2 Reasons to Like SFM and 1 to Stay Skeptical

Stock Story

Sprouts has gotten torched over the last six months - since July 2025, its stock price has dropped 56.1% to $73 per share. This might have investors contemplating their next move.

Given the weaker price action, is now a good time to buy SFM? Find out in our full research report, it’s free.

Why Does Sprouts Spark Debate?

Playing on the secular trend of healthier living, Sprouts Farmers Market is a grocery store chain emphasizing natural and organic products.

Two Positive Attributes:

1. Store Growth Signals an Offensive Strategy

A retailer’s store count influences how much it can sell and how quickly revenue can grow.

Sprouts sported 464 locations in the latest quarter. Over the last two years, it has opened new stores at a rapid clip by averaging 7% annual growth, among the fastest in the consumer retail sector. This gives it a chance to become a large, scaled business over time.

When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.

2. Surging Same-Store Sales Show Increasing Demand

Same-store sales is a key performance indicator used to measure organic growth at brick-and-mortar shops for at least a year.

Sprouts has been one of the most successful retailers over the last two years thanks to skyrocketing demand within its existing locations. On average, the company has posted exceptional year-on-year same-store sales growth of 7.7%.

One Reason to be Careful:

Low Gross Margin Hinders Flexibility

We prefer higher gross margins because they not only make it easier to generate more operating profits but also indicate product differentiation, negotiating leverage, and pricing power.

Sprouts’s gross margin is slightly below the average retailer, giving it less room to invest in areas such as marketing and talent to grow its brand. As you can see below, it averaged a 38.6% gross margin over the last two years. That means Sprouts paid its suppliers a lot of money ($61.43 for every $100 in revenue) to run its business.

Final Judgment

Sprouts has huge potential even though it has some open questions. With the recent decline, the stock trades at 14.2× forward P/E (or $73 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Grocers' Salad Bars Gain Traffic Amid Fast-Casual Dining Slump — Market Talk

Dow Jones Newswires

Sprouts Farmers Market

+2.01%

CAVA Group

+7.42%

Chipotle Mexican Grill

+1.94%

Sweetgreen

+6.90%

Fresh-focused grocery stores are winning more customers around lunchtime as consumers shift away from restaurant-made salads and bowls. Placer.ai data shows fresh format grocers like Sprouts had the strongest year-over-year visit growth, with particular strength around midday. Consumers working from home accounted for 20% of fresh grocers' captured market in the first quarter of 2025, suggesting grocery story salad bars may be an alternative to dining out, Placer.ai says. The trend comes as companies like Chipotle, Cava and Sweetgreen that are known for their affordable work-lunch bowls have recorded lower sales in recent quarters. (katherine.hamilton@wsj.com)

Risk Warnings and Disclaimers

Add to Favorites

Fresh-Focused Grocers Growing Faster Than Value Supermarkets — Market Talk

Dow Jones Newswires

Sprouts Farmers Market

+2.01%

Value-focused grocery stores have passed their peak of growth, according to Placer.ai data. Value grocers like Lidl and Aldi that dominated growth through 2024 are still expanding but have been surpassed in growth by fresh-format grocers like Sprouts, the Placer.ai report says. Much of the trade-down movement has already happened and the most affluent shoppers are driving demand for fresh produce and health-focused food. The fact that value and high-end fresh are leading the way for growth reflects a bifurcation in the consumer, Placer.ai notes. (katherine.hamilton@wsj.com)

Risk Warnings and Disclaimers

Add to Favorites

Top Supermarket Stocks to Watch in 2026: Kroger Leads Value Plays

Investing.com

Advanced Micro Devices

-17.31%

Public Service Enterprise Group

-1.74%

NVIDIA

-3.41%

Investing.com -- The supermarket sector presents compelling investment opportunities for 2026, with several chains offering attractive valuations despite ongoing industry challenges. According to WarrenAI’s analysis using Investing Pro metrics, these grocery retailers stand out for their combination of value, growth potential, and stability.

Kroger leads the pack as the top supermarket stock for defensive investors in 2026. Despite a modest 3.6% one-year return, the company trades below both its fair value of $63.58 and analyst target of $73.86, offering 6.5% upside according to InvestingPro. With a solid 2.0% dividend yield and a forward P/E of 12.0x, Kroger presents quality at a discount.

Examine more top stocks in different sectors using WarrenAI by upgrading to InvestingPro -

1. Kroger (NYSE:KR): Trading at $59.68, Kroger offers value and stability with a 2.0% dividend yield and a Pro Score of 2.17. The company’s forward PEG ratio of 0.62 indicates significant growth potential relative to its current valuation. The company’s EPS growth is forecast above 35%, with a low forward PEG ratio of 0.62 signaling undervaluation. Recent asset sales and a renewed focus on core grocery operations suggest a leaner, more focused business moving forward. While technicals appear bearish short-term, the fundamentals look strong for a potential rebound.

2. Albertsons Companies (NYSE:ACI): At $16.81, Albertsons represents a deep value play with considerable risk. Despite a -13.8% one-year return, it trades at an attractive forward P/E of 7.5x and PEG of 0.32. Analysts see substantial upside to $22.35 (32.9% above current price), though InvestingPro’s fair value of $15.60 suggests caution. The company offers a 2.9% dividend yield and has appeared on JPMorgan’s list of top consumer stocks for 2026, despite ongoing concerns about its high debt levels.

3. Sprouts Farmers Market (NASDAQ:SFM): Priced at $77.59, Sprouts emerges as the sector’s growth leader with the highest Pro Score (3.06) and impressive revenue growth forecast (14.1%). After suffering a steep -45% one-year decline, the stock now trades at a forward P/E of 14.4x and PEG of 0.39, potentially offering growth at a bargain. The company boasts the sector’s top ROIC at 13.0%, though analyst sentiment remains mixed with Deutsche Bank recently initiating coverage with a Hold rating and $88 target.

4. Weis Markets (NYSE:WMK): At $65.23, Weis Markets offers defensive characteristics with the lowest debt ratio (12% D/E) and a consistent 2.0% dividend yield. Trading below its fair value of $77.34 with 18.6% potential upside, the company provides stability but limited growth prospects, as reflected in its 0% growth forecast and higher PEG ratio of 2.04. For risk-averse investors, it represents a safe option without significant upside potential.

These supermarket stocks present varied investment profiles for 2026, from value plays to growth opportunities, allowing investors to select based on their risk tolerance and investment goals.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Risk Warnings and Disclaimers

Add to Favorites

Sprouts Farmers Market, Inc. Securities Fraud Class Action Result of Undisclosed Financial Problems And 26% Stock Decline - Investors May Contact Lewis Kahn, Esq, at Kahn Swick & Foti, LLC

Acceswire

Sprouts Farmers Market

+2.01%

NEW YORK CITY, NY AND NEW ORLEANS, LA / ACCESS Newswire / December 22, 2025 / Kahn Swick & Foti, LLC ("KSF") and KSF partner, former Attorney General of Louisiana, Charles C. Foti, Jr., remind investors with substantial losses that they have until January 26, 2026 to file lead plaintiff applications in a securities class action lawsuit against Sprouts Farmers Market, Inc. ("Sprouts" or the "Company") (NasdaqGS:SFM), if they purchased or otherwise acquired the Company's securities between June 4, 2025 and October 29, 2025, inclusive (the "Class Period"). This action is pending in the United States District Court for the District of Arizona.

What You May Do

If you purchased securities of Sprouts and would like to discuss your legal rights and how this case might affect you and your right to recover for your economic loss, you may, without obligation or cost to you, contact KSF Managing Partner Lewis Kahn toll-free at 1-877-515-1850 or via email (lewis.kahn@ksfcounsel.com), or visit https://www.ksfcounsel.com/cases/nasdaqgs-sfm/ to learn more. If you wish to serve as a lead plaintiff in this class action, you must petition the Court by January 26, 2026.

About the Lawsuit

Sprouts and certain of its executives are charged with failing to disclose material information during the Class Period, violating federal securities laws.

On October 29, 2025, the Company announced its third quarter fiscal 2025 results, disclosing comparable stores sales growth below expectations as well as disappointing fourth quarter guidance and cuts to its full year estimates, despite raising them only one quarter prior, due to "challenging year-on-year comparisons as well as signs of a softening consumer."

On this news, the price of Sprouts' shares fell from a closing market price of $104.55 per share on October 29, 2025 to $77.25 per share on October 30, 2025, a decline of about 26.11% in the span of just a single day.

The case is Singh Family Revocable Trust u/a dtd 02/18/2019 v. Sprouts Farmers Market, Inc., et al., No. 25-cv-04416.

About Kahn Swick & Foti, LLC

KSF, whose partners include former Louisiana Attorney General Charles C. Foti, Jr., is one of the nation's premier boutique securities litigation law firms. This past year, KSF was ranked by SCAS among the top 10 firms nationally based upon total settlement value. KSF serves a variety of clients, including public and private institutional investors, and retail investors - in seeking recoveries for investment losses emanating from corporate fraud or malfeasance by publicly traded companies. KSF has offices in New York, Delaware, California, Louisiana, Chicago, and a representative office in Luxembourg.

TOP 10 Plaintiff Law Firms - According to ISS Securities Class Action Services

To learn more about KSF, you may visit www.ksfcounsel.com.

Contact:

Kahn Swick & Foti, LLC

Lewis Kahn, Managing Partner

lewis.kahn@ksfcounsel.com

1-877-515-1850

1100 Poydras St., Suite 960

New Orleans, LA 70163

CONNECT WITH US: Facebook || Instagram || YouTube || TikTok || LinkedIn

SOURCE: Kahn Swick & Foti, LLC

View the original press release on ACCESS Newswire

Risk Warnings and Disclaimers

Add to Favorites

Pomerantz LLP Highlights Legal Filing Against Sprouts Farmers Market, Inc. – SFM

Acceswire

Sprouts Farmers Market

+2.01%

NEW YORK CITY, NY / ACCESS Newswire / December 22, 2025 / Pomerantz LLP announces that a class action lawsuit has been filed against Sprouts Farmers Market, Inc. ("Sprouts" or the "Company") . Such investors are advised to contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980, (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.

The class action concerns whether Sprouts and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.

You have until January 26, 2026 to ask the Court to appoint you as Lead Plaintiff for the class if you purchased or otherwise acquired Sprouts securities during the Class Period. A copy of the Complaint can be obtained at www.pomerantzlaw.com.

[Click here for information about joining the class action]

On October 29, 2025, Sprouts announced disappointing top-line results for the third quarter of fiscal 2025 with comparable stores growth faltering below the Company's expectations. Sprouts further announced disappointing fourth quarter guidance and further slashed its full year estimates, despite raising them only one quarter prior. The Company attributed its results and lowered guidance on "challenging year-on-year comparisons as well as signs of a softening consumer."

On this news, Sprouts' stock price fell $27.30 per share, or 26.11%, to close at $77.25 per share on October 30, 2025.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes.

SOURCE: Pomerantz LLP

View the original press release on ACCESS Newswire

Risk Warnings and Disclaimers

Add to Favorites

Pomerantz LLP Highlights Class Action Filing Against Sprouts Farmers Market, Inc. – SFM

Acceswire

Sprouts Farmers Market

+2.01%

NEW YORK CITY, NY / ACCESS Newswire / December 21, 2025 / Pomerantz LLP announces that a class action lawsuit has been filed against Sprouts Farmers Market, Inc. ("Sprouts" or the "Company") . Such investors are advised to contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980, (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.

The class action concerns whether Sprouts and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.

[Click here for information about joining the class action]

On this news, Sprouts' stock price fell $27.30 per share, or 26.11%, to close at $77.25 per share on October 30, 2025.

Attorney advertising. Prior results do not guarantee similar outcomes.

SOURCE: Pomerantz LLP

View the original press release on ACCESS Newswire

Risk Warnings and Disclaimers

Add to Favorites