Dive Brief:
- Sprouts Farmers Market’s first quarter of 2026 results “played out largely as expected,” CEO Jack Sinclair told investors Wednesday, as the company works to course-correct after a lackluster close to 2025.
- The specialty grocer reported a net sales increase of 4% to $2.3 billion, largely due to new store performance. But net sales were offset by a 1.7% decline in comparable-store sales, CFO Curtis Valentine said.
- Sprouts has begun making “selective price adjustments” to its most relevant items in an effort to improve its image as an affordable option for shoppers, Valentine told investors.
Dive Insight:
Sprouts’ Q1 earnings were mixed, and the company has outlined muted expectations for its full-year results — but that hasn’t deterred the specialty grocer from continuing its ambitious growth plans, from new store growth to building out its self-distribution network.
A big part of achieving those growth plans is addressing an affordability issue that has challenged the grocer recently.
During Q1, the company made an initial price reduction on a small number of SKUs, like coffee and other essential goods, Sinclair said, adding that Sprouts is also reshaping its promotional plan to be more streamlined and targeted in a bid to drive greater value.
Sprouts’ loyalty program, which launched chainwide in October, is continuing to scale and receive positive customer feedback, Sinclair said.
Sprouts’ market reach continues to expand through both new stores and its developing self-distribution network. The grocer opened six new stores in Q1 and remains confident that it will debut at least 40 stores by 2026’s close. Currently, Sprouts has nearly 150 new locations approved and more than 105 executive leases, Sinclair said.
As part of its meat self-distribution work, Sprouts plans to open a Northern California distribution center in Q2, according to Sinclair.
E-commerce recorded strong performance for Sprouts in Q1, growing 10% and representing around 16% of total sales for the quarter, Valentine said.
While Sprouts remains confident that year-over-year comparisons for its fiscal 2026 outlook will continue to improve in the back half of the year, Valentine said, the company still expects comp-store sales for fiscal 2026 to fall between -1% and 1%.
