What: Shares of Sprouts Farmers Market Inc (NASDAQ:SFM) closed Friday down 11.6% after the organic grocer announced weaker-than-expected second-quarter revenue and reduced full-year guidance.

So what: Quarterly revenue rose 21% year over year to $902.2 million, helped by the performance of new locations -- including eight opened during the second quarter -- and comparable-store sales growth of 5.1%, while adjusted earnings before interest, taxes, depreciation and amortization climbed 12% to $77.6 million. That translated to 16% growth in adjusted net income to $35 million, and a 10% increase to adjusted net income per diluted share to $0.22.

Analysts, on average, were anticipating roughly the same earnings, but on slightly higher revenue of $903.6 million.

Now what: For the full fiscal year 2015, Sprouts now anticipates net sales will increase 19% to 21% -- down from its previous guidance for net sales growth of 20% to 22% -- driven by 27 total new stores and comparable-store sales growth of 4% to 5%. Meanwhile, adjusted EBITDA is expected to grow 10% to 12% -- down from the prior range of 16% to 19% -- while adjusted earnings per diluted share should be $0.80 to $0.82 -- a reduction from Sprouts' previous expectation for 2015 earnings per share of $0.84 to $0.87.

By comparison, Wall Street's models called for fiscal 2015 revenue to climb 21.3% year over year to $3.60 billion, with adjusted earnings of $0.86 per share.

During the subsequent conference call, Sprouts CFO Amin Maredia blamed the guidance adjustment on a combination of "the increased competitive environment and an inflation environment close to zero," notably compared to roughly 3% inflation last year. Even so, Maredia insisted, "Keep in mind a 4% to 5% comp in a near-zero inflationary environment is above our long-term comp sales target when adjusted for normal inflation." What's more, he pointed out Sprouts' traffic continues to outpace the grocery industry overall, "which is a clear indication that our value proposition is resonating with customers."

That's fair enough, as Sprouts' performance does indicate it's growing steadily and thriving as consumers flock toward healthier grocery options. But with the stock already trading at 29 times trailing-12-month earnings and almost 21 times next year's estimates -- both relative premiums to its still-modest earnings growth -- it's hard to blame the market for reacting so violently to the guidance reduction as competitors continue to pressure the company. For now, and until that pressure shows signs of abating, I'm content watching Sprouts Farmers Market stock from the parking lot.

Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.