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Is Sprouts Farmers Losing Momentum or Just Hitting Tough Comps?
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Key Takeaways
SFM's Q3 comparable-store sales rose 5.9% but decelerated from stronger first-half gains.
Management cites tough comparisons and softer consumer trends as key drivers of slower growth.
SFM now guides flat to 2% comparable-store sales growth for the final quarter of 2025.
Sprouts Farmers Market, Inc. (SFM - Free Report) delivered decent third-quarter 2025 results, but deceleration in comparable-store sales momentum resulted in the top-line performance falling short of expectations. Management acknowledged that third-quarter performance moderated faster than anticipated, with sales trends weakening toward the end of the period.
Comparable-store sales rose 5.9% in the quarter, coming in below our projected 7.6% increase. Moreover, the growth rate decelerated from 10.2% and 11.7% increases registered in the second and first quarters, respectively. This moderation was attributed to tough year-over-year comparisons and a softening consumer backdrop. Sprouts Farmers had reported comparable-store sales growth of 8.4% in the third quarter of last year, supported by outsized traffic gains and an expansion of its customer base.
During the third quarter of 2025, traffic remained positive, and customer retention from last year’s surge held firm. Share of wallet was stable to slightly higher, and the slowdown reflected smaller basket additions rather than an exit of shoppers. This trend mirrors consumer caution rather than a shift in Sprouts Farmers' brand relevance. Management emphasized that macro pressure in certain trade areas, especially middle-income and younger households, contributed more to the deceleration than competitive dynamics.
This growing consumer caution shaped Sprouts Farmers’ conservative outlook for the immediate future. For the final quarter of 2025, management guided flat to 2% comparable store sales growth. The company had reported comparable-store sales growth of 11.5% in the fourth quarter of last year.
Sprouts Farmers is navigating tough comparisons and a cautious consumer environment, but not losing traction in its core strategy. The underlying drivers of the business remain intact, supported by steady customer retention, expanding private-label penetration, and solid engagement through its loyalty and digital platforms.
What the Latest Metrics Say About Sprouts Farmers
Sprouts Farmers, which competes with Walmart Inc. (WMT - Free Report) and Target Corporation (TGT - Free Report) , has seen its shares drop 42.2% over the past year compared with the industry’s decline of 14.5%. While shares of Walmart have rallied 21.9%, Target shares have declined 42.6% during the same period.
Image Source: Zacks Investment Research
From a valuation standpoint, SFM's forward 12-month price-to-sales ratio stands at 0.83, higher than the industry’s ratio of 0.24. SFM carries a Value Score of B. Sprouts Farmers is trading at a discount to Walmart (with a forward 12-month P/S ratio of 1.11) but at a premium to Target (0.38).
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 14.2% and 40.5%, respectively.
Image Source: Zacks Investment Research
Sprouts Farmers currently has a Zacks Rank #5 (Strong Sell).
Image: Bigstock
Is Sprouts Farmers Losing Momentum or Just Hitting Tough Comps?
Key Takeaways
Sprouts Farmers Market, Inc. (SFM - Free Report) delivered decent third-quarter 2025 results, but deceleration in comparable-store sales momentum resulted in the top-line performance falling short of expectations. Management acknowledged that third-quarter performance moderated faster than anticipated, with sales trends weakening toward the end of the period.
Comparable-store sales rose 5.9% in the quarter, coming in below our projected 7.6% increase. Moreover, the growth rate decelerated from 10.2% and 11.7% increases registered in the second and first quarters, respectively. This moderation was attributed to tough year-over-year comparisons and a softening consumer backdrop. Sprouts Farmers had reported comparable-store sales growth of 8.4% in the third quarter of last year, supported by outsized traffic gains and an expansion of its customer base.
During the third quarter of 2025, traffic remained positive, and customer retention from last year’s surge held firm. Share of wallet was stable to slightly higher, and the slowdown reflected smaller basket additions rather than an exit of shoppers. This trend mirrors consumer caution rather than a shift in Sprouts Farmers' brand relevance. Management emphasized that macro pressure in certain trade areas, especially middle-income and younger households, contributed more to the deceleration than competitive dynamics.
This growing consumer caution shaped Sprouts Farmers’ conservative outlook for the immediate future. For the final quarter of 2025, management guided flat to 2% comparable store sales growth. The company had reported comparable-store sales growth of 11.5% in the fourth quarter of last year.
Sprouts Farmers is navigating tough comparisons and a cautious consumer environment, but not losing traction in its core strategy. The underlying drivers of the business remain intact, supported by steady customer retention, expanding private-label penetration, and solid engagement through its loyalty and digital platforms.
What the Latest Metrics Say About Sprouts Farmers
Sprouts Farmers, which competes with Walmart Inc. (WMT - Free Report) and Target Corporation (TGT - Free Report) , has seen its shares drop 42.2% over the past year compared with the industry’s decline of 14.5%. While shares of Walmart have rallied 21.9%, Target shares have declined 42.6% during the same period.
Image Source: Zacks Investment Research
From a valuation standpoint, SFM's forward 12-month price-to-sales ratio stands at 0.83, higher than the industry’s ratio of 0.24. SFM carries a Value Score of B. Sprouts Farmers is trading at a discount to Walmart (with a forward 12-month P/S ratio of 1.11) but at a premium to Target (0.38).
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 14.2% and 40.5%, respectively.
Image Source: Zacks Investment Research
Sprouts Farmers currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.