Sprouts Farmers Market Stock Earnings Reports

Sprouts reported Q1 2026 sales of $2.3 billion, up 4% year-over-year driven by new store performance but with a 1.7% comparable store sales decline. E‑commerce grew 10% and represented ~16% of sales; Sprouts brand sales accelerated to >26% of total. Gross margin was 39.4% (down 20 bps) primarily due to loyalty investments and unfavorable shrink, partially offset by benefits from near‑complete meat self‑distribution. SG&A delevered due to fixed costs and lower comps; EBIT was $215 million, net income $164 million and diluted EPS $1.71 (-6%). The company opened 6 stores (483 total) and remains on track for at least 40 new stores in 2026 with ~150 approvals and 105+ executed leases in the pipeline. Cash generation was strong ($235M operating cash flow), $98M capex (net), and $140M of share repurchases with $696M remaining authorization. 2026 guidance (52‑week basis) maintained: total sales +4.5% to +6.5%, comps -1% to +1%, EBIT $675M–$695M, capex $280M–$310M, and raised EPS to $5.32–$5.48 assuming ≥$300M buybacks. Q2 comp guide -2% to 0% and EPS $1.32–$1.36; Q2 expects ~75 bps EBIT pressure (fuel, loyalty anniversary, fixed cost deleverage). Management emphasized strategic priorities: differentiation via foraging/innovation, loyalty and personalization, completing self-distribution, new‑store growth, targeted price/promotional actions to improve affordability, and continued investments in talent and technology. They expect sequential improvement through 2026 as comparisons ease and initiatives ramp.