst brzdí slabé srovnatelné tržby a tlak na marže. Ve 2. čtvrtletí čisté tržby stouply o 5 % na 2,33 miliardy USD, zatímco srovnatelné tržby klesly o 1 %.
Key Takeaways SFM shares gained 12.2% in a month as investors weigh growth drivers against soft comps and margin pressure.Sprouts' Q2 net sales rose 5% to $2.33 billion, while comparable-store sales declined 1%.SFM's Q2 gross margin fell 12 basis points to 38.7%, with Q3 EBIT margin seen down about 50 basis points.
Sprouts Farmers Market, Inc. (SFM - Free Report) shares have gained 12.2% in the past month, putting the durability of the rebound in focus. The move comes while the specialty grocer balances healthy expansion drivers with weak comparable-store sales and margin pressure.
The next phase depends less on the stock’s recent momentum and more on whether easier comparisons, customer-engagement initiatives and new-store productivity can improve established-store trends without creating additional profitability strain.
SFM’s 12.2% Monthly Gain Raises the BarSFM’s four-week gain follows a much weaker longer-term performance profile, so the advance should not be treated as proof that operating conditions have already turned. Second-quarter results still showed pressure in the existing store base.
Management expects comparisons to become more manageable as 2026 progresses. Investors will need evidence that better traffic and basket trends can accompany unit expansion before the recent price move looks fully supported by fundamentals.
Sprouts Growth Drivers Support the MoveNew stores continue to perform well, while e-commerce sales increased more than 12% year over year in the second quarter and represented about 16% of sales. Sprouts brand products also outperformed the broader business and reached 26% of total sales.
The company launched about 1,300 products during the quarter, emphasizing organic, seed oil-free, fiber, gut health and protein offerings. Natural Grocers by Vitamin Cottage, Inc. (NGVC - Free Report) , another specialty natural and organic retailer, underscores the competitive importance of differentiated wellness assortments.
The Kroger Co. (KR - Free Report) also competes for grocery spending through stores, e-commerce and loyalty-driven personalization. That broader competitive backdrop raises the value of Sprouts’ discovery-focused assortment and first-party customer data.
SFM’s Soft Comps Challenge the RallyComparable-store sales fell 1% in the second quarter after declining 1.7% in the first quarter. Net sales still rose 5% to $2.33 billion, showing that unit expansion is carrying more of the company’s top-line growth.
The outlook points to gradual improvement rather than a sharp rebound. Comparable-store sales are expected in the range of down 0.5% to up 1.5% for the third quarter and between down 0.5% and up 0.5% for 2026, making traffic and basket recovery an important test.
Sprouts Margins Face a Near-Term TestSecond-quarter gross margin declined 12 basis points to 38.7%, reflecting loyalty investment and elevated fuel costs, partly offset by self-distribution and vendor participation. EBIT margin fell to 7.5% from 8.1% a year earlier.
Third-quarter EBIT margin is expected to decline about 50 basis points. Lower comparable sales are reducing fixed-cost leverage, while a heavier new-store opening cadence and higher depreciation add near-term pressure.
SFM’s Valuation Leaves Room for DebateSFM trades at 14.49X forward 12-month earnings, below the Zacks sub-industry’s 15.7X multiple. The stock’s current valuation is also close to its five-year median of 14.44X.
That positioning suggests the past month’s rebound has not pushed the shares far beyond their historical valuation norm. Further upside may require firmer comparable-store sales and evidence that margin pressure is becoming more manageable.
Image Source: Zacks Investment Research
SFM’s Rank and Style Scores Temper the SetupThe bottom line is mixed. Sprouts has visible growth drivers in new stores, digital sales, private label and product innovation, but weak comps and near-term margin pressure leave execution as the key variable after the stock’s 12.2% advance.
SFM currently carries a Zacks Rank #3 (Hold), supporting a measured stance. It has a VGM Score of A, along with a Value Score of B, Growth Score of B and Momentum Score of B, reflecting favorable style characteristics without overriding the neutral near-term Rank signal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sprouts Farmers Market tento týden vzrostl o více než 16 % po lepších než očekávaných výsledcích hospodaření za fiskální 2. čtvrtletí. Tržby stouply meziročně o 5 % na 2,3 miliardy USD a EPS byl 1,37 USD.
Shares of Sprouts Farmers Market (SFM +0.36%) climbed more than 16% this past week after the natural and organic grocery chain delivered healthier-than-expected financial results in its most recent quarter.
Image source: Getty Images.
New stores are fueling growth Sprouts' net sales grew 5% year over year to $2.3 billion in its fiscal second quarter, which ended on June 28.
The retailer opened 7 new stores during the quarter, bringing its total to 490 locations across 25 states.
However, Sprouts' comparable sales, which include revenue from stores open for at least 60 weeks, declined by 1%. Sprouts faced difficult comparisons to the prior-year quarter, when its competitors' supply chain disruptions drove additional traffic to its stores.
Today's Change
(
0.36
%) $
0.31
Current Price
$
87.16
Sprouts' gross margin also declined slightly to 38.7%, due in part to higher fuel costs.
All told, the company's earnings inched up 1% to $1.37 per share. That topped Wall Street's estimates, which had called for per-share profits of $1.34.
Sprouts also continues to crank out cash. Operating and free cash flow checked in at $369 million and $179 million, respectively, through the first half of 2026.
A long runway for further expansion Management expects same-store sales to turn positive in the third quarter. For the full year, the company expects net sales growth of 5.5% to 6.5%, with operating income of $675 million to $685 million and earnings per share of $5.32 to $5.40, driven by 42 net new store openings.
Looking even further ahead, Sprouts sees an opportunity to expand its store base to over 1,000 locations nationwide.
"Our pipeline remains robust with more than 110 executed leases and 155 approved new stores, giving us confidence in our ability to continue expanding access to Sprouts over the long term," chief financial officer Curtis Valentine said during a conference call with analysts.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Sprouts Farmers Market. The Motley Fool recommends the following options: long January 2028 $75 calls on Sprouts Farmers Market and short January 2028 $85 calls on Sprouts Farmers Market. The Motley Fool has a disclosure policy.
Sprouts Farmers Market ve 2. čtvrtletí zvýšil tržby o 5 % na 2,3 miliardy USD, ale srovnatelné tržby klesly o 1 %. Firma zároveň potvrdila aktualizovaný výhled na rok 2026.
3 Stocks at 52-Week Lows With Way More Upside Than DownsideSprouts Farmers Market NASDAQ: SFM reported second-quarter 2026 results that management said were in line with its expectations, as strong new-store performance offset a decline in comparable-store sales amid a challenging consumer environment.
Total sales rose 5% year over year to $2.3 billion, driven by new store openings, while comparable-store sales declined 1%. Net income was $129 million, and diluted earnings per share increased 1% to $1.37. The company opened seven stores during the quarter, ending the period with 490 stores across 25 states.
Get Sprouts Farmers Market alerts:
Why Wall Street Is Backing These 3 Comeback StocksChief Executive Officer Jack Sinclair said customers remain deliberate in their healthy-grocery spending and are managing their budgets carefully. He said Sprouts is responding by refining its value proposition, investing in affordability and personalization, expanding its differentiated assortment, and advancing supply-chain capabilities.
Sales trends and customer behavior Chief Financial Officer Curtis Valentine said comparable-sales trends improved sequentially through May before weakening in June, when Sprouts faced difficult prior-year comparisons related to strong produce performance and disruption in the natural and organic supply chain that had brought additional shoppers into its stores last year. July comparable sales were “slightly negative” but within the company’s guidance range, he said.
3 Reasons to Buy Sprouts Farmers Market Ahead of EarningsManagement said the business has seen modest improvement in both traffic and units per basket. However, Valentine said customers continue to manage the number of items they buy, particularly during periods of inflation or broader financial pressure. Produce has a larger effect on the company’s unit trends because it accounts for a significant share of the average basket.
Sprouts said it has seen an impact over the past two weeks from consumer concern related to Cyclospora, which management said has been concentrated in lettuces, salads, and related products. Valentine said the company had not experienced a product recall in its stores and described the effect on the business to date as small. The company has observed some customers shifting purchases from fresh products to frozen alternatives.
Management characterized the lower-engaged and lower-income shopper as its largest near-term opportunity. President and Chief Operating Officer Nick Konat said those customers have been taking trips less frequently and spreading out purchases, while the company’s core customer has remained relatively resilient.
Affordability, assortment and digital growth Sprouts said its first-half affordability tests produced mixed results. Sinclair said many actions increased unit movement, but broader traffic gains have developed more gradually than expected. The company plans to focus second-half investments on the items most important to customers and on targeted pricing and affordability actions intended to improve engagement.
Konat said the company’s affordability strategy includes meal solutions, Sprouts-brand products, pricing and promotions, and personalized loyalty offers. During the quarter, Sprouts highlighted fresh deli meals, a vitamin sale and $9.99 wellness bowls. Konat also cited new $29.99 family meals, fresh-made salads priced below $9, seed oil-free frozen potatoes, and a $4 fresh-baked organic sourdough bread offering.
The retailer introduced about 1,300 new items in the second quarter, including products positioned around organic, seed oil-free, fiber, gut-health and protein attributes. Organic products now account for more than 30% of total sales, including more than half of dairy and produce sales, according to Sinclair. Sprouts-brand products represented 26% of quarterly sales and outperformed the broader business.
E-commerce sales increased more than 12% and represented approximately 16% of total quarterly sales. Konat said the company’s e-commerce customers generally shop both online and in stores and are among its highest-value customers. The online basket and category mix are similar to the company’s brick-and-mortar business, with a significant contribution from fresh products and produce.
Margins, supply chain and store expansion Second-quarter gross margin declined 12 basis points year over year to 38.7%, reflecting loyalty investments and elevated fuel costs. Those pressures were partially offset by benefits from self-distribution and vendor participation supporting customer value. SG&A expense increased $38 million to $683 million and deleveraged by 30 basis points, largely due to fixed-cost deleverage from lower comparable sales and investments in the business.
For the third quarter, Sprouts expects approximately 50 basis points of EBIT margin pressure, citing lower comparable sales, fixed-cost deleverage and a higher number of new-store openings than in the prior-year period. Valentine said the company also expects fuel costs and a modest Cyclospora-related effect to pressure third-quarter gross margin.
The company’s Northern California distribution center is now operating, and nearly 85% of Sprouts stores are supplied with fresh meat through its distribution centers. Management said the shift provides greater control over freshness, service levels and shrink. Sprouts is also beginning to bring select Sprouts-brand products into its existing distribution network as it evaluates additional self-distribution opportunities.
New stores continue to perform strongly across both established and newer markets, management said. Sprouts has more than 110 executed leases and 155 approved new stores. It expects to open 42 net new stores in 2026, consisting of 43 openings and one closure of an underperforming location with an expiring lease. At least 15 openings are planned for the third quarter, which would represent the company’s largest quarterly opening cadence to date.
Updated 2026 outlook Total sales growth on a 52-week basis of 5.5% to 6.5%. Comparable-store sales between a 0.5% decline and 0.5% growth. EBIT of $675 million to $685 million. Diluted EPS of $5.32 to $5.40, assuming at least $300 million of share repurchases. Third-quarter comparable sales between a 0.5% decline and 1.5% growth, with diluted EPS of $1.20 to $1.24. Year to date, Sprouts generated $369 million in operating cash flow and spent $186 million in capital expenditures, net of landlord reimbursements. It also repurchased 2.8 million shares for $210 million through the second quarter, with $626 million remaining under its $1 billion authorization.
About Sprouts Farmers Market (NASDAQ:SFM)Sprouts Farmers Market, Inc NASDAQ: SFM is a specialty grocery retailer focused on fresh, natural and organic foods. Headquartered in Phoenix, Arizona, the company operates stores designed to offer an open-market shopping experience, emphasizing quality produce sourced from regional farmers alongside organic pantry staples, dairy, meat and seafood. Sprouts' product assortment also includes bulk foods, vitamins and supplements, a deli and prepared foods, reflecting its commitment to wellness and affordable healthy living.
Founded in 2002 by members of the Boney family, Sprouts began as a single farmers market in Chandler, Arizona.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
Should You Invest $1,000 in Sprouts Farmers Market Right Now?Before you consider Sprouts Farmers Market, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Sprouts Farmers Market wasn't on the list.
While Sprouts Farmers Market currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Learn the basics of options trading and how to use them to boost returns and manage risk with this free report from MarketBeat. Click the link below to get your free copy.
Key Takeaways Sprouts Farmers' Q2 revenues are projected to rise 4.9% to $2.33 billion.Health-focused products, loyalty gains and new stores may support Sprouts Farmers' sales growth.Consumer caution, pricing investments and fuel costs may pressure Sprouts Farmers' margins. With Sprouts Farmers Market, Inc. (SFM - Free Report) set to announce its second-quarter 2026 earnings results on July 29, after the market closes, investors are faced with a critical question: Can SFM continue its streak of surprising results, or will challenges in the grocery sector temper growth?
The Zacks Consensus Estimate for second-quarter revenues stands at $2,329 million, indicating a 4.9% increase from the prior-year reported figure. On the earnings front, the consensus estimate has remained stable at $1.35 per share over the past 30 days, matching the year-ago figure.
Sprouts Farmers has a trailing four-quarter earnings surprise of 5%, on average. In the last reported quarter, this Phoenix, AZ-based company surpassed the Zacks Consensus Estimate by 2.4%.
Image Source: Zacks Investment Research
What the Zacks Model Indicates for SFM’s Q2 EarningsAs investors prepare for Sprouts Farmers’ second-quarter results, the question looms regarding an earnings beat or miss. Our proven model does not conclusively predict an earnings beat for Sprouts Farmers this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sprouts Farmers has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Likely to Have Shaped Sprouts Farmers' Q2 OutcomeSprouts Farmers’ second-quarter performance is likely to have benefited from continued demand for differentiated health and wellness products, which remain central to its merchandising strategy. Management has emphasized that innovation and product discovery continue to resonate with customers, supported by a strong pipeline of emerging brands and a growing portfolio of Sprouts-branded offerings. The company has also been strengthening its position in organic and attribute-driven categories while expanding affordable meal solutions, helping reinforce customer loyalty and support basket growth. These initiatives are likely to have contributed to top-line performance.
The company has been leveraging its loyalty program to deepen relationships with shoppers through more personalized offers and targeted promotions. Management indicated that customer response to the enhanced loyalty platform has been encouraging, with stronger engagement from core shoppers and growing participation from newer members. At the same time, the retailer has continued refining its pricing strategy by selectively lowering prices on key everyday items and testing promotional initiatives designed to improve value perception while encouraging repeat visits and larger baskets.
Sprouts Farmers has continued investing in its supply chain, including the expansion of its self-distribution capabilities, which are intended to improve inventory management, product availability and long-term efficiency. The company has also highlighted strong performance from recently opened stores, supported by disciplined site selection and effective local marketing. Alongside these efforts, investments in store operations, employee training and technology are expected to have enhanced execution, improved the in-store shopping experience and positioned the business for sustainable long-term growth.
On the other hand, second-quarter results are likely to be tempered by a still-cautious consumer environment and ongoing pressure on discretionary spending. Management has noted that less-engaged shoppers remained under pressure, with customers continuing to trim the final items from their baskets. Margin performance may also have faced headwinds from continued investments in loyalty rewards and targeted pricing actions aimed at improving affordability, along with higher fuel-related transportation costs. These factors, coupled with continued pressure from lower comparable sales at mature stores, are likely to have weighed on profitability during the quarter. We expect second-quarter gross margin and adjusted EBIT margins to contract by 30 and 80 basis points year over year, respectively.
SFM Stock Price PerformanceShares of Sprouts Farmers have jumped 8.1% over the past three months compared with the industry’s 18.8% rise.
Sprouts Farmers has trailed Grocery Outlet Holding Corp. (GO - Free Report) but outpaced The Kroger Co. (KR - Free Report) . While shares of Kroger have declined 13.5%, Grocery Outlet has surged 22.5%.
Image Source: Zacks Investment Research
Does SFM Present a Strong Case for Value Investing?SFM’s valuation remains elevated relative to the industry. Sprouts Farmers currently trades at a forward 12-month price-to-sales (P/S) multiple of 0.73, which positions it at a premium compared to the industry’s average of 0.21. At the same time, SFM is trading below its 12-month median P/S of 0.81.
This premium positioning is especially notable when compared to peers like Grocery Outlet (with a forward 12-month P/S ratio of 0.20) and Kroger (0.23).
Image Source: Zacks Investment Research
Final Words on SFMSprouts Farmers enters its second-quarter earnings release with a balanced mix of strengths and challenges. Continued momentum in health and wellness products, loyalty initiatives, innovation, and supply-chain improvements is expected to have supported the business, but ongoing consumer caution and margin pressures from value investments could have limited the upside. With the Zacks model not signaling a likely earnings beat, investors may prefer to wait for the quarterly results and management's outlook before taking fresh positions. Existing shareholders can continue holding the stock, while prospective investors should monitor whether the company delivers sustained traffic improvement and margin stability before becoming more constructive on the shares.
Sprouts Farmers vzrostl o 2,51 % na 86,70 USD a za měsíc přidal 8,37 %. Trh čeká výsledky 29. července 2026; EPS má být 1,35 USD a výnosy 2,33 miliardy USD.
In the latest close session, Sprouts Farmers (SFM - Free Report) was up +2.51% at $86.70. The stock exceeded the S&P 500, which registered a loss of 0.22% for the day. Meanwhile, the Dow experienced a drop of 0.03%, and the technology-dominated Nasdaq saw a decrease of 0.66%.
The natural and organic food retailer's stock has climbed by 8.37% in the past month, exceeding the Retail-Wholesale sector's loss of 5.51% and the S&P 500's loss of 1.21%.
The upcoming earnings release of Sprouts Farmers will be of great interest to investors. The company's earnings report is expected on July 29, 2026. It is anticipated that the company will report an EPS of $1.35, marking stability compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $2.33 billion, indicating a 4.91% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.57 per share and revenue of $9.51 billion. These totals would mark changes of +4.9% and +8.04%, respectively, from last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Sprouts Farmers. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. As of now, Sprouts Farmers holds a Zacks Rank of #2 (Buy).
Investors should also note Sprouts Farmers's current valuation metrics, including its Forward P/E ratio of 15.18. For comparison, its industry has an average Forward P/E of 15.18, which means Sprouts Farmers is trading at no noticeable deviation to the group.
Meanwhile, SFM's PEG ratio is currently 1.79. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Food - Natural Foods Products was holding an average PEG ratio of 1.77 at yesterday's closing price.
The Food - Natural Foods Products industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 106, placing it within the top 44% of over 250 industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow SFM in the coming trading sessions, be sure to utilize Zacks.com.
