Sprouts Farmers Market, Inc. Q3 2026 Earnings Recap

Sprouts shares fell 22.6% after the company cut its outlook amid weakening comparable sales and said traffic, units, and frequency were not recovering even as comparisons eased. Management also cited a need to accelerate investments in affordability and execution, adding pressure to near-term profitability.

Key Takeaways

• Q3 comparable sales declined 0.9%; transactions fell 3.3%, partly offset by a 2.5% increase in basket. Cyclospora reduced comps by approximately 60 basis points.
• Full-year 2026 outlook now calls for comparable sales of approximately **-1.7%** and total sales growth of approximately **4.3%** on a 52-week basis; expected EBIT is approximately **$605 million**.
• Gross margin fell 50 basis points to 38.2%, reflecting higher shrink tied to lower sales and the cyclospora disruption, as well as higher fuel costs.
• Q3 sales increased 5% to $2.3 billion, supported by new stores; e-commerce sales grew 12% and exceeded 16% of total sales. Diluted EPS was $1.21, down 1% year over year.
• Sprouts opened 15 stores in the quarter and still expects 42 net new stores in 2026. It returned $299 million through Q3 via share repurchases and expects full-year repurchases to exceed $300 million.