Sprouts Farmers Market (SFM) Q2 2026 earnings summary

Executive summary

• Net sales increased 5% year-over-year in Q2 2026 to $2.33 billion, driven by new store openings and strong e-commerce, despite a 1% decline in comparable store sales and a challenging consumer environment.

• Diluted EPS for Q2 2026 was $1.37, up from $1.35 in Q2 2025, primarily due to a lower share count from repurchases.

• Net income for Q2 2026 was $129.2 million, down 3% from the prior year, reflecting higher SG&A expenses and lower comparable store sales.

• Strong cash generation of $134 million in Q2 and $369 million year-to-date, with $70 million in share repurchases in Q2 and $210 million year-to-date.

• Continued expansion with 13 new stores year-to-date, robust adoption of the loyalty program, and ongoing innovation initiatives.

Financial highlights

• Q2 2026 net sales reached $2.33 billion, up from $2.22 billion in Q2 2025, with comparable store sales down 1.0%.

• Gross margin for Q2 2026 was 38.7%, down 0.1 percentage points year-over-year, mainly due to loyalty investments and higher fuel costs.

• EBIT for Q2 2026 was $174.2 million, with an EBIT margin of 7.5%.

• SG&A expenses increased by $38 million, with 30 basis points deleverage, primarily from fixed cost deleverage and business investments.

• Cash from operations year-to-date was $369 million, funding $186 million in capital expenditures (net of landlord reimbursement).

Outlook and guidance

• Full-year 2026 net sales growth expected at 5.5%–6.5%, with comparable store sales between -0.5% and +0.5%.

• Plan to open 42 net new stores in 2026; EBIT guidance is $675–$685 million; diluted EPS outlook is $5.32–$5.40.

• Fiscal year 2026 includes a 53rd week, estimated to add $200 million in sales, $28 million EBIT, and $0.21 in EPS.

• Q3 2026 comparable store sales expected between -0.5% and 1.5%, with diluted EPS of $1.20–$1.24; EBIT margin pressure of ~50 basis points anticipated.

• Fourth quarter margin expected to benefit from easier shrink comparison and loyalty program changes.