Sprouts Farmers Market, Inc. Reports Third Quarter 2025 Results

PHOENIX--( BUSINESS WIRE)--Sprouts Farmers Market, Inc. (Nasdaq: SFM) today reported results for the 13-week third quarter ended September 28, 2025.

"We are opening stores nationwide, and our strategy continues to resonate with our target customers, resulting in strong third quarter performance," said Jack Sinclair, chief executive officer of Sprouts Farmers Market. "Our passionate team members, financial foundation, and disciplined execution will position us to deliver sustainable earnings growth, as we navigate strong year-over-year comparisons."

Third Quarter Highlights:

Leverage and Liquidity in Third Quarter 2025

Fourth Quarter and Full-Year 2025 Outlook

The following provides information on our fourth quarter 2025 outlook:

The following provides information on our full-year 2025 outlook:

Third Quarter 2025 Conference Call

Sprouts will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, October 29, 2025, during which Sprouts executives will further discuss third quarter 2025 financial results.

A webcast of the conference call will be available through Sprouts’ investor relations webpage, accessible via the following link. Participants should register on the website approximately ten minutes prior to the start of the webcast.

A webcast replay will be available at approximately 8:00 p.m. Eastern Time on October 29, 2025. This can be accessed with the following link.

Important Information Regarding Outlook

There is no guarantee that Sprouts will achieve its projected financial expectations, which are based on management estimates, currently available information and assumptions that management believes to be reasonable. These expectations are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. See “Forward-Looking Statements” below.

Forward-Looking Statements

Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact (including, but not limited to, statements to the effect that Sprouts Farmers Market or its management "anticipates," "plans," "estimates," "expects," "will," or "believes," or the negative of these terms and other similar expressions) should be considered forward-looking statements, including, without limitation, statements regarding the company’s outlook, growth, opportunities and long-term strategy. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this release. These risks and uncertainties include, without limitation, the company’s ability to execute on its long-term strategy; the company’s ability to successfully compete in its competitive industry; the company’s ability to successfully open new stores; the company’s ability to manage its growth; the company’s ability to maintain or improve its operating margins; the company’s ability to identify and react to trends in consumer preferences; product supply disruptions; equipment supply disruptions; general economic conditions that impact consumer spending or result in competitive responses; accounting standard changes; potential inflationary and/or deflationary trends; tariffs; and other factors as set forth from time to time in the company’s Securities and Exchange Commission filings, including, without limitation, the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The company intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more information becomes available, except as required by law.

Corporate Profile

True to its farm-stand heritage, Sprouts offers a unique grocery experience featuring an open layout with fresh produce at the heart of the store. Sprouts inspires wellness naturally with a carefully curated assortment of better-for-you products paired with purpose-driven people. The healthy grocer continues to bring the latest in wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based and gluten-free. Headquartered in Phoenix, and one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States, Sprouts employs approximately 35,000 team members and operates more than 450 stores in 24 states nationwide. To learn more about Sprouts, and the good it brings communities, visit sprouts.com/about/.

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Thirteen weeks ended

Thirty-nine weeks ended

September 28,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Net sales

2,200,430

1,945,735

6,657,468

5,723,062

Cost of sales

1,349,379

1,204,812

4,057,454

3,541,461

Gross profit

851,051

740,923

2,600,014

2,181,601

Selling, general and administrative expenses

653,329

580,332

1,921,682

1,676,470

Depreciation and amortization (exclusive of depreciation included in cost of sales)

38,862

34,408

110,567

98,129

Store closure and other costs, net

1,462

3,732

4,679

8,968

Income from operations

157,398

122,451

563,086

398,034

Interest income, net

(690

)

(1,061

)

(2,045

)

(382

)

Income before income taxes

158,088

123,512

565,131

398,416

Income tax provision

37,972

31,902

131,286

97,417

Net income

120,116

91,610

433,845

300,999

Net income per share:

Basic

1.23

0.91

4.43

2.99

Diluted

1.22

0.91

4.38

2.97

Weighted average shares outstanding:

Basic

97,672

100,148

98,023

100,560

Diluted

98,715

101,025

99,086

101,469

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

September 28,

2025

December 29,

2024

ASSETS

Current assets:

Cash and cash equivalents

322,415

265,159

Accounts receivable, net

64,848

30,901

Inventories

399,938

343,329

Prepaid expenses and other current assets

30,344

36,131

Total current assets

817,545

675,520

Property and equipment, net of accumulated depreciation

989,587

895,189

Operating lease assets, net

1,596,100

1,466,903

Intangible assets

208,215

208,094

Goodwill

381,750

Other assets

19,925

13,243

Total assets

4,013,122

3,640,699

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

268,330

213,414

Accrued liabilities

239,836

216,842

Accrued salaries and benefits

89,595

97,991

Accrued income tax

11,522

—

Current portion of operating lease liabilities

170,614

150,400

Current portion of finance lease and other finance obligations

1,597

1,321

Total current liabilities

781,494

679,968

Long-term operating lease liabilities

1,633,293

1,520,272

Long-term debt and other finance obligations

53,423

7,248

Other long-term liabilities

37,783

38,259

Deferred income tax liability

72,571

73,059

Total liabilities

2,578,564

2,318,806

Commitments and contingencies

Stockholders’ equity:

Undesignated preferred stock; $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding

—

Common stock, $0.001 par value; 200,000,000 shares authorized, 97,451,026 shares issued and outstanding, September 28, 2025; 99,255,036 shares issued and outstanding, December 29, 2024

Additional paid-in capital

831,870

808,140

Retained earnings

602,590

513,654

Total stockholders’ equity

1,434,558

1,321,893

Total liabilities and stockholders’ equity

4,013,122

3,640,699

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN THOUSANDS)

Thirty-nine weeks ended

September 28,

2025

September 29,

2024

Operating activities

Net income

433,845

300,999

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

116,003

103,881

Operating lease asset amortization

107,866

99,278

Share-based compensation

22,045

19,925

Deferred income taxes

(488

)

1,170

Other non-cash items

1,643

3,116

Changes in operating assets and liabilities:

Accounts receivable

24,688

30,273

Inventories

(56,608

)

(6,275

)

Prepaid expenses and other current assets

5,310

18,595

Other assets

(3,928

)

219

Accounts payable

23,231

25,556

Accrued liabilities

23,496

37,877

Accrued salaries and benefits

(8,397

)

6,777

Accrued income tax

11,522

1,392

Operating lease liabilities

(123,680

)

(122,646

)

Other long-term liabilities

923

214

Cash flows from operating activities

577,471

520,351

Investing activities

Purchases of property and equipment

(176,081

)

(161,687

)

Cash flows used in investing activities

(176,081

)

(161,687

)

Financing activities

Payments on revolving credit facilities

—

(125,000

)

Payments on finance lease liabilities

(793

)

(840

)

Repurchase of common stock

(341,925

)

(129,698

)

Payments of excise tax on repurchases of common stock

(2,091

)

—

Proceeds from exercise of stock options

1,686

4,729

Cash flows used in financing activities

(343,123

)

(250,809

)

Increase in cash, cash equivalents, and restricted cash

58,267

107,855

Cash, cash equivalents, and restricted cash at beginning of the period

267,213

203,870

Cash, cash equivalents, and restricted cash at the end of the period

325,480

311,725

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), the company presents EBITDA and EBIT. These measures are not in accordance with, and are not intended as alternatives to, GAAP. The company's management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the company, and certain of these measures may be used as components of incentive compensation.

The company defines EBITDA as net income before interest expense, provision for income tax, and depreciation, amortization and accretion. The company defines EBIT as net income before interest expense and provision for income tax.

Non-GAAP measures are intended to provide additional information only and do not have any standard meanings prescribed by GAAP. Use of these terms may differ from similar measures reported by other companies. Because of their limitations, non-GAAP measures should not be considered as a measure of discretionary cash available to use to reinvest in the growth of the company’s business, or as a measure of cash that will be available to meet the company’s obligations. Each non-GAAP measure has its limitations as an analytical tool, and they should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP.

The following table shows a reconciliation of EBIT and EBITDA to net income for the thirteen and thirty-nine weeks ended September 28, 2025 and September 29, 2024:

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

NON-GAAP MEASURE RECONCILIATION

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Thirteen weeks ended

Thirty-nine weeks ended

September 28,

2025

September 29,

2024

September 28,

2025

September 29,

2024

Net income

120,116

91,610

433,845

300,999

Income tax provision

37,972

31,902

131,286

97,417

Interest (income) expense, net

(690

)

(1,061

)

(2,045

)

(382

)

Earnings before interest and taxes (EBIT)

157,398

122,451

563,086

398,034

Depreciation, amortization and accretion

40,739

36,125

116,003

103,881

EBITDA

198,137

158,576

679,089

501,915