We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Sprouts Farmers Set for Another Surprise This Earnings Season?
Read MoreHide Full Article
Key Takeaways
Sprouts Farmers to report Q4 earnings on Feb. 19, after the close, with revenues seen up 8.2% to $2,160M.
SFM's Q4 EPS estimate is 89 cents, up 12.7% year over year, after a 10% average surprise over four quarters.
Sprouts Farmers sees slower comps as tough compares, softer demand and normalizing margins shape Q4.
With Sprouts Farmers Market, Inc. (SFM - Free Report) set to announce its fourth-quarter 2025 earnings results on Feb. 19, after the market closes, investors are faced with a critical question: Can SFM continue its streak of surprising results or will challenges in the grocery sector temper growth?
Sprouts Farmers has been capitalizing on the growing demand for organic and natural products, positioning itself as a strong player in the grocery space. Analysts are optimistic about Sprouts Farmers' upcoming earnings.
The Zacks Consensus Estimate for fourth-quarter revenues stands at $2,160 million, which indicates an increase of 8.2% from the prior-year reported figure. On the earnings front, the consensus estimate has been stable at 89 cents a share over the past 30 days, implying a 12.7% year-over-year rise.
Sprouts Farmers has a trailing four-quarter earnings surprise of 10%, on average. In the last reported quarter, this Phoenix, AZ-based company surpassed the Zacks Consensus Estimate by a margin of 4.3%.
What the Zacks Model Indicates for SFM’s Q4 Earnings
As investors prepare for Sprouts Farmers’ fourth-quarter results, the question looms regarding earnings beat or miss. Our proven model does not conclusively predict an earnings beat for Sprouts Farmers this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sprouts Farmers has a Zacks Rank #2 but an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise
Sprouts Farmers’ emphasis on product innovation, technology and targeted marketing, along with everyday competitive pricing, bodes well. The company has been steadily increasing its footprint in the natural and organic space, driven by strong demand in this segment. The introduction of unique and health-oriented products attracts a diverse customer base and drives sales growth.
From plant-based proteins to gluten-free snacks and keto-friendly foods, Sprouts Farmers ensures that its shelves are stocked with the latest and most sought-after health products. The company’s commitment to developing innovative products under its private label has resonated well with consumers, contributing to higher profit margins. The transition toward greater self-distribution in fresh meat and seafood is expected to have supported better in-stocks and operational execution.
The factors mentioned above are likely to have favorably impacted the top line. We expect comparable store sales growth of 1.1% for the quarter under review. This shows a deceleration from 5.9%, 10.2% and 11.7% growth registered in the third, second and first quarters, respectively. Management had earlier signaled this moderation due to tough year-over-year comparisons and a softening consumer backdrop.
Sprouts Farmers has made substantial investments in its digital infrastructure, resulting in a robust omnichannel shopping experience. Partnerships with Uber Eats, DoorDash and Instacart have accelerated online visibility, driving a 21% year-over-year rise in e-commerce sales in the third quarter. As consumers increasingly prefer shopping online for convenience, SFM’s commitment to enhancing its digital capabilities positions it to capture market share.
On its last earnings call, management indicated that both gross margin and SG&A rates are expected to normalize in the fourth quarter, with the EBIT margin expected to remain stable. We expect gross margin expansion to slow down to 20 basis points in the final quarter, following expansion of 60, 90 and 130 basis points in the preceding three quarters. We anticipate SG&A expenses to increase 8.4% year over year in the fourth quarter. As a percentage of net sales, we foresee SG&A expenses to deleverage 20 basis points to 31%.
SFM Stock Price Performance
Shares of Sprouts Farmers have declined 15% over the past three months, underperforming the industry’s 2.8% drop.
Sprouts Farmers has also lagged behind competitors such as Grocery Outlet Holding Corp. (GO - Free Report) , Albertsons Companies, Inc. (ACI - Free Report) and The Kroger Co. (KR - Free Report) . While shares of Grocery Outlet have dropped 6%, Kroger and Albertsons Companies have advanced 5.7% and 2.4%, respectively.
Image Source: Zacks Investment Research
Does SFM Present a Strong Case for Value Investing?
Despite the recent drop in the stock price, SFM’s valuation remains elevated relative to the industry. Sprouts Farmers currently trades at a forward 12-month price-to-sales (P/S) multiple of 0.68, which positions it at a premium compared to the industry’s average of 0.19. At the same time, SFM is trading below its 12-month median P/S of 1.50X.
This premium positioning is especially notable when compared to peers like Grocery Outlet (with a forward 12-month P/S ratio of 0.20), Albertsons Companies (0.12) and Kroger (0.30).
Image Source: Zacks Investment Research
Final Words on SFM
Sprouts Farmers approaches its fourth-quarter earnings release with solid momentum in its core strategy — differentiated health-and-wellness merchandising, expanding private label, and continued investment in digital and supply-chain capabilities. Tougher comparisons, a soft consumer environment and normalizing margin dynamics could keep results more measured than recent quarters. While the Zacks model doesn’t signal another beat, SFM’s track record of execution and resilient positioning in natural and organic grocery leave room for upside if demand holds and operations stay tight.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Is Sprouts Farmers Set for Another Surprise This Earnings Season?
Key Takeaways
With Sprouts Farmers Market, Inc. (SFM - Free Report) set to announce its fourth-quarter 2025 earnings results on Feb. 19, after the market closes, investors are faced with a critical question: Can SFM continue its streak of surprising results or will challenges in the grocery sector temper growth?
Sprouts Farmers has been capitalizing on the growing demand for organic and natural products, positioning itself as a strong player in the grocery space. Analysts are optimistic about Sprouts Farmers' upcoming earnings.
The Zacks Consensus Estimate for fourth-quarter revenues stands at $2,160 million, which indicates an increase of 8.2% from the prior-year reported figure. On the earnings front, the consensus estimate has been stable at 89 cents a share over the past 30 days, implying a 12.7% year-over-year rise.
Sprouts Farmers has a trailing four-quarter earnings surprise of 10%, on average. In the last reported quarter, this Phoenix, AZ-based company surpassed the Zacks Consensus Estimate by a margin of 4.3%.
What the Zacks Model Indicates for SFM’s Q4 Earnings
As investors prepare for Sprouts Farmers’ fourth-quarter results, the question looms regarding earnings beat or miss. Our proven model does not conclusively predict an earnings beat for Sprouts Farmers this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sprouts Farmers has a Zacks Rank #2 but an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise
Sprouts Farmers Market, Inc. price-consensus-eps-surprise-chart | Sprouts Farmers Market, Inc. Quote
Factors Shaping Sprouts Farmers' Q4 Outcome
Sprouts Farmers’ emphasis on product innovation, technology and targeted marketing, along with everyday competitive pricing, bodes well. The company has been steadily increasing its footprint in the natural and organic space, driven by strong demand in this segment. The introduction of unique and health-oriented products attracts a diverse customer base and drives sales growth.
From plant-based proteins to gluten-free snacks and keto-friendly foods, Sprouts Farmers ensures that its shelves are stocked with the latest and most sought-after health products. The company’s commitment to developing innovative products under its private label has resonated well with consumers, contributing to higher profit margins. The transition toward greater self-distribution in fresh meat and seafood is expected to have supported better in-stocks and operational execution.
The factors mentioned above are likely to have favorably impacted the top line. We expect comparable store sales growth of 1.1% for the quarter under review. This shows a deceleration from 5.9%, 10.2% and 11.7% growth registered in the third, second and first quarters, respectively. Management had earlier signaled this moderation due to tough year-over-year comparisons and a softening consumer backdrop.
Sprouts Farmers has made substantial investments in its digital infrastructure, resulting in a robust omnichannel shopping experience. Partnerships with Uber Eats, DoorDash and Instacart have accelerated online visibility, driving a 21% year-over-year rise in e-commerce sales in the third quarter. As consumers increasingly prefer shopping online for convenience, SFM’s commitment to enhancing its digital capabilities positions it to capture market share.
On its last earnings call, management indicated that both gross margin and SG&A rates are expected to normalize in the fourth quarter, with the EBIT margin expected to remain stable. We expect gross margin expansion to slow down to 20 basis points in the final quarter, following expansion of 60, 90 and 130 basis points in the preceding three quarters. We anticipate SG&A expenses to increase 8.4% year over year in the fourth quarter. As a percentage of net sales, we foresee SG&A expenses to deleverage 20 basis points to 31%.
SFM Stock Price Performance
Shares of Sprouts Farmers have declined 15% over the past three months, underperforming the industry’s 2.8% drop.
Sprouts Farmers has also lagged behind competitors such as Grocery Outlet Holding Corp. (GO - Free Report) , Albertsons Companies, Inc. (ACI - Free Report) and The Kroger Co. (KR - Free Report) . While shares of Grocery Outlet have dropped 6%, Kroger and Albertsons Companies have advanced 5.7% and 2.4%, respectively.
Image Source: Zacks Investment Research
Does SFM Present a Strong Case for Value Investing?
Despite the recent drop in the stock price, SFM’s valuation remains elevated relative to the industry. Sprouts Farmers currently trades at a forward 12-month price-to-sales (P/S) multiple of 0.68, which positions it at a premium compared to the industry’s average of 0.19. At the same time, SFM is trading below its 12-month median P/S of 1.50X.
This premium positioning is especially notable when compared to peers like Grocery Outlet (with a forward 12-month P/S ratio of 0.20), Albertsons Companies (0.12) and Kroger (0.30).
Image Source: Zacks Investment Research
Final Words on SFM
Sprouts Farmers approaches its fourth-quarter earnings release with solid momentum in its core strategy — differentiated health-and-wellness merchandising, expanding private label, and continued investment in digital and supply-chain capabilities. Tougher comparisons, a soft consumer environment and normalizing margin dynamics could keep results more measured than recent quarters. While the Zacks model doesn’t signal another beat, SFM’s track record of execution and resilient positioning in natural and organic grocery leave room for upside if demand holds and operations stay tight.