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Investing.com - UBS lowered its price target on Sprouts Farmers Market (NASDAQ:SFM) to $180.00 from $182.00 on Thursday, while maintaining a Neutral rating on the stock. According to InvestingPro data, SFM has delivered impressive returns with a 58.23% gain over the past year, though current analysis suggests the stock may be trading above its Fair Value.
The grocery chain posted stronger-than-expected second-quarter results, with same-store sales growth of 10.2%, exceeding both analyst estimates of 9.0% and consensus expectations of 8.5%. This represented a 120 basis point sequential acceleration to 16.9% on a two-year stack basis. The company’s overall revenue growth stands at 15.51% over the last twelve months, with InvestingPro analysis showing strong financial health metrics.
Sprouts benefited from supply disruptions at United Natural Foods Inc. (NYSE:UNFI) during May and June, as the company primarily uses KeHE as its distributor rather than UNFI, which serves many competitors. Since that period, same-store sales have settled into what UBS described as "the still quite strong ~15% monthly 2-year stack range" quarter-to-date.
The company’s gross margin improved by 90 basis points year-over-year, surpassing consensus expectations of 60 basis points, driven by inventory and category management improvements. Selling, general and administrative expenses also decreased as a percentage of sales due to the double-digit comparable store sales growth.
These factors contributed to Sprouts reporting earnings per share of $1.35, exceeding both UBS’s estimate of $1.25 and the consensus forecast of $1.24. With a gross profit margin of 38.72% and multiple positive indicators, InvestingPro subscribers can access 12 additional key insights about SFM’s financial performance and outlook in the comprehensive Pro Research Report.
In other recent news, Sprouts Farmers Market reported robust second-quarter results for 2025, surpassing analysts’ expectations. The company achieved an earnings per share of $1.35, exceeding the forecast of $1.23, and recorded revenue of $2.2 billion, which was higher than the anticipated $2.17 billion. This performance highlights Sprouts’ strong market presence and operational efficiency. Barclays (LON:BARC) upgraded Sprouts Farmers Market’s stock rating from Equalweight to Overweight, reflecting confidence in the company’s growth prospects. The firm raised its price target to $185.00, citing the potential for sales growth driven by Sprouts’ loyalty program and e-commerce operations. Meanwhile, BMO Capital adjusted its price target for Sprouts to $170.00, maintaining a Market Perform rating. This adjustment followed Sprouts’ quarterly report, which showed a 10% growth in comparable sales and a greater-than-expected expansion in gross margins. These developments underscore Sprouts Farmers Market’s ongoing strategic initiatives and market dynamics.
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