Start here if you're new
what it is
Sprouts sells natural and organic groceries through 440 specialty stores in 24 states.
how it gets paid
Last year Sprouts Farmers made $8.8B in revenue. Produce was the main engine at $2.8B, or 32% of sales.
why it's growing
Revenue grew 14.1% last year. The $0.92 print versus $0.89 expected showed the chain still hits numbers.
what just happened
Sprouts posted $0.92 a share versus $0.89 expected.
At a glance
B+ balance sheet — decent shape, but not bulletproof
80/100 earnings predictability — you can trust these numbers
15.3x trailing p/e — the market's not buying it — or you found a deal
32.0% return on capital — every dollar works hard here
xvary composite: 57/100 — below average
What they do
Sprouts sells natural and organic groceries through 440 specialty stores in 24 states.
Sprouts has 440 stores across 24 states. That is not huge next to Kroger's 2,700-plus stores, but it is focused. Comp store sales growth means same-store sales, or sales at stores open at least a year. It hit 7.6% in 2024, versus 3.4% in 2023 and 2.2% in 2022. You are watching the same stores pull in more money.
How they make money
$8.8B
annual revenue · their business grew +14.1% last year
Produce
$2.8B
+8.0%
Grocery & pantry
$2.3B
+12.0%
Meat & seafood
$1.5B
+15.0%
Vitamins & supplements
$1.0B
+18.0%
Frozen, dairy & prepared
$1.2B
+10.0%
The products that matter
sells fresh and natural groceries
Fresh-Focused Grocery Stores
$8.8B revenue · entire business
it's the whole company: $8.8B in revenue, 5.8% net margin, and 4.2% sales growth from a year ago. If store productivity slows, there is nowhere else for the earnings story to hide.
100% of revenue
Key numbers
$10B
FY26 sales
That is $1.2B above the $8.8B base. You are paying for 14% more revenue, not a new business.
$5.85
FY26 EPS
That is 56 cents above trailing FY2025 EPS of $5.27. More profit per share is what the stock needs.
15.3x
trailing P/E
You are paying 15.3 times past earnings. That is fair for a grocer with 32.0% return on capital.
32.0%
return on capital
Every dollar put into the business has thrown off 32 cents of operating profit. That is a hard number to fake.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 45 / 100
- long-term debt $53M (1% of capital)
- net profit margin 5.7% — keeps 6 cents of every dollar in revenue
- return on equity 33% — $0.33 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in SFM 3 years ago → it's now worth $24,730.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Sprouts posted $0.92 a share versus $0.89 expected.
That was a 3.37% beat, or $0.03 per share. Revenue sat at $8.8B trailing, and gross margin was 39.1%.
$8.8B
revenue
$0.92
eps
39.1%
gross margin
the number that mattered
The $0.92 print versus $0.89 expected showed the chain still hits numbers, even as same-store sales cooled.
-
sprouts has been turning in stellar results.
-
september-quarter earnings rose 34% vs. prior year, to $1.22 a share, surpassing the company’s guidance of $1.12-$1.16.
-
same-store sales growth of 5.9% decelerated from the low-double-digit gains registered in the first half of 2025, but still compared favorably to the low-single-digit increases being reported by conventional supermarket operators, such as kroger and albertsons.meanwhile, new store development is proceeding at a nice clip (more below), and improvements in the gross margin have been providing an added boost to the bottom line.
-
the company’s december-quarter performance may well look rather pedestrian.
-
most management indicated that comps will probably be flat to up 2%, as building on the 11.5% growth recorded in 2024’s final stanza figures to be a challenge.too, further progress on the gross margin seems likely to be fairly modest, while earnings are apt to finish a dime per share below our earlier estimate of $0.99. moving into 2026, the food retailer should have some factors working in its favor, including the ongoing expansion of the store base, the introduction of additional private label products, and the maturation of the loyalty program that was rolled out last year.
source: company earnings report, 2026
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What could go wrong
Sprouts earns better margins than most grocers. That is the attraction. It is also the vulnerability, because a grocery stock gets punished fast when margin advantage and comp momentum fade at the same time.
med
pricing pressure from larger grocers
The source notes flag the Kroger–Albertsons situation as a competitive wildcard. Whatever the final market structure looks like, the issue for Sprouts is simple: bigger chains can absorb more promotions and still keep moving volume.
At a 5.8% net margin and 9.2% operating margin, Sprouts does not have endless room for a price war. A little margin pressure matters fast.
med
comp slowdown after a strong run
Same-store sales reached 5.9%, but management also pointed to flat–2% comps for the December quarter against an 11.5% comparison from late 2024. That's a much harder setup.
If traffic and basket growth cool together, the stock stops being a growth grocer and starts being valued like a normal one.
med
one-engine business risk
Fresh-focused grocery sales make up 100% of revenue on this page. There is no second segment to offset a weak stretch in the stores.
That makes the thesis easy to follow and easy to break. If store productivity slips, every part of the valuation discussion gets tighter at once.
med
class action over the 2025 period
A class action alleges securities law violations between June 4, 2025 and October 29, 2025. We are not going to invent the outcome. The page data simply says the issue exists.
The legal risk looks smaller than the operating one unless new facts emerge, but it can still pressure sentiment while the case is unresolved.
The combined risk picture is straightforward: Sprouts is profitable and lightly indebted, but this is still an $8.8B grocery business living on mid-single-digit margins. Competitive pressure and slower comps hit the thesis faster than the balance sheet does.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
same-store sales after the 5.9% print
If comps drift toward the flat–2% guidance zone and stay there, the market will ask whether 2025 was the peak pace.
trend
gross margin and operating margin
A 9.2% operating margin is unusually good for grocery. That's the number protecting the valuation.
calendar
next quarter against the tougher comparison
Late 2024 posted an 11.5% comp comparison. The next report tells you whether Sprouts is slowing gracefully or hitting a wall.
risk
any new facts in the class action
For now this looks like a headline risk, not the core thesis. That can change if the case surfaces operating disclosures investors did not expect.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts do not see a strong short-term edge either way.
risk profile
average
stability score 3 — this sits in the middle, not especially defensive and not a chaos stock.
chart momentum
average
technical score 3 — the chart is not giving you a clean signal. It is waiting for the fundamentals to speak first.
earnings predictability
80 / 100
management usually delivers numbers close to expectations. that's valuable when the stock is being judged on execution, not hype.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 324 buyers vs. 430 sellers in 3q2025. total institutional holdings: 97.5M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$67
$148
$81
current price
$108
target midpoint · +34% from current · 3-5yr high: $185 (+130% · 23% ann'l return)
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