Short answer: Sprouts earnings disappointed: the grocer cut its 2026 profit forecast by about 10% at the midpoint after a third quarter in which sales at existing stores fell 0.9% and customer traffic dropped 3.3%. Its new outlook is about $4.80 in earnings per share, down from a range of $5.32 to $5.40, and the stock fell about 23%, according to Sprouts’ earnings filing and Yahoo Finance.
| Measure | Q3 2026 or 2026 outlook |
|---|---|
| Net sales | $2,304.7 million, up about 5% |
| Comparable store sales | Down 0.9% |
| Transactions at existing stores | Down 3.3% |
| Diluted EPS | $1.21 (analysts expected $1.23) |
| Gross margin | 38.2%, from 38.7% |
| 2026 EPS outlook | About $4.80 (was $5.32 to $5.40) |
| 2026 comparable sales outlook | About down 1.7% (was down 0.5% to up 0.5%) |
| Fourth-quarter comparable sales outlook | Down 2% to 4% |
What the Sprouts earnings show
Sprouts grew total sales by opening stores, not by selling more in the stores it already had. Net sales rose about 5% as it opened 15 new stores in the quarter, a record, according to Yahoo Finance. But sales at existing stores fell, and fewer shoppers came through the door. Net income slipped to $113.4 million from $120.1 million, and the gross margin slid half a point.
Through the first nine months, comparable sales are down 1.2% and diluted earnings are $4.30, about 2% lower than a year ago. Sprouts opened 28 new stores in that time and plans 42 net new stores this year, with about $310 million in capital spending.
Sprouts earnings of $1.21 per share missed the $1.23 analysts expected, Yahoo Finance reports. The miss was small. The outlook was not. Sprouts’ second-quarter release had forecast 2026 sales growth of 5.5% to 6.5% and EBIT of $675 million to $685 million. The new outlook calls for about 4.3% growth and about $605 million.
The cyclospora disruption behind the Sprouts outlook cut
Management pointed to the “cyclospora disruption” and a tough consumer. Chief Financial Officer Curtis Valentine said it cut comparable sales by about 0.6 percentage point in the quarter and raised shrink, which is food that is lost or thrown out. Sales improved through July, then softened in August and September, and they did not recover even as comparisons got easier. The filing does not mention the disruption, and reports do not say which products were affected.
A pricing problem, in management’s own words
The most telling comment came from Nick Konat, the president and chief operating officer who will become chief executive. He said that Sprouts’ efforts so far have not been enough and that its pricing strategy has not delivered. Jack Sinclair, the outgoing chief executive, will become executive chairman.
Sprouts plans to cut prices on healthy and holiday staples in the fourth quarter and launch a rebuilt national pricing strategy in January. Management says it is not broad discounting. Examples include wellness bowls under $10 and $29.99 family meals for four. Our look at consumer sentiment shows why shoppers are hunting for value.
How Wall Street reacted
Shares fell about 23% after the Sprouts earnings report. RBC and Bank of America downgraded the stock, with price targets of $49 and $47, Yahoo Finance reports. Sprouts expects fourth-quarter comparable sales to fall 2% to 4% and earnings of $0.47 to $0.51 per share. The extra week in this 53-week year should add about $190 million in sales and $0.16 per share, Sprouts says.
Editor’s take
Sprouts sells the idea that healthy food is worth more. That works until shoppers are watching every dollar, and the company’s incoming boss says its pricing has not worked. New stores are masking weaker traffic in the ones that already exist, and a price reset costs margin. The next two Sprouts earnings reports will show whether Sprouts can win shoppers back without giving up the healthy-food premium. For families, our Thanksgiving dinner cost guide shows where to save.
