Sprouts Farmers Eyes 10% Store Growth by 2027: What's Driving It?

Sprouts Farmers Market, Inc. SFM is moving ahead with its aggressive store expansion plan, targeting 10%-unit growth in 2027. This ambitious goal is underpinned by a robust real estate pipeline and consistently strong new store performance. 

During the current financial year of 2025, SFM now plans to open 37 new stores, up from its initial target of 35. During the third quarter, Sprouts Farmers opened nine new locations, bringing its total store count to 464 across 24 states. Management is highly encouraged by the strong reception from customers in new communities, noting that the new stores are performing well.

Looking beyond 2025, the company intends to increase its pace, planning to open more stores in 2026 than in the current year. The long-term unit expansion is supported by a significant new store pipeline that already includes 140 approved locations. The planned geographic expansion into new territories, specifically the Midwest and the Northeast, is already providing excellent opportunities for site approvals.

To support this store expansion, Sprouts Farmers is investing significantly, anticipating full-year capital expenditures, net of landlord reimbursements, of $230 million to $250 million. The focus on opening stores in high-demand markets, along with tailored community engagement activities, ensures each new store connects with local consumers.

What the Latest Metrics Say About Sprouts Farmers

Sprouts Farmers, which competes with Walmart Inc. WMT and Target Corporation TGT, has seen its shares drop 44.7% over the past year compared with the industry’s decline of 19.1%. While shares of Walmart have rallied 17.7%, Target shares have declined 32.9% during the same period.
 

From a valuation standpoint, SFM's forward 12-month price-to-sales ratio stands at 0.83, 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 1.14) but at a premium to Target (0.37).
 

The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings per share implies year-over-year growth of 14.2% and 40.5%, respectively. 
 

Sprouts Farmers currently has a Zacks Rank #5 (Strong 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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