Sprouts Farmers Market (SFM) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 rose 19% year-over-year to $2.24 billion, with comparable store sales up 11.7% and strong new store performance; 443 stores in 24 states as of March 2025.

• Diluted EPS increased 62% to $1.81, and net income rose 58% to $180 million, reflecting robust execution and a differentiated health-focused strategy.

• E-commerce sales grew 28% and now represent over 14% of total sales; Sprouts brand contributed $1.7B in 2024 and 24% of sales.

• Strategic initiatives include a new loyalty program launching in 2025, supply chain optimization, and self-distribution of fresh meat and seafood.

• The company remains focused on health-enthusiast customers, innovation, and expanding its store footprint, with potential for 1,000+ locations nationwide.

Financial highlights

• Net income for Q1 2025 was $180 million; EBIT reached $226 million; EBITDA was $263 million.

• Gross margin expanded to 39.6% (up 129 bps year-over-year); operating margin improved to 10.1% from 7.9%.

• SG&A totaled $623 million, with 79 bps of leverage; store closure and disaster recovery costs were $2 million.

• Operating cash flow was $299 million in Q1 2025; $49 million invested in capital expenditures (net of landlord reimbursement).

• $219 million returned to shareholders via repurchase of 1.6 million shares; ended Q1 with $286 million in cash and no revolver debt.

Outlook and guidance

• 2025 sales growth expected at 12%-14%, with comp sales of 5.5%-7.5% and EBIT guidance of $640-$660 million; EPS expected between $4.94 and $5.10.

• At least 35 new stores planned for 2025; capital expenditures projected at $230-$250 million.

• Q2 2025 comp sales expected at 6.5%-8.5%, with EPS between $1.19 and $1.23; continued EBIT margin expansion anticipated.

• Management anticipates continued 10% annual unit growth and ongoing margin improvements.

• Sufficient liquidity projected for at least the next 12 months, supported by strong cash flow and no debt.