Sprouts Farmers Market saw gross margin increase in Q1 2025, but expects slower growth in Q2.

From Zacks Investment Research: 2025-06-24 12:44:00

Sprouts Farmers Market (SFM) saw a Q1 2025 gross margin increase of 129 bps, hitting 39.6%. The company credits this to improved inventory and shrink leverage. However, SFM expects margin growth to slow in Q2 due to tougher comps. Despite a higher valuation, SFM stock is up 36.4% YTD, outperforming the industry. Walmart (WMT) reported a 25 bps gross margin increase in Q1 2026, driven by disciplined inventory management and e-commerce growth. Dollar General (DG) saw a 78 bps gross margin expansion in Q1 2025, but faces pressure from tariffs. SFM forecasts continued EBIT margin growth and plans to self-distribute fresh meat and seafood. Analysts project a 13.7% sales and 35.5% EPS growth for SFM this year.



Read more at Zacks Investment Research: Has Sprouts Farmers Market’s Gross Margin Expansion Peaked? – June 24, 2025