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- **Revenue Growth**: Q3 2025 revenue up 13% YoY to $2.2 billion, driven by 5.9% comp sales and 9 new stores.
- **Profitability**: EBIT of $157 million, EPS $1.22 (34% YoY growth), with gross margin improving 60 bps to 38.7%.
- **2025 Outlook**: Total sales +14%, comp +7%, EBIT $675-680M, EPS $5.24-5.28.
- **Q4 Guidance**: Comp 0-2%, EPS $0.86-0.90, stable margins despite top-line pressure.
- **Strategic Initiatives**: 37 new stores in 2025, 7,500 new products, self-distribution transition, and loyalty program rollout.
- **Challenges**: Lapping 2024's strong comps and softening consumer demand, particularly in middle-income and younger demographics.
- **Leverage**: Operating cash flow of $577M funded capex and $342M buybacks, with $966M remaining under $1B repurchase authorization.

**【CEO Summary Section】**
- Q3 2025 revenue grew 13% YoY to $2.2 billion, driven by 5.9% comp sales and 9 new store openings, ending the quarter with 464 stores.
- Gross margin improved 60 bps to 38.7%, primarily due to reduced shrink.
- EBIT of $157 million led to diluted EPS of $1.22, up 34% YoY.
- 2025 outlook: Total sales growth ~14%, comp sales ~7%, EBIT $675-680 million, EPS $5.24-5.28.
- Q4 2025 guidance: Comp sales 0-2%, EPS $0.86-0.90.
- New store pipeline expanded to 140 approved locations, targeting 37 openings in 2025.
- Self-distribution transition in fresh meat and seafood expected to complete Q2 2026.
- Sprouts brand now 25% of total sales, with 7,500 new products launched in 2025.
- Customer base expanded significantly in 2024, with ~80% retention in 2025.
- Loyalty program rolled out nationally, showing early signs of increased frequency and sales per customer.
- Facing headwinds from lapping strong 2024 comps and softening consumer demand, particularly in middle-income and younger demographics.

**【CFO Financial Commentary】**
- Total sales growth of 13% YoY ($2.2 billion) driven by 5.9% comp and new stores.
- EBIT margin expanded due to cost control, with SG&A up 13% but 13 bps leverage.
- Operating cash flow of $577 million funded $194 million in capex and $342 million in share buybacks.
- $1 billion share repurchase authorization remaining balance of $966 million.
- 2025 capex guidance: $230-250 million.
- Q4 2025 EBIT expected to grow in line with sales, maintaining stable margins despite 0-2% comp.

**【Q&A Highlights】**
- **Competition & Consumer Softness**: Lapping 2024's strong comps (e.g., 13% October 2024) and macro consumer pressure led to Q3 miss. Strategy focuses on differentiation (7,500 new products), store expansion, and loyalty program to retain customers.
- **New Store Performance**: 2025 openings (37) outperforming expectations, with 2026+ pipeline strong. Self-distribution transition improving in-stocks and margins.
- **Promotional Strategy**: No shift to price promotions; focus remains on quality, innovation, and health attributes. SNAP exposure minimal (~2-3%).
- **Loyalty Program**: Early success in increasing customer engagement, with plans to leverage data for personalized marketing in 2026.
- **Supply Chain**: Transitioning to self-distribution in meat and seafood to mitigate third-party disruptions, with Northern California DC opening Q2 2026.
- **2026 Outlook**: Challenging first half due to lapping double-digit 2025 comps, but innovation pipeline and store openings expected to drive recovery in second half.

Sprouts Farmers Market, Inc. (SFM) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

SFM

SFM fundamentals

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