Sprouts Farmers Market (SFM) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 increased 4% year-over-year to $2.33 billion, driven by new store openings, though comparable store sales declined 1.7%.

• Diluted EPS for Q1 2026 was $1.71, down from $1.81 in the prior year, reflecting margin pressures and higher expenses.

• Six new stores opened in Q1, bringing the total to 483 across 25 states, with strong performance in new markets.

• Cash generation remained strong at $235 million, supporting $140 million in share repurchases.

• Initiatives such as loyalty program adoption, self-distribution of meat, and over 1,500 new items launched contributed to operational momentum.

Financial highlights

• Gross margin for Q1 2026 was 39.4%, down 20 basis points year-over-year due to loyalty investments and shrink.

• EBIT was $215 million with a margin of 9.2%; net income was $164 million, down from $180 million a year ago.

• Gross profit rose to $917 million, while SG&A increased to $659 million, reflecting deleverage from lower comp sales.

• Operating cash flow was $235 million; capital expenditures were $98 million net of landlord reimbursement.

• EBITDA for Q1 2026 was $260 million, compared to $263 million in Q1 2025.

Outlook and guidance

• Full-year 2026 net sales growth projected at 4.5% to 6.5%; comparable store sales between -1% and 1%.

• EBIT guidance for 2026 is $675–$695 million; diluted EPS expected between $5.32 and $5.48, assuming $300 million in share repurchases.

• Over 40 new store openings planned for 2026; capital expenditures expected between $280 million and $310 million.

• Q2 2026 comparable store sales expected between -2% and 0%; EPS guidance of $1.32 to $1.36.

• 53rd week in fiscal 2026 expected to add $200 million in sales, $28 million EBIT, and $0.21 EPS.