10-Q · April 29, 2026
Sprouts Farmers Market (SFM) reported a Q1 2026 revenue of $2.33 billion, representing a 4% increase year-over-year. Although diluted EPS decreased to $1.71 from $1.81 due to lower net income, management remains focused…
Earnings analysis · 10-Q
SFM earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Sprouts delivered Q2 revenue of $2.326 billion, up 5% year over year but modestly below the prior quarter's $2.33 billion, while diluted EPS of $1.37 rose 1% year over year but fell from $1.71 in Q1. Gross margin…
Read full summary
Sprouts delivered Q2 revenue of $2.326 billion, up 5% year over year but modestly below the prior quarter's $2.33 billion, while diluted EPS of $1.37 rose 1% year over year but fell from $1.71 in Q1. Gross margin declined to 38.7% from 38.8% a year ago and operating income fell $5.2 million to $174.2 million as comparable sales declined 1.0% and investment costs increased. Liquidity remains sound with $369.0 million of first-half operating cash flow, no long-term debt and $226.5 million of cash, though heavier $189.9 million first-half capex and working-capital outflows reduced cash conversion.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.37
What stood out
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New stores lifted sales 5%
Q2 net sales increased $105.2 million, or 5%, year over year to $2.326 billion, driven by stores opened in the past 12 months. The store base reached 490 at June 28, 2026, up from 455 a year earlier after 7 Q2 openings.
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Buybacks supported EPS growth
Diluted EPS rose $0.02 year over year to $1.37 despite net income declining $4.5 million to $129.2 million, as diluted shares fell by 4.4 million to 94.4 million following repurchases.
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Debt-free balance sheet and solid cash flow
The company generated $369.0 million of operating cash flow in the first 26 weeks and had no long-term debt outstanding at June 28, 2026. It retained $226.5 million of cash, cash equivalents and restricted cash.
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Investment supports store expansion
Capital investment accelerated to $189.9 million in the first 26 weeks, versus $120.3 million a year earlier, supporting new stores, remodels, maintenance and corporate investments. Management expects approximately $310 million of fiscal-2026 capex.
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Supply-chain scale is advancing
Self-distribution and vendor participation partially offset margin pressure, and approximately 80% of stores were within 250 miles of a distribution center as of June 28, 2026.
What to watch
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Comparable sales remain negative
Comparable-store sales declined 1.0% in Q2, versus growth of 10.2% in the prior-year quarter; comparable stores represented approximately 93% of total Q2 sales. The 5% sales increase was therefore dependent on new-store contribution.
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Margins compressed on costs and investment
Q2 gross margin declined 10 basis points year over year to 38.7%, while operating margin was approximately 7.5% on $174.2 million of operating income, down from $179.4 million. Management cited loyalty-program effects and elevated fuel costs.
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Working capital reduced cash conversion
First-half operating cash flow fell $41.3 million to $369.0 million as working-capital cash flow swung to a $56.9 million use from a $15.6 million source. Drivers included a $59.5 million accounts-payable/accrual change and a $14.9 million receivables change.
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No risk-factor updates; pricing risk persists
There were no material changes to risk factors from the 2025 Form 10-K. However, management notes that food inflation or deflation, competitive pricing and promotional activity could pressure sales, gross margin and comparable-store sales; Q2 comparable sales were already down 1.0%.
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First-half earnings declined
First-half net income declined $20.8 million, or 7%, to $292.9 million and diluted EPS declined $0.08 to $3.08. Higher SG&A, up $73.1 million or 6%, and lower comparable sales outweighed 4% sales growth.
Management's outlook
The 10-Q does not provide revenue or EPS guidance. MD&A states expected fiscal 2026 capital expenditures of approximately $310 million, including spending to date, funded by cash on hand and operating cash flow.
Earlier filings 4
10-K · February 19, 2026
Sprouts (SFM) shows multi-year top-line and margin improvement driven by store growth, product innovation and supply‑chain initiatives. Fiscal 2025 benefitted from opening 112 new stores (2021–2025), Sprouts Brand…
10-Q · October 29, 2025
Sprouts reported a year-over-year revenue increase to $2,200,430 (thousands) and diluted EPS of $1.22 for the thirteen weeks ended September 28, 2025, with gross profit of $851,051 and operating income of $157,398.…
10-Q · May 1, 2024
Sprouts reported quarterly net sales of $1,883,808,000 (up $150,498,000 or ~8.7% vs $1,733,310,000 a year ago) with diluted EPS of $1.12 (vs $0.73 prior year). Gross margin expanded to 38.36% and operating income rose…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.