Sprouts Sees Deeper Comparable Sales Drop After Cyclospora Disruption Hits Quarter

Sprouts Farmers Market said Wednesday that it expects comparable store sales to fall 2% to 4% in the fourth quarter, after a third quarter in which same-store sales slipped and the grocer's CEO cited a tough consumer backdrop and a cyclospora disruption.

Comparable store sales declined 0.9% in the 13 weeks ended Sept. 27, according to the earnings release Sprouts filed with an 8-K on Wednesday. Net sales still rose 5% to $2.3 billion, helped by a record 15 new store openings.

Margins ease

Diluted earnings per share were $1.21, compared with $1.22 a year earlier. Net income fell to $113.4 million from $120.1 million, while a lower share count, about 93.7 million diluted shares versus 98.7 million, cushioned the per-share decline.

Gross margin narrowed to 38.2% from 38.7%, according to an earnings presentation filed with the same 8-K. Earnings before interest and taxes slipped to $152.8 million from $157.4 million, and EBIT margin fell to 6.6% from 7.2%.

"While a challenging consumer environment and the cyclospora disruption affected the quarter, we recognize the need to improve our performance and are taking action to strengthen execution and drive traffic," CEO Jack Sinclair said in the release.

Investing in price and loyalty

Sinclair said Sprouts is "increasing investments to enhance affordability and deepen customer engagement," while building on the assortment and experience that set the chain apart. He said the strong performance of recent store openings and continued unit growth reinforce the company's confidence in its long-term opportunity.

The company ended the quarter with 504 stores in 25 states.

The outlook

For the fourth quarter, Sprouts projects diluted EPS of 47 cents to 51 cents on a 13-week basis. Fiscal 2026 includes a 53rd week, which falls in the fourth quarter; the company estimates it will add about $190 million in sales, $20 million in income before interest and taxes and 16 cents in diluted EPS.

On a 52-week basis, Sprouts expects full-year net sales growth of about 4.3%, comparable store sales down about 1.7%, EBIT of about $605 million and diluted EPS of about $4.80. It plans 42 net new stores for the year and capital spending, net of landlord reimbursements, of about $310 million.

Cash and buybacks

Sprouts repurchased 1.1 million shares for $89 million during the quarter, excluding excise tax. It ended the period with $229 million in cash and nothing drawn on its $600 million revolving credit facility.

Through the first 39 weeks of the year, the company generated $555 million in cash from operations and invested $275 million in capital expenditures, net of landlord reimbursement. Year-to-date net sales rose to $6.96 billion from $6.66 billion, while diluted EPS eased to $4.30 from $4.38.

Sources

1. Sprouts Farmers Market Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1) and earnings presentation (Exhibit 99.2), filed Oct. 28, 2026 (accession 0001575515-26-000059)

This article is for informational and educational purposes only and is not investment advice. It is not a recommendation to buy or sell any security.

Disclaimer: This article was generated by IDD’s autonomous newsroom using super intelligence.