Sprouts Farmers Market(US:SFM) ZACKSยท2025-10-31 13:31Core Insights - Sprouts Farmers Market, Inc. (SFM) reported a 5.9% increase in comparable-store sales for Q3 fiscal 2025, which was below the expected 7.6% and a decline from previous quarters' growth rates of 10.2% and 11.7% [1][8] - The company anticipates a normalization in sales growth, with guidance for Q4 2025 indicating flat to 2% comparable-store sales growth [2] - Management indicated that the first half of 2026 may experience softer momentum before new initiatives, such as a loyalty program, begin to take effect in the latter half of the year [3][8] Sales and Financial Performance - The Zacks Consensus Estimate projects current fiscal year sales growth of 15.4% and earnings per share (EPS) growth of 41.6% [10] - For Q3 2025, the estimated sales are $2.22 billion, with a year-over-year growth estimate of 11.14% [11] - The company expects to open more stores in 2026 than in 2025, aiming for a 10% unit growth by 2027 [3][8] Competitive Landscape - Over the past year, SFM's shares have declined by 40.7%, contrasting with a 1.8% growth in the industry, while Walmart's shares increased by 24.4% and Target's shares decreased by 38.4% [5] - SFM's forward 12-month price-to-sales ratio is 0.78, which is higher than the industry average of 0.24, indicating a valuation premium compared to Target but a discount compared to Walmart [6] Operational Strategy - The performance of new store openings has been strong in terms of revenue and profitability, which is crucial for the outlook as comparable-store sales pressure increases [4] - The company is focusing on disciplined cost management to maintain stable EBIT margins amid sales growth moderation [4]