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Sprouts Farmers Market Inc. SFM has been one of the top performers in the grocery space, posting a 20.7% year-to-date gain. The company continues to benefit from shifting consumer preferences toward healthier food choices, backed by solid fundamentals and evolving strategic initiatives. However, with the stock already on a strong upward trajectory, investors are now faced with a key question — does SFM still offer upside, or is it time to lock in gains?
SFM has comfortably outpaced the Zacks Food-Natural Foods Products industry’s rise of 9.7%. Sprouts Farmers’ unmatched scale and operational capabilities have also helped it outperform the broader Retail and Wholesale sector and the S&P 500 index, which posted respective declines of 1.4% and 4.1%.
SFM Stock YTD Performance
Image Source: Zacks Investment Research
Sprouts Farmers has even outperformed its peers such as Farmer Bros. Co. FARM, SpartanNash Company SPTN and Performance Food Group Company PFGC. While shares of Farmer Bros. and SpartanNash have risen 13.8% and 12.2%, respectively, so far in the year, shares of Performance Food have declined 10.1%.
Closing yesterday’s trading session at $153.28, shares of Sprouts Farmers are currently trading below its 52-week high of $178.99 attained on Feb. 18, 2025. Technical indicators are supportive of Sprouts Farmers’ strong performance. The stock is trading above both its 50-day and 200-day moving averages, indicating robust upward momentum and price stability.
SFM Stock Trades Above 50-Day Moving Average
Image Source: Zacks Investment Research
Decoding Potential Tailwinds Behind SFM’s Rally
Sprouts Farmers has steadily grown its presence in the natural and organic grocery segment by aligning its offerings with evolving consumer trends. Its focus on fresh produce and better-for-you products continues to resonate with health-conscious shoppers seeking clean-label and sustainable options.
The company's shelves reflect a curated mix of modern dietary preferences — from plant-based and gluten-free to keto-friendly alternatives — ensuring broader consumer appeal. Sprouts Farmers' expanding private label line has been a key growth driver. Notably, Sprouts-branded products contributed 23% of total sales in the final quarter of 2024. The company also introduced more than 7,000 new products last year, including more than 300 items under its house brand, such as grass-fed meatballs, organic pasture-raised eggs and premium beauty products.
Sprouts Farmers is actively pursuing store expansion, targeting areas with high growth potential. The company opened 33 new stores in 2024, expanding into Wyoming as its 24th state. Management expects at least 35 new stores in 2025. With 110 approved new locations and 70 executed leases, Sprouts Farmers is well-positioned for long-term geographic expansion, particularly in the Midwest and Northeast.
On the digitization front, the company has invested heavily in its e-commerce infrastructure and forged partnerships with Uber Eats, DoorDash, and Instacart to extend its digital reach. The fourth quarter witnessed a remarkable 37% surge in e-commerce sales, constituting 14.5% of total sales. The company's e-commerce business surpassed $1 billion in sales in 2024.