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With Sprouts Farmers Market, Inc. SFM set to announce its first-quarter 2025 earnings results on April 30, after the market closes, investors are faced with a crucial decision: Should you add SFM to your portfolio, hold your position or sell the stock? Whether you're a long-term shareholder or a potential investor looking to capitalize on upcoming opportunities, assessing the stock’s potential ahead of its earnings release is key to making well-informed investment decisions.
Sprouts Farmers has been capitalizing on the growing demand for organic and natural products, positioning itself as a strong player in the grocery space. Analysts are optimistic about Sprouts Farmers' upcoming earnings.
The Zacks Consensus Estimate for first-quarter revenues stands at $2,191 million, which indicates an increase of 16.3% from the prior-year reported figure. On the earnings front, the consensus estimate has risen by a penny to $1.54 per share over the past seven days, implying a 37.5% year-over-year rise.
Sprouts Farmers has a trailing four-quarter earnings surprise of 15.1%, on average. In the last reported quarter, this Phoenix, AZ-based company surpassed the Zacks Consensus Estimate by a margin of 8.2%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
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What the Zacks Model Indicates for SFM’s Q1 Earnings
As investors prepare for Sprouts Farmers’ first-quarter results, the question looms regarding earnings beat or miss. Our proven model predicts an earnings beat for Sprouts Farmers this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sprouts Farmers has a Zacks Rank #2 and an Earnings ESP of +1.23%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Sprouts Farmers Market, Inc. Price, Consensus and EPS Surprise
Sprouts Farmers Market, Inc. price-consensus-eps-surprise-chart | Sprouts Farmers Market, Inc. Quote
Factors Shaping Sprouts Farmers' Q1 Outcome
Sprouts Farmers’ emphasis on product innovation, technology and targeted marketing, along with everyday competitive pricing, bodes well. The company has been steadily increasing its footprint in the natural and organic space, driven by strong demand in this segment. The introduction of unique and health-oriented products attracts a diverse customer base and drives sales growth.
From plant-based proteins to gluten-free snacks and keto-friendly foods, Sprouts Farmers ensures that its shelves are stocked with the latest and most sought-after health products. The company’s commitment to developing innovative products under its private label has resonated well with consumers, contributing to higher profit margins.
The factors mentioned above are likely to have favorably impacted the top line. We expect comparable store sales growth of 10.5% for the quarter under review.
Sprouts Farmers has made substantial investments in its digital infrastructure, resulting in a robust omnichannel shopping experience. The company reported impressive growth in e-commerce sales, which surged 37% in the fourth quarter of 2024. As consumers increasingly prefer shopping online for convenience, SFM’s commitment to enhancing its digital capabilities positions it to capture market share.
However, the company faces challenges in selling, general and administrative expenses (SG&A). We anticipate SG&A expenses to increase 12.7% year over year in the first quarter.