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Can Sprouts Farmers Market Hit Its Goal of 1000 Stores Nationwide?
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Key Takeaways
SFM plans to grow from 443 to 1,000 stores, targeting 35 new openings in 2025 alone.
A smaller-box format and 120 approved sites support SFM's nationwide expansion strategy.
SFM stock is up 27.7% YTD, with projected 2025 EPS and sales growth of 35.5% and 13.6%.
Sprouts Farmers Market, Inc. (SFM - Free Report) has set an ambitious long-term goal of expanding its footprint to more than 1,000 stores nationwide. This target signifies substantial growth from its current 443 stores across 24 states as of March 30, 2025. The company opened three new stores in the first quarter of 2025 and plans to add at least 35 more throughout the full year, indicating a consistent unit growth strategy.
A key driver of this expansion is Sprouts Farmers' focus on a more efficient, smaller-box store format, aimed at reducing growth risks and boosting new store performance. This strategy, along with the pursuit of new locations and efforts to improve supply-chain capacity, including potential sites in the Northeast and Midwest, is essential for supporting such a large network of stores.
New stores open with an average of $13 million in first-year sales and ramp up another 20-25% over the following four years. With strong cash-on-cash returns and break-even expected in year one, each store is a profit center. The company’s real estate pipeline already includes nearly 120 approved sites and more than 85 signed leases, signaling a clear path toward its long-term goal of 1,000 stores.
Nearly 80% of stores are within 250 miles of a distribution center, and Sprouts Farmers is deepening its supply chain with self-distribution of fresh categories like meat and seafood. The company's long-term strategic target includes approximately 10%-unit growth, reinforcing its commitment to achieving the 1,000-store milestone.
Store Count Showdown: Costco & Dollar General vs. Spouts
Within the retail sector, Sprouts Farmers operates alongside giants like Costco Wholesale Corporation (COST - Free Report) and Dollar General Corporation (DG - Free Report) , each with distinct models. Costco plans to add 24 net new locations in fiscal 2025, taking the total global warehouse count to 914, including 629 locations in the United States. Costco’s consistent traffic growth and a 92.7% U.S. renewal rate underscore brand loyalty and operational strength.
Dollar General, by contrast, operates more than 20,000 stores nationwide. In fiscal 2025, Dollar General is set to carry out an ambitious real estate agenda encompassing roughly 4,885 projects. This includes the planned launch of approximately 575 new U.S. stores and up to 15 additional locations in Mexico. Alongside expansion, Dollar General is focusing on improving its existing footprint through the remodeling of about 2,000 stores under its "Project Renovate" initiative and another 2,250 stores through the "Project Elevate" program.
SFM’s Price Performance, Valuation and Estimates
Sprouts Farmers stock has been a standout performer, with shares rallying 27.7% year to date, outpacing the industry’s growth of 15.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, SFM's forward 12-month price-to-sales ratio stands at 1.72, higher than the industry’s ratio of 0.26. SFM carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings per share implies year-over-year growth of 13.6% and 35.5%, respectively.
Image: Bigstock
Can Sprouts Farmers Market Hit Its Goal of 1000 Stores Nationwide?
Key Takeaways
Sprouts Farmers Market, Inc. (SFM - Free Report) has set an ambitious long-term goal of expanding its footprint to more than 1,000 stores nationwide. This target signifies substantial growth from its current 443 stores across 24 states as of March 30, 2025. The company opened three new stores in the first quarter of 2025 and plans to add at least 35 more throughout the full year, indicating a consistent unit growth strategy.
A key driver of this expansion is Sprouts Farmers' focus on a more efficient, smaller-box store format, aimed at reducing growth risks and boosting new store performance. This strategy, along with the pursuit of new locations and efforts to improve supply-chain capacity, including potential sites in the Northeast and Midwest, is essential for supporting such a large network of stores.
New stores open with an average of $13 million in first-year sales and ramp up another 20-25% over the following four years. With strong cash-on-cash returns and break-even expected in year one, each store is a profit center. The company’s real estate pipeline already includes nearly 120 approved sites and more than 85 signed leases, signaling a clear path toward its long-term goal of 1,000 stores.
Nearly 80% of stores are within 250 miles of a distribution center, and Sprouts Farmers is deepening its supply chain with self-distribution of fresh categories like meat and seafood. The company's long-term strategic target includes approximately 10%-unit growth, reinforcing its commitment to achieving the 1,000-store milestone.
Store Count Showdown: Costco & Dollar General vs. Spouts
Within the retail sector, Sprouts Farmers operates alongside giants like Costco Wholesale Corporation (COST - Free Report) and Dollar General Corporation (DG - Free Report) , each with distinct models. Costco plans to add 24 net new locations in fiscal 2025, taking the total global warehouse count to 914, including 629 locations in the United States. Costco’s consistent traffic growth and a 92.7% U.S. renewal rate underscore brand loyalty and operational strength.
Dollar General, by contrast, operates more than 20,000 stores nationwide. In fiscal 2025, Dollar General is set to carry out an ambitious real estate agenda encompassing roughly 4,885 projects. This includes the planned launch of approximately 575 new U.S. stores and up to 15 additional locations in Mexico. Alongside expansion, Dollar General is focusing on improving its existing footprint through the remodeling of about 2,000 stores under its "Project Renovate" initiative and another 2,250 stores through the "Project Elevate" program.
SFM’s Price Performance, Valuation and Estimates
Sprouts Farmers stock has been a standout performer, with shares rallying 27.7% year to date, outpacing the industry’s growth of 15.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, SFM's forward 12-month price-to-sales ratio stands at 1.72, higher than the industry’s ratio of 0.26. SFM carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings per share implies year-over-year growth of 13.6% and 35.5%, respectively.
Image Source: Zacks Investment Research
Sprouts Farmers Market currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.