Sprouts Farmers Market Q3 Sales Rise 5% as Comparable Sales Decline

Sprouts Farmers Market reported higher third-quarter sales as new-store expansion outweighed a decline in comparable-store sales, while lower margins contributed to modest declines in profit and earnings per share. The specialty grocer opened 15 stores during the quarter and maintained plans to open 42 net new locations in fiscal 2026.

Net sales for the 13 weeks ended Sept. 27 rose about 5% to $2.30 billion from $2.20 billion a year earlier. Comparable-store sales declined 0.9%, highlighting the role of store expansion in the top-line increase. Sprouts also closed one underperforming store when its lease expired.

Gross profit increased to $880.8 million from $851.1 million, but gross margin narrowed to 38.2% from 38.7%. Company-defined EBIT fell to $152.8 million from $157.4 million, while EBIT margin decreased to 6.6% from 7.2%.

Net income declined to $113.4 million from $120.1 million. Diluted earnings per share slipped 1% to $1.21 from $1.22, with diluted weighted-average shares outstanding falling to 93.7 million from 98.7 million. No special items were reported in either period, so adjusted and reported third-quarter results were the same.

Sprouts generated $186 million in cash during the quarter and repurchased $89 million of shares, excluding excise tax. The company said its balance sheet and cash generation provide flexibility to fund business investment and continue repurchases.

Store expansion and operating initiatives

Management described the performance of new stores as strong and said its 2026 initiatives remain on track. In addition to opening 15 stores during the quarter, Sprouts launched more than 1,400 unique products, reported strong adoption of its loyalty program and said the transition to self-distribution of meat was successful.

For the first three quarters of 2026, net sales increased 5%, while comparable-store sales declined 1.2%. Sprouts opened 28 stores during that period, alongside the single lease-expiration closure. Year-to-date diluted EPS fell 2% to $4.30. Cash generation totaled $555 million, and share repurchases reached $299 million, excluding excise tax.

2026 outlook

On a 52-week basis, Sprouts expects fiscal 2026 net sales growth of approximately 4.3% and a comparable-store sales decline of about 1.7%. The company projects EBIT of roughly $605 million and diluted EPS of approximately $4.80. Capital expenditures, net of landlord reimbursements, are expected to total about $310 million.

For the fourth quarter on a 13-week basis, management expects comparable-store sales to decline between 2% and 4%, with diluted EPS of $0.47 to $0.51.

Fiscal 2026 will contain 53 weeks, with the additional week falling in the fourth quarter. Sprouts estimates that the extra week will contribute approximately $190 million in sales, $20 million in income before interest and taxes, and $0.16 in diluted EPS.

The outlook remains subject to risks including the company’s ability to open stores and manage growth, maintain margins, respond to changing consumer preferences and compete effectively. Sprouts also identified supply disruptions, economic conditions, inflation or deflation, tariffs and shifts in consumer spending as potential sources of uncertainty.