Sprouts Farmers Market Reports Strong 2025 Results, Issues Cautious 2026 Outlook with Decelerating Growth
Summary
Sprouts Farmers Market reported strong Q4 and full-year 2025 results but provided a cautious 2026 outlook, projecting a significant slowdown in comparable store sales and flat underlying diluted EPS growth.
Key Events
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Strong Full-Year 2025 Performance
The company reported full-year 2025 net sales of $8.8 billion, a 14% increase from 2024, with comparable store sales growth of 7.3% and diluted earnings per share (EPS) of $5.31, a 42% increase from 2024.
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Cautious 2026 Outlook
For the full-year 2026, Sprouts projects comparable store sales growth of -1% to 1% and diluted EPS (on a 52-week basis) between $5.28 and $5.44, indicating a significant deceleration from 2025's growth rates. Q1 2026 comparable store sales are expected to be negative, ranging from -3% to -1%.
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New Share Buyback Program Authorized
The Board authorized a new $1 billion share buyback program. In 2025, the company repurchased 4.0 million shares for a total investment of $472 million.
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Continued Store Expansion
Sprouts opened 37 new stores in 2025, bringing the total to 477 stores in 24 states, and plans to open 40+ new stores in 2026.
Analysis
Sprouts Farmers Market delivered robust financial performance in 2025, marked by significant net sales and diluted EPS growth. However, the company's outlook for 2026 signals a notable deceleration in growth, with comparable store sales projected to be flat to negative for the full year and diluted EPS (on a 52-week basis) expected to be largely flat compared to 2025. This cautious guidance, particularly the negative comparable store sales forecast for Q1 2026, suggests a challenging operating environment ahead. While the authorization of a new $1 billion share buyback program is a positive for shareholder returns, the market is likely to focus on the slowdown in core business metrics, especially given the stock is trading near its 52-week low.
At the time of this filing, SFM was trading at $66.05 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $6.6B. The 52-week trading range was $64.75 to $182.00. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.