Sprouts Farmers (1FA) Q3 2026 Earnings Report

The call included meaningful structural positives, including strong new-store performance, e-commerce growth, a substantial store pipeline, cash generation, and a differentiated health and wellness proposition. However, the dominant tone was cautious to negative because comparable sales, transactions, traffic, frequency, margins, and EPS were under pressure; the full-year outlook was reduced; shrink and fuel costs remained challenges; and management acknowledged that substantial pricing and other investments would create near-term margin pressure.

For 2026, on a 52-week basis, Sprouts now expects total sales growth of approximately 4.3%, comparable store sales of approximately negative 1.7%, 42 net new stores, EBIT of approximately $605 million, a corporate tax rate of approximately 25%, capital expenditures net of landlord reimbursements of approximately $310 million, and diluted earnings per share of approximately $4.80, assuming more than $300 million in share repurchases; full-year share repurchases are expected to exceed $300 million. For the fourth quarter, comparable store sales are expected to be between negative 2% to negative 4% and diluted earnings per share between $0.47 and $0.51, including gross margin deleverage of approximately 90 basis points and SG&A deleverage of approximately 170 basis points. The additional 53rd week is expected to contribute approximately $190 million of sales, $20 million in EBIT, and $0.16 of diluted earnings per share, while EBIT margins are expected to remain above 5%; the company is not ready to guide for 2027 or speak to the comp as it relates.