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Sprouts Farmers Q1 Earnings Surpass Estimates, Comp Sales Up 11.7%
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Sprouts Farmers Market, Inc. (SFM - Free Report) reported better-than-expected first-quarter 2025 results, wherein the top and bottom lines increased year over year. Decent comparable sales, positive traffic trends, accelerating unit growth and robust e-commerce favorably impacted the quarterly performance. Following the results, management provided an upbeat outlook for 2025.
SFM’s Quarterly Performance: Key Metrics and Insights
The renowned grocery retailer delivered quarterly earnings of $1.81 per share, which beat the Zacks Consensus Estimate of $1.54. The bottom line increased 61.6% from $1.12 reported in the year-ago period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net sales of this Phoenix, AZ-based company came in at $2,236.4 million, which beat the Zacks Consensus Estimate of $2,195 million. The metric rose 18.7% on a year-over-year basis. The growth was driven by sales from the new stores and a jump in comparable store sales.
Comparable store sales increased 11.7% during the quarter under review, better than our estimate of a 10.5% jump. We note that e-commerce sales grew 28% and represented 15% of total sales in the quarter.
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise
Gross profit rose 22.7% year over year to $886.4 million in the quarter, while the gross margin expanded 129 basis points to 39.6% from the prior-year quarter, surpassing our expected 50 basis points expansion.
Sprouts Farmers reported operating income of $226.3 million, up from $148.3 million reported in the year-ago period. The operating margin expanded 220 basis points to 10.1%. We had envisioned an operating margin expansion of 140 basis points for the quarter under discussion.
SG&A expenses increased 15.5% year over year to $623.2 million. As a percentage of net sales, the metric leveraged 80 basis points to 27.9%, in sync with our projection.
Sprouts Farmers’ Store Update
During the quarter, Sprouts Farmers opened three new stores, taking the total count to 443 stores in 24 states as of March 30, 2025. It plans to open at least 35 new stores in 2025.
SFM’s Financial Health Snapshot
Sprouts Farmers ended the quarter with cash and cash equivalents of $285.7 million, long-term debt and finance lease liabilities of roughly $6.9 million and stockholders’ equity of $1,288 million. During the quarter, the company repurchased 1.6 million shares for a total investment of $219 million.
Sprouts Farmers generated cash from operations of $299.1 million and spent $49 million on capital expenditures, net of landlord reimbursement, year to date through March 30, 2025. Management anticipates capital expenditures (net of landlord reimbursements) in the range of $230-$250 million for 2025.
What to Expect From Sprouts Farmers in Fiscal 2025?
For the second quarter of 2025, Sprouts Farmers expects comparable store sales growth between 6.5% and 8.5%. It envisions adjusted earnings in the band of $1.19-$1.23 per share compared with 94 cents reported in the year-ago period.
Sprouts Farmers anticipates 2025 net sales growth between 12% and 14% and comparable store sales growth in the range of 5.5%-7.5%. Management has guided adjusted earnings before interest and taxes between $640 million and $660 million for 2025.
The company projects full-year earnings between $4.94 and $5.10 per share, indicating growth from the $3.75 per share reported in 2024.
Shares of this Zacks Rank #2 (Buy) company have risen 29.7% in the past six months compared with the industry’s growth of 15.8%.
The Zacks Consensus Estimate for Mondelez International’s current financial-year sales implies growth of 3.7% from the year-ago reported numbers.
United Natural Foods (UNFI - Free Report) , which, together with its subsidiaries, distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada, currently carries a Zacks Rank #2. UNFI has a trailing four-quarter earnings surprise of 408.7%, on average.
The Zacks Consensus Estimate for United Natural Foods’ current financial year sales calls for growth of 1.9% from the year-ago reported numbers.
Utz Brands (UTZ - Free Report) , which is engaged in the manufacture, marketing and distribution of snack foods, currently carries a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for UTZ’s current financial-year sales and earnings suggests growth of 1.4% and 10.4%, respectively, from the year-ago reported numbers.
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Sprouts Farmers Q1 Earnings Surpass Estimates, Comp Sales Up 11.7%
Sprouts Farmers Market, Inc. (SFM - Free Report) reported better-than-expected first-quarter 2025 results, wherein the top and bottom lines increased year over year. Decent comparable sales, positive traffic trends, accelerating unit growth and robust e-commerce favorably impacted the quarterly performance. Following the results, management provided an upbeat outlook for 2025.
SFM’s Quarterly Performance: Key Metrics and Insights
The renowned grocery retailer delivered quarterly earnings of $1.81 per share, which beat the Zacks Consensus Estimate of $1.54. The bottom line increased 61.6% from $1.12 reported in the year-ago period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net sales of this Phoenix, AZ-based company came in at $2,236.4 million, which beat the Zacks Consensus Estimate of $2,195 million. The metric rose 18.7% on a year-over-year basis. The growth was driven by sales from the new stores and a jump in comparable store sales.
Comparable store sales increased 11.7% during the quarter under review, better than our estimate of a 10.5% jump. We note that e-commerce sales grew 28% and represented 15% of total sales in the quarter.
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise
Sprouts Farmers Market, Inc. price-consensus-eps-surprise-chart | Sprouts Farmers Market, Inc. Quote
A Sneak Peek Into SFM’s Margins
Gross profit rose 22.7% year over year to $886.4 million in the quarter, while the gross margin expanded 129 basis points to 39.6% from the prior-year quarter, surpassing our expected 50 basis points expansion.
Sprouts Farmers reported operating income of $226.3 million, up from $148.3 million reported in the year-ago period. The operating margin expanded 220 basis points to 10.1%. We had envisioned an operating margin expansion of 140 basis points for the quarter under discussion.
SG&A expenses increased 15.5% year over year to $623.2 million. As a percentage of net sales, the metric leveraged 80 basis points to 27.9%, in sync with our projection.
Sprouts Farmers’ Store Update
During the quarter, Sprouts Farmers opened three new stores, taking the total count to 443 stores in 24 states as of March 30, 2025. It plans to open at least 35 new stores in 2025.
SFM’s Financial Health Snapshot
Sprouts Farmers ended the quarter with cash and cash equivalents of $285.7 million, long-term debt and finance lease liabilities of roughly $6.9 million and stockholders’ equity of $1,288 million. During the quarter, the company repurchased 1.6 million shares for a total investment of $219 million.
Sprouts Farmers generated cash from operations of $299.1 million and spent $49 million on capital expenditures, net of landlord reimbursement, year to date through March 30, 2025.
Management anticipates capital expenditures (net of landlord reimbursements) in the range of $230-$250 million for 2025.
What to Expect From Sprouts Farmers in Fiscal 2025?
For the second quarter of 2025, Sprouts Farmers expects comparable store sales growth between 6.5% and 8.5%. It envisions adjusted earnings in the band of $1.19-$1.23 per share compared with 94 cents reported in the year-ago period.
Sprouts Farmers anticipates 2025 net sales growth between 12% and 14% and comparable store sales growth in the range of 5.5%-7.5%. Management has guided adjusted earnings before interest and taxes between $640 million and $660 million for 2025.
The company projects full-year earnings between $4.94 and $5.10 per share, indicating growth from the $3.75 per share reported in 2024.
Shares of this Zacks Rank #2 (Buy) company have risen 29.7% in the past six months compared with the industry’s growth of 15.8%.
Other Stocks Looking Red Hot
Mondelez International (MDLZ - Free Report) , which manufactures, markets, and sells snack food and beverage products, currently carries a Zacks Rank #2. MDLZ has a trailing four-quarter earnings surprise of 9.8%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Mondelez International’s current financial-year sales implies growth of 3.7% from the year-ago reported numbers.
United Natural Foods (UNFI - Free Report) , which, together with its subsidiaries, distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada, currently carries a Zacks Rank #2. UNFI has a trailing four-quarter earnings surprise of 408.7%, on average.
The Zacks Consensus Estimate for United Natural Foods’ current financial year sales calls for growth of 1.9% from the year-ago reported numbers.
Utz Brands (UTZ - Free Report) , which is engaged in the manufacture, marketing and distribution of snack foods, currently carries a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for UTZ’s current financial-year sales and earnings suggests growth of 1.4% and 10.4%, respectively, from the year-ago reported numbers.