Sprouts Farmers Market shares rallied 11.7% following earnings, driven by new store growth, improving e-commerce sales, and an encouraging outlook that suggests the toughest comparable store sales comps are behind the company.
- Total sales rose 5% year-over-year to $2.3 billion, supported by the addition of seven new stores and a 1% decline in comparable store sales.
- E-commerce sales grew over 12%, accounting for approximately 16% of total quarterly sales, while Sprouts brand sales made up 26% of total revenue.
- Gross margin contracted slightly by 12 basis points to 38.7%, pressured by loyalty program investments and elevated fuel costs, partially offset by self-distribution efficiencies.
- SG&A expenses increased by $38 million, reflecting deleverage from lower comps and ongoing investments, despite disciplined cost management efforts.
- Management updated guidance for 2026 with total sales growth of 5.5% to 6.5% and comps between -0.5% to +0.5%, noting gradual improvement in customer engagement as the year progresses.
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