Mixed Quarter for Sprouts Farmers Market as Sales Miss, but EPS Tops Estimates
Sprouts Farmers Market (NASDAQ:SFM) reported its first-quarter results for fiscal 2026 after the market close on Wednesday, delivering a mixed picture that has investors weighing a slight revenue miss against a small earnings beat. The market’s initial reaction has been cautiously positive, with shares moving higher in after-hours trading.
Recent Performance
For the 13-week period ending March 29, 2026, Sprouts reported net sales of $2.33 billion. This represents a 4% increase year-over-year, but fell just short of the analyst consensus estimate of $2.345 billion. The company’s comparable store sales, a key retail metric, came in at negative 1.7%, which landed within the range of their own full-year outlook but indicates continued pressure at existing locations.
On the bottom line, the company performed better. Adjusted diluted earnings per share (EPS) came in at $1.71, beating the analyst estimate of $1.69. This compares to $1.81 in the same quarter last year, a decline driven by higher operating costs and investments.
Other notable highlights from the quarter include:
- Store Growth: Sprouts opened 6 new stores, bringing the total count to 483 locations across 25 states.
- Cash Flow: The company generated $235 million in cash from operations.
- Shareholder Returns: Sprouts repurchased 1.9 million shares of common stock for a total of $140 million.
- Balance Sheet: The company ended the quarter with $252 million in cash and cash equivalents and zero balance drawn on its $600 million revolving credit facility.
Valuation Metrics and Outlook
Looking ahead, management provided guidance for the second quarter of fiscal 2026, which offers a clearer picture of what to expect. The company forecasts:
- Comparable store sales: -2% to 0%
- Diluted EPS: $1.32 to $1.36
The midpoint of this EPS guidance ($1.34) is roughly in line with the analyst estimate of $1.36 for Q2. For the full fiscal year 2026, Sprouts is guiding for net sales growth of 4.5% to 6.5%, comparable store sales of -1% to 1%, and diluted EPS of $5.32 to $5.48. This full-year EPS range brackets the analyst estimate of $5.48 at its top end.
A key item to note for the full year is that fiscal 2026 includes a 53rd week in the fourth quarter. Management estimates this extra week will contribute approximately $200 million in sales and $0.21 in diluted EPS. On a 52-week basis, the underlying business performance appears more moderate.
Analyst Views
The initial market reaction, with shares moving up over 4% in after-hours trading, suggests that investors are focusing more on the earnings beat and the reassurance that the company’s long-term strategy remains on track rather than the slight revenue miss. CEO Jack Sinclair noted that the first quarter "played out largely as we expected," and the company anticipates "sequential improvement" throughout the year. Analysts on the post-earnings call will likely probe the trajectory of comparable store sales and the path to returning to positive growth, especially given the cautious Q2 guidance.
Need more data to make your own assessment? To view detailed historical earnings reports and future analyst projections and estimates for Sprouts Farmers Market, visit the earnings page and forecast page.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. The author may hold positions in securities mentioned. Readers should conduct their own research or consult with a qualified financial professional before making any investment decisions.