Sprouts Farmers' 10.2% Comparable Store Sales Lift Confidence in FY25

Sprouts Farmers Market, Inc. SFM reported an outstanding 10.2% increase in comparable store sales for the second quarter of 2025, reinforcing management’s optimism for the remainder of the year. The company has raised its full-year comparable sales growth outlook to a range of 7.5%-9%, up from the prior projection of 5.5% to 7.5%, reflecting strong operational momentum and consumer engagement.

The impressive comparable store sales increase was primarily driven by strong customer traffic. This growth was balanced across all product categories, sales channels and geographies. Despite anticipating a slight moderation following last year's traffic acceleration, the second-quarter performance remained robust. This strong performance demonstrates the effectiveness of Sprouts Farmers' focused merchandising strategy and its appeal to health-conscious consumers seeking fresh, natural and innovative products.

A key metric supporting the long-term confidence is the consistent two-year stack performance, which remains steady at approximately 15%. This consistent two-year stack performance is a primary reason for the increased comparable store sales guidance for 2025. 

The robust comparable growth lifted second-quarter total sales by 17% to $2,220.6 million, driven primarily by higher customer traffic. E-commerce also added meaningful support, rising 27% and accounting for 15% of total sales. With sustained traffic strength, higher digital engagement and improved store productivity, Sprouts Farmers' double-digit comparable store sales performance has strengthened management’s conviction in achieving its full-year outlook.

A Look at the Big Box Retailers: Walmart and Target

The retail titan, Walmart Inc. WMT, continued to demonstrate strength in its core domestic business. Walmart saw its U.S. comparable sales rise by a solid 4.6% (excluding fuel) during the second quarter of fiscal 2026. This growth, fueled by its dominance in grocery and health & wellness, highlights Walmart's ability to gain market share by successfully appealing to value-seeking customers.

The story is different for competitor Target Corporation TGT. Target faced headwinds, reporting a comparable sales decline of 1.9%, reflecting a comparable store sales decrease of 3.2%. This was partially offset by comparable digital sales growth of 4.3%, driven by same-day services. Well, Target did see improved traffic trends.

What Latest Metrics Say About Sprouts Farmers

Sprouts Farmers stock has declined 8.8% over the past year against the industry’s growth of 6.2%. 
 

From a valuation standpoint, SFM's forward 12-month price-to-sales ratio stands at 1.07, higher than the industry’s ratio of 0.24. SFM carries a Value Score of B.
 

The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings per share implies year-over-year growth of 15.7% and 41.9%, respectively. 
 

Sprouts Farmers Market currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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