What Slowing Comparable Sales Mean for Sprouts Farmers' 2026 Outlook

While Sprouts Farmers Market, Inc. SFM delivered decent third-quarter fiscal 2025 results, the only key concern was the moderation in comparable-store sales growth. The metric rose 5.9% in the quarter, coming in below our projected 7.6% increase. Moreover, the growth rate decelerated from 10.2% and 11.7% increases registered in the second and first quarters, respectively. This moderation was attributed to tough year-over-year comparisons and a softening consumer backdrop. This slowdown carries important implications for the early part of 2026.

Sprouts Farmers will lap double-digit comparable-store sales from the prior year through the first half of 2026. The company’s fourth-quarter 2025 guidance of flat to 2% comparable store sales growth already signals this normalization. While traffic remains positive, baskets have thinned slightly as consumers manage budgets. 

Management’s tone suggested that the first half of 2026 may reflect softer momentum before newly launched initiatives, such as the loyalty program and innovation pipeline, begin to gain traction in the back half. The operational strategy is already pivoting to counteract the pressure on the top line. SFM anticipates opening more stores in 2026 than in 2025 and remains confident in achieving the targeted 10%-unit growth by 2027.

The performance of new store vintages is described as strong both in terms of revenues and profitability. The combination of accelerating new store contribution and disciplined cost management aimed at delivering stable EBIT margins will be critical to the 2026 outlook as comp pressure builds.

What the Latest Metrics Say About Sprouts Farmers

Sprouts Farmers, which competes with Walmart Inc. WMT and Target Corporation TGT, has seen its shares decline 40.7% over the past year against the industry’s growth of 1.8%. While shares of Walmart have rallied 24.4%, Target has declined 38.4% in the aforementioned period.
 

From a valuation standpoint, SFM's forward 12-month price-to-sales ratio stands at 0.78, higher than the industry’s ratio of 0.24. SFM carries a Value Score of B. Sprouts Farmers is trading at a discount to Walmart (with a forward 12-month P/S ratio of 1.11) but at a premium to Target (0.39). 
 

The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings per share implies year-over-year growth of 15.4% and 41.6%, respectively. 
 

Sprouts Farmers currently has a Zacks Rank #4 (Sell). 

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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