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

Core Insights - Sprouts Farmers Market, Inc. (SFM) is pursuing an aggressive store expansion plan with a target of 10% unit growth by 2027, supported by a strong real estate pipeline and new store performance [1][8] Expansion Plans - In the financial year 2025, SFM plans to open 37 new stores, an increase from the initial target of 35, bringing the total to 464 stores across 24 states [2] - The company aims to accelerate its expansion in 2026, with a significant pipeline of 140 approved locations, focusing on new territories in the Midwest and Northeast [3] Capital Expenditures - To support the expansion, SFM anticipates capital expenditures of $230 million to $250 million, targeting high-demand markets and engaging with local communities [4][8] Financial Performance - SFM's shares have decreased by 44.7% over the past year, while the industry has seen a decline of 19.1% [5] - The forward 12-month price-to-sales ratio for SFM is 0.83, higher than the industry average of 0.24, indicating a valuation premium over Target but a discount compared to Walmart [6] Sales and Earnings Estimates - The Zacks Consensus Estimate indicates a year-over-year sales growth of 14.2% and earnings per share growth of 40.5% for the current financial year [9] - Current quarter sales are estimated at $2.16 billion, with a year-over-year growth estimate of 8.14% [10] - Earnings per share for the current year are projected at $5.27, reflecting a year-over-year growth of 40.53% [11]