Sprouts Farmers Beats on Q2 Earnings With 10.2% Jump in Comp Sales

Sprouts Farmers Market, Inc. SFM reported better-than-expected second-quarter 2025 results, wherein the top and bottom lines increased year over year. Decent comparable sales, positive traffic trends, accelerating unit growth and robust e-commerce favorably impacted the quarterly performance. Following the results, management provided an upbeat outlook for 2025.

SFM’s Quarterly Performance: Key Metrics and Insights

The well-known grocery retailer reported quarterly earnings of $1.35 per share, surpassing the Zacks Consensus Estimate of $1.23. The bottom line rose from 94 cents in the same period last year. 

Net sales of this Phoenix, AZ-based company reached $2,220.6 million, beating the Zacks Consensus Estimate of $2,167 million. The figure increased 17% year over year. The growth was driven by sales from new stores and a jump in comparable store sales.

Comparable store sales rose 10.2% during the quarter under review, better than our estimate of a 7.9% jump. We note that e-commerce sales grew 27% and represented 15% of total sales in the quarter.

A Sneak Peek Into SFM’s Margins

Gross profit rose 20.1% year over year to $862.6 million in the quarter, while the gross margin expanded 91 basis points to 38.8% from the prior-year quarter, surpassing our expected 50 basis points expansion.

Sprouts Farmers reported operating income of $179.4 million, up from $127.3 million reported in the year-ago period. The operating margin expanded 140 basis points to 8.1%. We had envisioned an operating margin expansion of 80 basis points for the quarter under discussion.

SG&A expenses increased 16% year over year to $645.1 million. However, as a percentage of net sales, the metric leveraged 30 basis points to 29.1% better than our estimate of a 20-basis-point improvement.

Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise

Sprouts Farmers Market, Inc. price-consensus-eps-surprise-chart | Sprouts Farmers Market, Inc. Quote

Sprouts Farmers’ Store Update

During the quarter, Sprouts Farmers opened 12 new stores, taking the total count to 455 stores in 24 states as of June 29, 2025. It plans to open at least 35 new stores in 2025.

SFM’s Financial Health Snapshot

Sprouts Farmers ended the quarter with cash and cash equivalents of $261.4 million, long-term debt and finance lease liabilities of roughly $6.5 million and stockholders’ equity of $1,356.5 million. During the quarter, the company repurchased 0.5 million shares for a total investment of $73 million. 

Sprouts Farmers generated cash from operations of $410.3 million and spent $138 million in capital expenditures, net of landlord reimbursement, year to date through June 29, 2025. Management continues to anticipate capital expenditures (net of landlord reimbursements) in the range of $230-$250 million for 2025.

What to Expect From Sprouts Farmers in Fiscal 2025?

For the third quarter of 2025, Sprouts Farmers expects comparable store sales growth between 6% and 8%. It envisions adjusted earnings in the band of $1.12-$1.16 per share compared with 91 cents reported in the year-ago period.

Sprouts Farmers now anticipates 2025 net sales growth between 14.5% and 16% and comparable store sales growth in the range of 7.5%-9%. The company had earlier projected net sales growth of 12% to 14% and comparable store sales growth of 5.5% to 7.5%

Management has guided adjusted earnings before interest and taxes between $675 million and $690 million for 2025, up from the prior expectation of $640 million to $660 million.

The company now foresees full-year earnings between $5.20 and $5.32 per share, indicating growth from $3.75 reported in 2024. SFM had earlier guided earnings in the band of $4.94-$5.10 per share.

Shares of this Zacks Rank #2 (Buy) company have risen 24.4% year to date compared with the industry’s growth of 21.6%.

Other Stocks Looking Red Hot

Post Holdings, Inc. POST, a consumer-packaged goods holding company, currently sports a Zacks Rank #1 (Strong Buy). POST has a trailing four-quarter earnings surprise of 22.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Post Holdings’ current financial year sales and EPS calls for growth of 2.7% and 7.3%, respectively, from the year-ago reported numbers.

BJ's Wholesale Club Holdings, Inc. BJ, a leading operator of membership warehouse clubs, currently carries a Zacks Rank #2. BJ has a trailing four-quarter earnings surprise of 17.7%, on average. 

The Zacks Consensus Estimate for BJ's Wholesale Club’s current financial-year sales and EPS suggests growth of 5.5% and 6.2%, respectively, from the year-ago reported numbers.

The Chefs' Warehouse, Inc. CHEF, a premier distributor of specialty food products in the United States, currently carries a Zacks Rank #2. CHEF has a trailing four-quarter earnings surprise of 11.3%, on average. 

The Zacks Consensus Estimate for CHEF’s current financial-year sales and earnings suggests growth of 6% and 12.2%, respectively, from the year-ago reported numbers.

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