Sprouts Sees Comparable Sales Falling 1.7% in 2026 Despite 4.3% Revenue Growth
Key Facts
Sprouts Farmers Market expects comparable store sales to fall about 1.7% in fiscal 2026, despite net sales growth of about 4.3%, based on the company’s 52-week outlook. The annual guidance came as the company reported a 0.9% decline in comparable sales in the third quarter, against a 5% increase in net sales to $2.3 billion. Diluted earnings per share were $1.21, compared with $1.22 in the third quarter of 2025. Chief Executive Jack Sinclair said a challenging consumer environment and a cyclospora disruption affected quarterly results. “We recognize the need to improve our performance,” he added. The results highlight a gap between overall revenue growth and declining sales at established stores as the company seeks to restore customer traffic through price investment.
Comparable sales weakness extended into previous quarters, falling 1.7% in the first quarter and 1% in the second, while net sales continued to grow. In the first quarter, net sales rose 4% to $2.3 billion, then increased 5% to $2.3 billion in the second quarter. In the third quarter, net sales also grew 5%, but comparable sales remained down 0.9%. Management said the summer cyclospora disruption reduced comparable sales by about 60 basis points in the third quarter. The impact puts part of the decline in the context of a specific disruption, while the company continues to face pressure on established-store performance.
Third-quarter results fell short of published analyst estimates: earnings per share were $1.21 versus an estimate of $1.23, while revenue was $2.3 billion versus an estimate of $2.34 billion, according to Investing.com. The company set a fourth-quarter range for comparable sales declines of 2% to 4% and diluted earnings per share of $0.47 to $0.51, based on 13 weeks. For fiscal 2026, it expects earnings before interest and taxes of about $605 million and diluted earnings per share of about $4.80, alongside net sales growth of about 4.3%. The fiscal year includes an extra week in the fourth quarter, which the company estimates will add about $190 million to sales, $20 million to earnings before interest and taxes and $0.16 to diluted earnings per share. These annual estimates provide context for the extra week when comparing the outlook with results for a 52-week year.
In response to weak comparable sales, Sprouts plans to launch a nationwide pricing strategy in January 2027. Management said the plan will expand lower-cost entry points and value across its product range, without shifting to broad discounts or making price the basis of competition. Nick Conard, the incoming chief executive, said the plan “is not a move to broad discounting or an attempt to compete on price alone.” Examples cited by management include family meals for four priced at $29.99 and freshly baked organic sourdough bread at $4, which it said had received encouraging responses. Ahead of the national launch, the company cut prices on healthy and holiday-related staples, while management said it would monitor customer response during the holiday season. The plan links an effort to improve affordability with preserving the distinctiveness of the store assortment.
The company is continuing to expand while addressing established-store performance: it opened 15 stores in the third quarter, bringing its total to 504 across 25 states as of September 27, 2026. E-commerce sales rose 12% in the quarter and accounted for more than 16% of total sales, while the Sprouts brand represented about 26%. After the results were announced, an Investing.com report said the stock fell 3.74% in regular trading on October 28, then dropped 21.13% in after-hours trading to $48.90. A separate report said results missed analyst estimates, including for revenue and earnings per share. The stock move and the mix of digital and private-label sales provide additional context for the results, while fourth-quarter guidance will cover the first full fiscal period in which to assess the impact of the new pricing strategy.