Over the past three years, Sprouts Farmers Market (SFM +4.92%) has experienced roller-coaster price action. When it was one of the popular small-cap growth stocks, shares in the organic grocery store chain surged from the low $40s to more than $180. However, starting last summer, the stock lost its sterling reputation following a series of poorly received company developments.
The sell-off continued into 2026, but consumer staples stock Sprouts Farmers Market is slowly turning things around, gaining 11% in the last month.
NASDAQ: SFM
Key Data Points
The question now is whether this continues. Taking a look at the details, I can identify one clear takeaway. It will all depend on whether Sprouts keeps beating expectations in the coming quarters.
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Sprouts Farmers Market's steep drop and emerging comeback
It's not surprising that sentiment for Sprouts took a sharp turn during the latter half of 2025. As with other consumer-focused businesses, high inflation on consumer spending affected operating performance.
For Sprouts, inflation led to lower sales growth, coupled with lower margins. For example, throughout 2025, year-over-year sales growth declined from 19% in he first quarter to just 13% in the third quarter. Same-store sales growth fell from 11.7% to 5.9%, while quarterly earnings per share fell from $1.81 to $1.22 .
Sprouts' fourth-quarter results, released on Feb. 19, however, were an improvement. Although revenue of $2.15 billion came up short of expectations, EPS of $0.92 beat estimates by $0.03. Overall sales grew 8%. Same-store sales grew 1.6%, beating prior guidance that growth would be flat.
Moreover, management accompanied these figures with 2026 guidance that suggests results will stabilize this year. Guidance calls for net sales growth in a range from 4.5% to 6.5%, with same-store sales ranging from -1% to 1%.
Getting back to $100 per share could prove challenging
Currently, Sprouts Farmers Market trades for around 13 times forward earnings. This valuation is in line with most U.S.-listed grocery store stocks.
Recovering $100 per share in the immediate future may be a stretch. This is, unless, of course, Sprouts not only meets expectations but beats them handily in the coming quarters. Even as the company may be stabilizing, that's not the same as a growth resurgence.
Moving forward, a lot hinges on whether Sprouts' plan to continue aggressively expanding its store count will lead to better-than-expected growth. Management may be bullish it can successfully expand as Amazon's Whole Foods chain does the same, but the market may be in "wait and see" mode. On the other hand, macro challenges such as high inflation could continue to put pressure on consumer demand and growth.
Sprouts' $1 billion share repurchase program could provide support for shares. Announced last August, Sprouts bought back around $472 million worth of shares, with plans to buy back another $300 million throughout the year. This figure represents around 4.2% of Sprout Farmers Market's current market cap. This could help further stabilize earnings, and at best, could give the bottom line an unexpected boost in the coming quarters.
