SFM Stock Forecast & Price Target

Sprouts Farmers Market Inc has demonstrated significant growth in its e-commerce segment, with sales from online deliveries rising from approximately 11% in 2021 to about 15% currently, aided by partnerships with major delivery services such as Instacart, DoorDash, and UberEats. The company has also successfully launched around 300 new Sprouts Brand products in 2024, which has increased its owned brand penetration from 20% to an expected 24% by the first half of 2025. Additionally, operating margins have shown substantial improvement, expanding approximately 135 basis points year-over-year to reach 8.1%, alongside gross margin improvements to 38.8%, reinforcing the positive financial trajectory of the company.

Sprouts Farmers Market has faced a downward revision in its 2026 EPS estimate, decreasing from $6.01 to $5.65, due to increased promotional intensity and fixed cost deleverage pressures. Additionally, the company is experiencing a sales slowdown, evidenced by a modest decline in September sales figures, raising concerns about the sustainability of its recent sales performance amid tougher year-over-year comparisons. As Sprouts continues to navigate a challenging operating environment, including reduced demand for attribute-based foods and the potential failure to realize benefits from its loyalty program investments, these factors collectively contribute to a negative outlook for the company's stock.