Oct 29, 2026: a 52-week low at the open
Sprouts reported after the close on Oct 28 and held its call at 5pm ET. The first premarket trades at 4am were at $48.18, down 22.3%, and the stock slipped to $46.75 by 9:15am. It opened the regular session at $47.66, set its low of $47.35 in the first minutes, rallied to $50.90 at 9:45am and gave most of that back. At 12:04pm it was $48.32.
What happened:
- Traffic fell. Comparable transactions dropped 3.3% and the average basket rose 2.5%. Management said the biggest losses came from less engaged, somewhat lower income shoppers, and that core customers have also made fewer trips.
- The comp missed the company's own range. Comparable sales fell 0.9% against a guide of minus 0.5% to plus 1.5%. A cyclospora disruption took about 60 basis points off. Net sales rose 5% to $2.30 billion on new stores, below the analyst average of about $2.33 billion, and EPS was $1.21 against $1.23 expected.
- The guide came down. Fourth-quarter comps are now guided to minus 2% to minus 4% and EPS to $0.47 to $0.51, before the extra week. For the full year on a 52-week basis, EBIT is now about $605 million against $675 million to $685 million in July.
- The pricing reset. Incoming CEO Nick Konat said, "Our efforts to date have not been enough and our current pricing strategy has not delivered against that goal." Sprouts is cutting prices on staples now and plans a national rollout in January.
Other grocers mostly rose, so the market did not read this as a sector problem. From the Oct 28 close, at 12:04pm:
| Stock or fund | Oct 28 close | Oct 29, 12:04pm | Change |
|---|---|---|---|
| Walmart (WMT) | $118.77 | $121.12 | +2.0% |
| Consumer Staples Select SPDR (XLP) | $86.84 | $87.65 | +0.9% |
| Kroger (KR) | $65.02 | $65.55 | +0.8% |
| Albertsons (ACI) | $13.15 | $12.73 | -3.2% |
| Natural Grocers (NGVC) | $30.12 | $28.33 | -5.9% |
| Sprouts Farmers Market (SFM) | $62.00 | $48.32 | -22.1% |
Natural Grocers, the closest match in what it sells, fell about a quarter as much. After the drop, RSI(14) stood at 21, the shares sat 31% below their 50-day average and 37% below their 200-day average, and the stock was 54% below its 52-week high of $106.04.
The numbers behind the cut
The cut is about 10% at the EPS midpoint and 11% on EBIT. The fourth quarter carries most of it. CFO Curtis Valentine guided about 90 basis points of gross margin pressure from the price investment and about 170 basis points of SG&A pressure from fixed costs and higher store labor and benefits. Third-quarter gross margin was already down 50 basis points to 38.2%, on higher shrink and fuel costs. The 53rd week, which falls in the fourth quarter, adds about $190 million of sales, $20 million of EBIT and $0.16 of EPS, down from the $200 million, $28 million and $0.21 Sprouts expected in July. Our explainer on why guidance changes move stocks covers why the direction of a guide matters as much as its size.
The bull case: cheap, and still growing stores
- Valuation. At about $48, Sprouts trades near 10 times forward earnings, 0.5 times sales and 2.9 times book. Our guide to forward and trailing P/E explains why the forward number depends on estimates that may still fall.
- New stores work. Sprouts opened a record 15 stores in the quarter, ended with 504 in 25 states, still plans 42 net new stores in 2026, and said recent store classes post positive comps in their second to fourth years.
- Cash. It ended the quarter with $229 million in cash and nothing drawn on its $600 million revolving credit line, generated $555 million of operating cash in nine months, and has $537 million left on its buyback authorization.
The risks
- No 2027 guide. Valentine said, "we're not ready to guide for 2027 or speak to the comp." Analysts pressed on whether the fourth quarter is the low point for margins and how management can commit to a 5% EBIT floor.
- The price investment may not work. Earlier price tests improved item sales but were not broad enough to lift overall traffic, management said.
- A leadership change. Konat becomes CEO on January 4, the same month the new pricing rolls out. Sprouts also disclosed on Oct 14 that its chief technology officer stepped down.
- Short interest. About 13% of the float is sold short, which can make rallies sharp and short-lived. Our explainer on short interest and days to cover covers how to read that figure.
What comes next
Sprouts reports fourth-quarter results around February 18, 2027, with the first 2027 outlook and early data on the January pricing rollout. Our guide to preparing for an earnings catalyst covers what to check before that report. Until then, watch for any update on holiday traffic and for how far analysts cut their 2027 estimates. More of the day's swings are in today's biggest stock moves.