Sprouts Farmers Market, Inc. Reports Third Quarter 2026 Results

PHOENIX--(BUSINESS WIRE)--Sprouts Farmers Market, Inc. (Nasdaq: SFM) today reported results for the 13-week third quarter ended September 27, 2026.

“While a challenging consumer environment and the cyclospora disruption affected the quarter, we recognize the need to improve our performance and are taking action to strengthen execution and drive traffic,” said Jack Sinclair, chief executive officer of Sprouts Farmers Market. “We are increasing investments to enhance affordability and deepen customer engagement, while building on the differentiated assortment and experience that define Sprouts. I want to thank our teams for their dedication, including opening a record 15 new stores during the quarter. The strong performance of our recent store vintages and continued momentum in unit growth reinforce our confidence in the significant opportunity ahead for Sprouts.”

Third Quarter Highlights:

• Net sales totaled $2.3 billion, a 5% increase from the same period in 2025
• Comparable store sales of (0.9)%
• Diluted earnings per share of $1.21, compared to diluted earnings per share of $1.22 in the same period in 2025
• Opened 15 new stores, resulting in 504 stores in 25 states as of September 27, 2026

Leverage and Liquidity in Third Quarter 2026

• Ended the quarter with $229 million in cash and cash equivalents and zero balance on our $600 million revolving credit facility
• Repurchased 1.1 million shares of common stock for a total investment of $89 million, excluding excise tax
• Generated cash from operations of $555 million and invested $275 million in capital expenditures, net of landlord reimbursement, year-to-date through September 27, 2026

Fourth Quarter and Full-Year 2026 Outlook

The following provides information on our fourth quarter 2026 outlook (on a 13-week basis):

• Comparable store sales: (2.0)% to (4.0)%
• Diluted earnings per share: $0.47 to $0.51

The Company notes that fiscal year 2026 will be a 53-week year, with the extra week falling in the fourth quarter.

We estimate the impact from the 53rd week to be approximately $190 million in sales, $20 million in income before interest and taxes, and $0.16 in diluted earnings per share.

The following provides information on our full year 2026 outlook (on a 52-week basis):

• Net sales growth: ~4.3%
• Comparable store sales: ~(1.7)%
• EBIT: ~$605 million
• Diluted earnings per share: ~$4.80
• Unit growth: 42 net new stores
• Capital expenditures (net of landlord reimbursements): ~$310 million

Third Quarter 2026 Conference Call

Sprouts will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, October 28, 2026, during which Sprouts executives will further discuss third quarter 2026 financial results.

A webcast of the conference call will be available through Sprouts’ investor relations webpage, accessible via the following link. Participants should register on the website approximately ten minutes prior to the start of the webcast.

A webcast replay will be available at approximately 8:00 p.m. Eastern Time on October 28, 2026. This can be accessed with the following link.

Important Information Regarding Outlook

There is no guarantee that Sprouts will achieve its projected financial expectations, which are based on management estimates, currently available information and assumptions that management believes to be reasonable. These expectations are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. See “Forward-Looking Statements” below.

Forward-Looking Statements

Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact (including, but not limited to, statements to the effect that Sprouts Farmers Market or its management "anticipates," "plans," "estimates," "expects," "will," "believes," or "projects," or the negative of these terms and other similar expressions) should be considered forward-looking statements, including, without limitation, statements regarding the company’s outlook, growth, opportunities and long-term strategy. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this release. These risks and uncertainties include, without limitation, the company’s ability to execute on its long-term strategy; the company’s ability to successfully compete in its competitive industry; the company’s ability to successfully open new stores; the company’s ability to manage its growth; the company’s ability to maintain or improve its operating margins; the company’s ability to identify and react to trends in consumer preferences in a timely manner; product supply disruptions; equipment supply disruptions; general economic conditions that impact consumer spending or result in competitive responses; accounting standard changes; potential inflationary and/or deflationary trends; tariffs; and other factors as set forth from time to time in the company’s Securities and Exchange Commission filings, including, without limitation, the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The company intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more information becomes available, except as required by law.

Corporate Profile

Sprouts Farmers Market is one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States. Sprouts helps people live and eat better with fresh produce at the heart of the store and delicious discoveries for every dietary lifestyle. Always foraging for what’s fresh and innovative, Sprouts offers a carefully curated assortment of products that inspire wellness naturally, including organic, gluten-free, plant-based and non-GMO favorites. Headquartered in Phoenix, AZ, Sprouts employs approximately 36,000 team members and operates more than 500 stores in 25 states nationwide. To learn more about Sprouts and the role it plays in its communities, visit sprouts.com/about/.

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
	Thirteen weeks ended						Thirty-nine weeks ended
	September 27, 2026			September 28, 2025			September 27, 2026		September 28, 2025
Net sales	$	2,304,720		$	2,200,430		$	6,959,703	$	6,657,468
Cost of sales		1,423,926			1,349,379			4,260,985		4,057,454
Gross profit		880,794			851,051			2,698,718		2,600,014
Selling, general and administrative expenses		683,262			653,329			2,024,676		1,921,682
Depreciation and amortization (exclusive of depreciation included in cost of sales)		44,916			38,862			130,024		110,567
Store closure and other costs/(credits), net		(169	)		1,462			1,752		4,679
Income from operations		152,785			157,398			542,266		563,086
Interest expense/(income), net		1,419			(690	)		1,358		(2,045	)
Income before income taxes		151,366			158,088			540,908		565,131
Income tax provision		37,945			37,972			134,568		131,286
Net income	$	113,421		$	120,116		$	406,340	$	433,845
Net income per share:
Basic	$	1.22		$	1.23		$	4.32	$	4.43
Diluted	$	1.21		$	1.22		$	4.30	$	4.38
Weighted average shares outstanding:
Basic		93,128			97,672			93,976		98,023
Diluted		93,666			98,715			94,556		99,086

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
	September 27, 2026		December 28, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	228,664	$	257,282
Accounts receivable, net		31,539		65,221
Inventories		440,434		427,095
Prepaid expenses and other current assets		35,229		60,306
Total current assets		735,866		809,904
Property and equipment, net of accumulated depreciation		1,246,011		1,085,356
Operating lease assets, net		1,863,438		1,652,732
Intangible assets		208,215		208,215
Goodwill		381,750		381,750
Other assets		23,781		20,692
Total assets	$	4,459,061	$	4,158,649
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	224,740	$	291,033
Accrued liabilities		272,845		304,419
Accrued salaries and benefits		65,501		96,017
Current portion of operating lease liabilities		192,553		177,263
Current portion of finance lease and other finance obligations		3,509		2,071
Total current liabilities		759,148		870,803
Long-term operating lease liabilities		1,909,922		1,682,425
Long-term debt and other finance obligations		129,577		81,585
Other long-term liabilities		44,656		40,283
Deferred income tax liability		86,430		80,479
Total liabilities		2,929,733		2,755,575
Commitments and contingencies
Stockholders’ equity:
Undesignated preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding		—		—
Common stock, $0.001 par value; 200,000,000 shares authorized, 92,673,774 shares issued and outstanding, September 27, 2026; 95,926,024 shares issued and outstanding, December 28, 2025		93		96
Additional paid-in capital		863,652		841,848
Retained earnings		665,583		561,130
Total stockholders’ equity		1,529,328		1,403,074
Total liabilities and stockholders’ equity	$	4,459,061	$	4,158,649

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
	Thirty-nine weeks ended
	September 27, 2026			September 28, 2025
Operating activities
Net income	$	406,340		$	433,845
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		137,671			116,003
Operating lease asset amortization		121,171			107,866
Share-based compensation		19,465			22,045
Deferred income taxes		5,951			(488	)
Other non-cash items		3,819			1,643
Changes in operating assets and liabilities:
Accounts receivable		8,495			24,688
Inventories		(13,339	)		(56,608	)
Prepaid expenses and other current assets		25,836			5,310
Other assets		(3,647	)		(3,928	)
Accounts payable		4,819			23,231
Accrued liabilities		(34,660	)		23,496
Accrued salaries and benefits		(30,516	)		(8,397	)
Accrued income tax		—			11,522
Operating lease liabilities		(102,885	)		(123,680	)
Other long-term liabilities		6,607			923
Cash flows provided by operating activities		555,127			577,471
Investing activities
Purchases of property and equipment		(284,210	)		(176,081	)
Cash flows used in investing activities		(284,210	)		(176,081	)
Financing activities
Payments on finance lease liabilities		(598	)		(793	)
Repurchase of common stock		(299,221	)		(341,925	)
Payments of excise tax on repurchases of common stock		(4,172	)		(2,091	)
Proceeds from exercise of stock options		2,339			1,686
Other financing activities		1,100			—
Cash flows used in financing activities		(300,552	)		(343,123	)
(Decrease)/increase in cash, cash equivalents, and restricted cash		(29,635	)		58,267
Cash, cash equivalents, and restricted cash at beginning of the period		260,894			267,213
Cash, cash equivalents, and restricted cash at the end of the period	$	231,259		$	325,480

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), the company presents EBITDA and EBIT. These measures are not in accordance with, and are not intended as alternatives to, GAAP. The company's management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the company, and certain of these measures may be used as components of incentive compensation.

The company defines EBITDA as net income before interest (income) expense, net, provision for income tax, and depreciation, amortization and accretion. The company defines EBIT as net income before interest (income) expense, net and provision for income tax.

Non-GAAP measures are intended to provide additional information only and do not have any standard meanings prescribed by GAAP. Use of these terms may differ from similar measures reported by other companies. Because of their limitations, non-GAAP measures should not be considered as a measure of discretionary cash available to use to reinvest in the growth of the company’s business, or as a measure of cash that will be available to meet the company’s obligations. Each non-GAAP measure has its limitations as an analytical tool, and they should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP.

The following table shows a reconciliation of EBIT and EBITDA to net income for the thirteen and thirty-nine weeks ended September 27, 2026 and September 28, 2025:

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES NON-GAAP MEASURE RECONCILIATION (UNAUDITED) (IN THOUSANDS)
	Thirteen weeks ended					Thirty-nine weeks ended
	September 27, 2026		September 28, 2025			September 27, 2026		September 28, 2025
Net income	$	113,421	$	120,116		$	406,340	$	433,845
Income tax provision		37,945		37,972			134,568		131,286
Interest (income)/expense, net		1,419		(690	)		1,358		(2,045	)
Earnings before interest and taxes (EBIT)		152,785		157,398			542,266		563,086
Depreciation, amortization and accretion		47,720		40,739			137,671		116,003
EBITDA	$	200,505	$	198,137		$	679,937	$	679,089