Fourth-quarter outlook sends Sprouts shares down nearly 15% after results
Key Facts
Sprouts shares fell about 15% in after-hours trading on October 28 after the company reported third-quarter results and issued a weaker fourth-quarter outlook, according to Investing.com, citing Reuters. The company forecast diluted earnings of $0.47 to $0.51 per share for the coming quarter. It also expected comparable-store sales to decline 2% to 4%. The outlook puts the performance of existing stores at the center of investors’ attention in the coming period. The shares had closed at $64.41 on October 27, before the results were announced, compared with closes of $65.91 on October 26 and $66.26 on October 23, according to EL7 data.
The company said the quarter was affected by a challenging consumer environment and a cyclospora disruption that hurt some fresh-produce categories. It described the economic backdrop as uneven, citing declining shopper traffic and cautious spending, according to Sprouts via StreetInsider. Chief Executive Jack Sinclair said the company was “increasing investments to strengthen affordability and deepen customer engagement.” He added that management was taking steps to improve execution and increase shopper traffic. For the second quarter, management had also discussed a cautious consumer environment, but at the time pointed to strong performance at new stores, according to the company.
The company’s net income fell to $113.421 million in the third quarter of 2026, compared with $120.116 million in the same period of 2025, according to company results reported by StockTitan. In the second quarter of 2026, diluted earnings per share were $1.37, versus $1.35 in the second quarter of 2025. Second-quarter sales rose 5% to $2.3 billion, according to the company’s results. The comparison between the two periods shows that annual sales growth in the second quarter came alongside improved diluted earnings, while third-quarter net income declined year over year. In the third quarter, the company increased share repurchases while continuing its investments in pricing and customer engagement.
For fiscal 2026, a 52-week year, Sprouts expects net sales growth of about 4.3% and diluted earnings of approximately $4.80 per share, and estimated earnings before interest and taxes at about $605 million. These annual estimates exclude the impact of the 53rd fiscal week, which the company expects to add about $190 million to sales. It estimated the extra week would contribute about $20 million to earnings before interest and taxes and $0.16 to diluted earnings per share. For the fourth quarter, the company expects comparable sales to decline, alongside a lower diluted earnings range. Management said the third-quarter results call would begin on October 28, 2026, at 5 p.m. Eastern time, with a replay available at around 8 p.m.