An updated edition of the June 27, 2025, article.The health and fitness industry has grown from a niche interest into a powerhouse market, driven by a cultural shift toward healthier living. People are no longer content with occasional workouts; they are actively seeking better nutrition, structured fitness plans, and holistic wellness services. Gyms, supplements, and specialized programs are booming, while technology has made staying on track simpler than ever. Wearables, mobile apps, and online coaching n ...

Financial Performance - For the quarter ended June 2025, Sprouts Farmers reported revenue of $2.22 billion, reflecting a 17.3% increase year-over-year [1] - Earnings per share (EPS) for the quarter was $1.35, compared to $0.94 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.17 billion by 2.47% [1] - The EPS also surpassed the consensus estimate of $1.23 by 9.76% [1] Key Metrics - Comparable store sales growth was 10.2%, exceeding the average estimate of 8.1% from four analysts [4] - The number of stores at the end of the period was 455, slightly above the average estimate of 453 from four analysts [4] - Sprouts Farmers opened 12 new stores, compared to the average estimate of 10 based on three analysts [4] - The number of stores at the beginning of the period was 443, matching the average estimate from two analysts [4] Stock Performance - Shares of Sprouts Farmers have returned -3.2% over the past month, while the Zacks S&P 500 composite increased by 3.4% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - Total sales for the second quarter reached $2.2 billion, an increase of $327 million or 17% compared to the same period last year [7][10] - Comparable store sales increased by 10.2%, with e-commerce sales growing by 27%, representing approximately 15% of total sales for the quarter [8][10] - Diluted earnings per share were $1.35, reflecting a 44% increase compared to the same period last year [10] Business Line Data and Key Metrics Changes - The Sprouts brand contributed 24% to total sales for the quarter, with a strong performance across various categories [8] - Gross margin for the second quarter was 38.8%, an increase of 91 basis points compared to the same period last year, driven by inventory management and sales performance [8][10] - SG&A expenses totaled $645 million, an increase of $89 million, with leverage mainly in labor and occupancy due to strong comparable performance [9] Market Data and Key Metrics Changes - The company opened 12 new stores in the second quarter, ending with 455 stores across 24 states [10] - The company plans to open at least 35 new stores in 2025, with a robust pipeline of over 130 approved locations [12][23] Company Strategy and Development Direction - The company remains focused on fresh, local, and innovative natural and organic products, aiming to meet the evolving needs of health-conscious consumers [5][6] - Strategic initiatives include enhancing customer engagement through targeted service strategies and expanding the supply chain for self-distribution [19][20] - The company is committed to building a resilient, purpose-driven organization that delivers long-term value to shareholders [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving significant earnings growth while capitalizing on emerging opportunities, expecting total sales growth of 14.5% to 16% for 2025 [12][13] - The company anticipates a normalization of gross margin rates in the second half of the year, with continued EBIT margin expansion of approximately 40 to 50 basis points year over year [15] - Management noted that customer resilience remains strong despite macroeconomic uncertainties, with a focus on quality and healthy food options [70][71] Other Important Information - The company has generated $410 million in operating cash flow year-to-date, allowing for self-funding of $138 million in capital expenditures [10][11] - The loyalty program is expected to impact comps significantly in 2026, with initial rollout results showing strong customer engagement [97][99] Q&A Session Summary Question: Can you provide more detail on the loyalty program? - Management noted that the loyalty program is currently in 70-75 stores, with encouraging sign-up rates and a planned nationwide rollout by October [30][31] Question: What are the trends in digital sales? - Digital sales continue to grow strongly, with shop.sprouts.com experiencing the fastest increase in penetration [36][37] Question: What is the outlook for gross margin? - Management indicated that while self-distribution will provide long-term benefits, the transition may impact margins in the short term [50][51] Question: How is the company addressing inflation and consumer dynamics? - The company is tracking CPI closely and has observed resilience in its customer base despite economic uncertainties [69][70] Question: What is the status of new store performance? - New stores are performing well, with a commitment to open 35 stores for the year and positive results from the new store format [61][62]

Financial Data and Key Metrics Changes - Total sales for Q2 2025 reached $2.2 billion, an increase of $327 million or 17% compared to the same period last year [8][11] - Comparable store sales increased by 10.2%, with diluted earnings per share rising to $1.35, reflecting a 44% increase year-over-year [7][11] - Gross margin improved to 38.8%, up 91 basis points from the previous year, driven by inventory management and sales performance [9][11] - Net income was $134 million, with operating cash flow generated year-to-date amounting to $410 million [11][12] Business Line Data and Key Metrics Changes - E-commerce sales grew by 27%, accounting for approximately 15% of total sales for the quarter [9] - Sprouts brand contributed 24% to total sales, with a focus on innovative and health-driven products [9][19] Market Data and Key Metrics Changes - The company opened 12 new stores in Q2, ending the quarter with 455 stores across 24 states [11] - The company plans to open at least 35 new stores in 2025, with a robust pipeline of over 130 approved locations [13][24] Company Strategy and Development Direction - The company is focused on expanding into new markets and enhancing its supply chain to support growth [13][20] - Innovation remains a cornerstone of the strategy, with plans to release over 350 new products this year [18] - The Sprouts Rewards loyalty program is being rolled out, expected to enhance customer engagement and drive sales [22][94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving significant earnings growth in 2025, with total sales growth expected to be between 14.5% and 16% [13][14] - The company anticipates a normalization of gross margin rates in the second half of the year, with continued EBIT margin expansion [15][49] Other Important Information - The company closed a $600 million revolving credit facility to enhance financial flexibility [12] - Management highlighted the importance of quality, healthy food options, which is driving customer engagement and sales growth [19][27] Q&A Session Summary Question: Details on the loyalty program rollout - Management noted that the loyalty program has been rolled out to approximately 75 stores, with encouraging sign-up rates and customer engagement [30][31] Question: Trends in digital sales and engagement - Digital sales are growing consistently, with shop.sprouts.com experiencing the fastest increase in penetration [35][38] Question: Comp sales momentum and guidance - Management indicated that comp sales have normalized to a 15% two-year stack run rate, with confidence in guidance for Q3 [42][48] Question: Impact of self-distribution on gross margin - Self-distribution is expected to provide long-term benefits to margins, but the transition may not yield immediate results [50][51] Question: New store performance and opening cadence - New stores are performing well, with a commitment to open 35 stores for the year, and a strong performance noted in previously less-known markets [62][63] Question: Inflation and consumer dynamics - Inflation has been consistent, with the customer base showing resilience despite economic uncertainties [70][71] Question: New product flow and competition - The company is focused on innovative product launches and maintaining a competitive edge in the market [76][80] Question: Maintaining produce freshness in new regions - The distribution strategy includes local sourcing teams to ensure product freshness, especially in new markets [106][109]

Q2 2025 Financial Highlights - Net sales increased by 17%[7] - Comparable store sales increased by 10.2%[7] - Diluted earnings per share (EPS) reached $1.35, representing a 44% growth[7] - Cash generation amounted to $111 million[7] - Share repurchases totaled $73 million[7] YTD 2025 Performance - Net sales increased by 18%[8] - Cash generation year-to-date reached $410 million[8] - Share repurchases year-to-date totaled $292 million[8] Full-Year 2025 Outlook - Total sales growth is projected to be between 14.5% and 16.0%[22] - Comparable sales growth is expected to be between 7.5% and 9.0%[22] - The company plans to open at least 35 new stores[22] - Earnings before interest & taxes (EBIT) is projected to be between $675 million and $690 million[22] - Diluted earnings per share (EPS) is expected to be between $5.20 and $5.32[22]

PART I [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements%2E) The company's financial statements for the period ended June 29, 2025, reflect strong growth in assets, net income, and cash flow, with notable share repurchase activity [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 29, 2025, the company's balance sheet shows an increase in total assets to **$3.78 billion** and total liabilities to **$2.43 billion**, resulting in higher stockholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | **Total current assets** | $709,328 | $675,520 | | **Total assets** | **$3,783,228** | **$3,640,699** | | **Total current liabilities** | $720,987 | $679,968 | | **Total liabilities** | **$2,426,728** | **$2,318,806** | | **Total stockholders' equity** | **$1,356,500** | **$1,321,893** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) The company reported robust year-over-year growth in net sales and net income for both the second quarter and first half of 2025, significantly improving diluted EPS Q2 Performance Comparison (in thousands, except per share data) | Metric | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $2,220,602 | $1,893,519 | +17.2% | | Gross Profit | $862,600 | $718,365 | +20.1% | | Income from Operations | $179,356 | $127,317 | +40.9% | | Net Income | $133,703 | $95,289 | +40.3% | | Diluted EPS | $1.35 | $0.94 | +43.6% | Year-to-Date Performance Comparison (in thousands, except per share data) | Metric | Twenty-six Weeks Ended June 29, 2025 | Twenty-six Weeks Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $4,457,038 | $3,777,327 | +18.0% | | Gross Profit | $1,748,963 | $1,440,678 | +21.4% | | Income from Operations | $405,688 | $275,583 | +47.2% | | Net Income | $313,729 | $209,389 | +49.8% | | Diluted EPS | $3.16 | $2.06 | +53.4% | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity increased for the twenty-six weeks ended June 29, 2025, primarily due to net income, partially offset by significant share repurchases - Key changes in stockholders' equity for the 26 weeks ended June 29, 2025 include: Net income of **$313.7 million**, share repurchases of **$294.7 million**, and share-based compensation of **$14.4 million**[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased for the twenty-six weeks ended June 29, 2025, while cash was primarily used for investing in property and equipment and financing share repurchases Cash Flow Summary (in thousands) | Activity | Twenty-six weeks ended June 29, 2025 | Twenty-six weeks ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$410,337** | **$311,295** | | Net cash used in investing activities | ($120,319) | ($108,925) | | Net cash used in financing activities | ($293,734) | ($226,765) | | **Decrease in cash** | **($3,716)** | **($24,395)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's operations, significant legal proceedings, new lease agreements, and ongoing share repurchase program, providing context for the financial statements - As of June 29, 2025, the Company operated **455 stores** in **24 states**[23](index=23&type=chunk) - The company is involved in litigation with its former distributor, Harvest Sherwood Food Distributors, Inc., which filed for Chapter 11 bankruptcy, with potential loss currently unpredictable[64](index=64&type=chunk) - On April 24, 2025, the company executed a 10-year real estate lease for a new corporate headquarters and store, with total non-cancellable lease payments of **$110.0 million**, expected to commence in Q3 2026[65](index=65&type=chunk) - A **$600 million** share repurchase program was authorized on May 22, 2024, with **$158.3 million** remaining available as of June 29, 2025[67](index=67&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%2E) Management's discussion highlights strong financial performance driven by strategic growth initiatives, improved margins, and robust liquidity, supported by a new credit facility and ongoing share repurchases [Business Overview and Growth Strategy](index=20&type=section&id=Business%20Overview%20and%20Growth%20Strategy) The company's growth strategy focuses on expanding its specialty retail presence through targeted customer engagement, market expansion, supply chain optimization, talent investment, and technology adoption - The company's long-term growth strategy focuses on: winning with target customers, market expansion with smaller stores aiming for **10% annual unit growth**, creating an advantaged supply chain with **80% of stores within 250 miles** of a distribution center, increasing customer engagement via data analytics, inspiring and engaging talent, and investing in technology for scalable growth[102](index=102&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) The company reported robust growth in net sales and comparable store sales for both the second quarter and first half of 2025, accompanied by significant gross margin expansion and increased net income Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $2.2B | $1.9B | +17% | | Comparable Store Sales Growth | 10.2% | 6.7% | +3.5 p.p. | | Gross Margin | 38.8% | 37.9% | +0.9 p.p. | | Net Income | $133.7M | $95.3M | +40% | | Diluted EPS | $1.35 | $0.94 | +44% | YTD 2025 vs YTD 2024 Performance | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $4.5B | $3.8B | +18% | | Comparable Store Sales Growth | 10.9% | 5.4% | +5.5 p.p. | | Gross Margin | 39.2% | 38.1% | +1.1 p.p. | | Net Income | $313.7M | $209.4M | +50% | | Diluted EPS | $3.16 | $2.06 | +53% | [Return on Invested Capital (ROIC)](index=29&type=section&id=Return%20on%20Invested%20Capital) The company's Return on Invested Capital (ROIC) significantly improved for the four quarters ending June 29, 2025, reflecting enhanced capital allocation and profitability ROIC Calculation (Rolling Four Quarters Ended) | Metric | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | NOPAT, including operating leases | $570.8M | $411.6M | | Average invested capital, including operating leases | $3,207.2M | $3,014.3M | | **ROIC, including operating leases** | **17.8%** | **13.7%** | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position, primarily funded by operating cash flow, with significant capital expenditures and share repurchases, further bolstered by a new revolving credit facility - Cash flow from operating activities increased by **$99.0 million** to **$410.3 million** for the first half of 2025, mainly due to higher net income[138](index=138&type=chunk) - Financing activities used **$293.7 million**, primarily consisting of **$292.2 million** for stock repurchases[143](index=143&type=chunk) - On July 25, 2025, the company entered into a new **$600.0 million** revolving credit facility maturing in 2030, which refinances and replaces the previous facility[56](index=56&type=chunk) - Expected capital expenditures for 2025 are projected to be in the range of **$230 - $250 million**[142](index=142&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk%2E) The company faces market risk from interest rate fluctuations on its variable-rate credit facility, though no outstanding borrowings existed as of June 29, 2025 - The company's credit agreement bears interest at a variable rate based on SOFR, exposing it to interest rate fluctuations[158](index=158&type=chunk) - As of June 29, 2025, the company had no outstanding borrowings under its Credit Agreement[158](index=158&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures%2E) Management concluded that the company's disclosure controls and procedures were effective as of June 29, 2025, with no material changes to internal controls over financial reporting during the quarter - Based on an evaluation as of June 29, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[160](index=160&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that materially affected, or were reasonably likely to materially affect, these controls[161](index=161&type=chunk) PART II [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings%2E) The company is involved in various legal proceedings, including a notable dispute with a former distributor, with no expected material adverse effect on its financial condition - The company is party to various legal proceedings from the ordinary course of business[163](index=163&type=chunk) - Specific details on a significant legal proceeding with Harvest Sherwood are provided in Note 6 of the financial statements[164](index=164&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors%2E) There have been no material changes to the Risk Factors described in the company's Annual Report on Form 10-K for the fiscal year ended December 29, 2024 - There have been no material changes to the Risk Factors described in the company's Annual Report on Form 10-K for the fiscal year ended December 29, 2024[166](index=166&type=chunk) [Issuer Purchases of Equity Securities](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%2E) During Q2 2025, the company repurchased **466,420 shares** for **$74.2 million** under its **$600 million** authorization, with **$158.3 million** remaining for future repurchases Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | March 31 - April 27, 2025 | 331,262 | $153.88 | | April 28 - May 25, 2025 | 78,720 | $167.29 | | May 26 - June 29, 2025 | 56,438 | $165.09 | | **Total** | **466,420** | N/A | - As of June 29, 2025, **$158.3 million** remained available for repurchase under the current plan, which expires on May 22, 2027[168](index=168&type=chunk) [Other Information](index=35&type=section&id=Item%205.%20Other%20Information%2E) No directors or executive officers adopted or terminated a Rule 10b5-1 Trading Plan during the second quarter of 2025 - No directors or executive officers adopted or terminated a Rule 10b5-1 Trading Plan during the second quarter of 2025[169](index=169&type=chunk) [Exhibits](index=35&type=section&id=Item%206.%20Exhibits%2E) This section lists exhibits filed with the Form 10-Q, including corporate documents, CEO and CFO certifications, and financial data in iXBRL format - Key exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and financial data in iXBRL format[170](index=170&type=chunk)

[Sprouts Farmers Market Q2 2025 Earnings Release](index=1&type=section&id=Sprouts%20Farmers%20Market%2C%20Inc.%20Reports%20Second%20Quarter%202025%20Results) [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) Sprouts Farmers Market reported strong Q2 2025 results, with net sales increasing 17% to $2.2 billion, comparable store sales up 10.2%, and diluted EPS reaching $1.35 Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Change vs Q2 2024 | | :--- | :--- | :--- | | Net Sales | $2.2 billion | +17% | | Comparable Store Sales Growth | 10.2% | N/A | | Diluted Earnings Per Share | $1.35 | +43.6% (from $0.94) | - Opened **12 new stores** during the quarter, bringing the total to **455 stores** across **24 states**[5](index=5&type=chunk) - Maintained a strong balance sheet with **$261 million in cash and cash equivalents** and **zero balance** on its **$700 million revolving credit facility**[5](index=5&type=chunk) - Returned capital to shareholders by repurchasing **0.5 million shares** of common stock for **$73 million**[5](index=5&type=chunk) [Financial Outlook for 2025](index=1&type=section&id=Third%20Quarter%20and%20Full-Year%202025%20Outlook) The company projects positive financial performance for 2025, with Q3 comparable store sales growth of 6.0-8.0% and full-year net sales growth of 14.5-16.0%, alongside plans to open at least 35 new stores Q3 2025 Outlook | Metric | Guidance | | :--- | :--- | | Comparable Store Sales Growth | 6.0% to 8.0% | | Diluted Earnings Per Share | $1.12 to $1.16 | Full-Year 2025 Outlook | Metric | Guidance | | :--- | :--- | | Net Sales Growth | 14.5% to 16.0% | | Comparable Store Sales Growth | 7.5% to 9.0% | | EBIT | $675 million to $690 million | | Diluted Earnings Per Share | $5.20 to $5.32 | | New Store Openings | At least 35 | | Capital Expenditures (Net) | $230 million to $250 million | [Corporate Profile and Strategy](index=3&type=section&id=Corporate%20Profile) CEO Jack Sinclair attributes strong performance to strategic investments and customer focus, positioning Sprouts as a leading specialty retailer of fresh, natural, and organic foods with over 450 stores - CEO Jack Sinclair highlighted investments in operations, self-distribution, customer personalization, and team member development as drivers for future growth[3](index=3&type=chunk) - Sprouts operates over **450 stores** in **24 states**, establishing itself as a leading and rapidly growing specialty retailer of fresh, natural, and organic food in the U.S[10](index=10&type=chunk) [Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Income](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For Q2 2025, net sales increased 17.3% to **$2.22 billion**, gross profit rose to **$862.6 million**, and net income grew 40.3% to **$133.7 million**, yielding a diluted EPS of **$1.35** Q2 2025 vs Q2 2024 Income Statement Highlights (in thousands) | Metric | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | | :--- | :--- | :--- | | Net Sales | $2,220,602 | $1,893,519 | | Gross Profit | $862,600 | $718,365 | | Income from Operations | $179,356 | $127,317 | | Net Income | $133,703 | $95,289 | | Diluted EPS | $1.35 | $0.94 | [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of June 29, 2025, total assets reached **$3.78 billion**, total liabilities were **$2.43 billion**, and total stockholders' equity stood at **$1.36 billion** Balance Sheet Highlights (in thousands) | Metric | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $261,404 | $265,159 | | Total current assets | $709,328 | $675,520 | | Total assets | $3,783,228 | $3,640,699 | | Total current liabilities | $720,987 | $679,968 | | Total liabilities | $2,426,728 | $2,318,806 | | Total stockholders' equity | $1,356,500 | $1,321,893 | [Consolidated Statements of Cash Flows](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the first twenty-six weeks of 2025, operating cash flow was **$410.3 million**, with **$120.3 million** invested in property and equipment and **$292.2 million** used for common stock repurchases Cash Flow Summary for Twenty-Six Weeks Ended (in thousands) | Metric | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | $410,337 | $311,295 | | Cash flows used in investing activities | ($120,319) | ($108,925) | | Cash flows used in financing activities | ($293,734) | ($226,765) | | Repurchase of common stock | ($292,223) | ($104,488) | [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of Net Income to EBIT and EBITDA](index=7&type=section&id=NON-GAAP%20MEASURE%20RECONCILIATION) The company utilizes non-GAAP measures EBIT and EBITDA to assess performance, with Q2 2025 EBIT increasing to **$179.4 million** and EBITDA growing to **$217.8 million** - EBIT is defined as net income before interest expense and income tax, while EBITDA is net income before interest, taxes, depreciation, amortization, and accretion[18](index=18&type=chunk) Reconciliation to EBIT and EBITDA for Q2 (in thousands) | Metric | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | | :--- | :--- | :--- | | Net Income | $133,703 | $95,289 | | EBIT | $179,356 | $127,317 | | EBITDA | $217,800 | $160,551 | [Additional Information](index=3&type=section&id=Additional%20Information) [Conference Call Information](index=3&type=section&id=Second%20Quarter%202025%20Conference%20Call) Sprouts scheduled a conference call for July 30, 2025, at 5:00 p.m. ET to discuss Q2 2025 results, with webcast and replay available on its investor relations website - A conference call to discuss Q2 2025 financial results was scheduled for July 30, 2025, with a webcast available on the investor relations webpage[6](index=6&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements, including financial outlooks, which are subject to significant risks and uncertainties that may cause actual results to differ materially - The company's projected financial expectations are not guaranteed and are subject to significant economic, competitive, and other uncertainties[8](index=8&type=chunk) - Forward-looking statements, including outlook and strategy, involve risks that may cause actual results to differ, as detailed in SEC filings like Form 10-K and 10-Q[9](index=9&type=chunk)

Core Insights - The GARP (Growth at a Reasonable Price) strategy combines value and growth investing, focusing on undervalued stocks with solid growth prospects [1][2][7] GARP Strategy Overview - GARP investing aims to provide an ideal investment by utilizing features from both value and growth investing, targeting stocks priced below market value with strong cash flow and earnings potential [3][4] - Ideal growth rates for GARP investors are between 10% and 20%, focusing on stable growth rather than super-normal rates [3] Screening Parameters - Stocks selected under the GARP strategy must have a Zacks Rank of 1 (Strong Buy) or 2 (Buy), with last 5-year EPS and projected 3-5 year EPS growth rates between 10% and 25% [6] - A return on equity (ROE) greater than the industry average and P/E and P/B ratios less than the industry average are also key criteria [6] Promising GARP Stocks - GE Aerospace is experiencing strong demand for commercial engines and expects organic revenue growth in the low-double-digit range for 2025, with a year-to-date stock surge of 62.1% [9][10] - Autodesk is benefiting from new business growth and strong demand for its cloud-based products, with a year-to-date return of 3.7% [12][13] - Adobe's tools are gaining traction, with over 700 million monthly active users, although the stock has declined 16.6% year-to-date [14][16] - Sprouts Farmers Market is well-positioned in the natural and organic food market, planning to open at least 35 new stores in 2025, with a year-to-date return of 23.5% [17][18][19]

Core Insights - Sprouts Farmers Market, Inc. (SFM) is set to announce its second-quarter 2025 earnings results on July 30, which is critical for investors to decide on their positions regarding the stock [1] Financial Performance Expectations - The Zacks Consensus Estimate for second-quarter revenues is $2,167 million, reflecting a 14.4% increase year-over-year [3] - The earnings consensus estimate has risen to $1.23 per share, indicating a 30.9% year-over-year increase [3] - SFM has a trailing four-quarter earnings surprise average of 16.5%, with a 17.5% beat in the last reported quarter [3] Earnings Prediction Model - The Zacks model indicates a likely earnings beat for SFM, supported by a positive Earnings ESP and a Zacks Rank of 2 (Buy) [4][5] Growth Drivers - SFM is capitalizing on the growing demand for organic and natural products, enhancing its market position [2] - The company focuses on product innovation, technology, and competitive pricing, which are expected to positively impact sales [6] - Comparable store sales growth is anticipated at 7.9% for the quarter [8] E-commerce and Digital Strategy - SFM has invested significantly in its digital infrastructure, leading to a 28% increase in e-commerce sales in Q1 2025 [9] Cost Management and Margins - Management expects gross margin and SG&A rates to normalize in Q2, with SG&A expenses projected to rise 13.7% year-over-year [10] Stock Performance and Valuation - SFM's stock has surged 90.3% over the past year, outperforming the industry growth of 65.1% [11] - The stock trades at a premium P/S ratio of 1.70 compared to the industry average of 0.27, indicating a higher valuation relative to anticipated sales growth [12][13] Investment Outlook - SFM's strong sales growth, margin expansion, and strategic initiatives position it as a compelling investment opportunity [15] - Existing investors may consider holding their positions, while new investors should evaluate the stock's premium valuation before entering [16]

Core Insights - Analysts project that Sprouts Farmers (SFM) will report quarterly earnings of $1.23 per share, reflecting a year-over-year increase of 30.9% [1] - Revenue is expected to reach $2.17 billion, marking a 14.4% increase from the same quarter last year [1] Earnings Projections - The consensus EPS estimate has been revised upward by 0.3% over the past 30 days, indicating a collective reassessment by analysts [2] - Revisions to earnings projections are crucial for predicting investor behavior and are linked to short-term stock price performance [3] Key Metrics - Comparable store sales growth is forecasted to be 8.1%, up from 6.7% a year ago [5] - Analysts estimate that the number of stores at the end of the period will reach 453, compared to 419 the previous year [5] - The number of new stores opened is projected to be 10, an increase from 5 in the same quarter last year [5] - The average prediction for stores at the beginning of the period is 443, compared to 414 a year ago [6] Market Performance - Sprouts Farmers shares have increased by 2.5% in the past month, while the Zacks S&P 500 composite has risen by 4.6% [6] - With a Zacks Rank 1 (Strong Buy), SFM is expected to outperform the overall market in the near term [6]