Sprouts Farmers Market, Inc 10-Q for FY2026 Q3
Sprouts Farmers Market, Inc. (SFM)
10-Q
2026-10-28
For: 2026-09-27
View Original
Added on
October 28, 2026
About this 10-Q
Sprouts Farmers Market, Inc filed this 10-Q on October 28, 2026, covering the quarter ended September 27, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 27, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.3B
- up 4.7% from $2.2B a year earlier
- Net income
- $113.42M
- down 5.6% from net income of $120.12M a year earlier
- Diluted EPS
- $1.21
- down 0.8% from $1.22 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 27, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-36029
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices and zip code)
(480 ) 814-8016
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated filer | o | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of October 26, 2026, the registrant had 92,232,635 shares of common stock, $0.001 par value per share, outstanding.
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 27, 2026
TABLE OF CONTENTS
| Page | ||||||||||||||||||||
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, but not limited to, statements regarding our expectations, beliefs, intentions, strategies, future operations, future financial position, future revenue, projected expenses, and plans and objectives of management. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “continue,” “objective,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements reflect our current views and beliefs about future events and involve known risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievement to be materially different from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” included in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the fiscal year ended December 28, 2025, and our other filings with the Securities and Exchange Commission. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to the “Company,” “Sprouts,” “Sprouts Farmers Market,” “we,” “us” and “our” refer to Sprouts Farmers Market, Inc. and, where appropriate, its subsidiaries.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| September 27, 2026 | December 28, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net of accumulated depreciation | |||||||||||
| Operating lease assets, net | |||||||||||
| Intangible assets | |||||||||||
| Goodwill | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued liabilities | |||||||||||
| Accrued salaries and benefits | |||||||||||
| Current portion of operating lease liabilities | |||||||||||
| Current portion of finance lease and other finance obligations | |||||||||||
| Total current liabilities | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Long-term debt and other finance obligations | |||||||||||
| Other long-term liabilities | |||||||||||
| Deferred income tax liability | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 6) | |||||||||||
| Stockholders’ equity: | |||||||||||
Undesignated preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Depreciation and amortization (exclusive of depreciation included in cost of sales) | |||||||||||||||||||||||
| Store closure and other costs/(credits), net | ( | ||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
| Interest expense/(income), net | ( | ( | |||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Net income per share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
For the thirteen and thirty-nine weeks ended September 27, 2026
| Shares | Common Stock | Additional Paid In Capital | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||
| Balances at June 28, 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Issuance of shares under stock plans | — | — | |||||||||||||||||||||||||||
| Repurchase and retirement of common stock, including excise tax | ( | ( | — | ( | ( | ||||||||||||||||||||||||
| Share-based compensation | — | — | — | ||||||||||||||||||||||||||
| Balances at September 27, 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Shares | Common Stock | Additional Paid In Capital | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||
| Balances at December 28, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Issuance of shares under stock plans | — | ||||||||||||||||||||||||||||
| Repurchase and retirement of common stock, including excise tax | ( | ( | — | ( | ( | ||||||||||||||||||||||||
| Share-based compensation | — | — | — | ||||||||||||||||||||||||||
| Balances at September 27, 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||
For the thirteen and thirty-nine weeks ended September 28, 2025
| Shares | Common Stock | Additional Paid In Capital | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
| Balances at June 29, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Issuance of shares under stock plans | — | — | |||||||||||||||||||||||||||||||||
| Repurchase and retirement of common stock, including excise tax | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Balances at September 28, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Shares | Common Stock | Additional Paid In Capital | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
| Balances at December 29, 2024 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Issuance of shares under stock plans | — | ||||||||||||||||||||||||||||||||||
| Repurchase and retirement of common stock, including excise tax | ( | ( | — | ( | ( | ||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Balances at September 28, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
| Thirty-nine weeks ended | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
| Operating activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization expense | |||||||||||
| Operating lease asset amortization | |||||||||||
| Share-based compensation | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Other non-cash items | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | |||||||||||
| Inventories | ( | ( | |||||||||
| Prepaid expenses and other current assets | |||||||||||
| Other assets | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Accrued liabilities | ( | ||||||||||
| Accrued salaries and benefits | ( | ( | |||||||||
| Accrued income tax | |||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Other long-term liabilities | |||||||||||
| Cash flows provided by operating activities | |||||||||||
| Investing activities | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Cash flows used in investing activities | ( | ( | |||||||||
| Financing activities | |||||||||||
| Payments on finance lease liabilities | ( | ( | |||||||||
| Repurchase of common stock | ( | ( | |||||||||
| Payments of excise tax on repurchases of common stock | ( | ( | |||||||||
| Proceeds from exercise of stock options | |||||||||||
| Other financing activities | |||||||||||
| Cash flows used in financing activities | ( | ( | |||||||||
| (Decrease)/increase in cash, cash equivalents, and restricted cash | ( | ||||||||||
| Cash, cash equivalents, and restricted cash at beginning of the period | |||||||||||
| Cash, cash equivalents, and restricted cash at the end of the period | $ | $ | |||||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for income taxes | |||||||||||
| Supplemental disclosure of non-cash activities | |||||||||||
| Property and equipment in accounts payable and accrued liabilities | $ | $ | |||||||||
| Leased assets obtained in exchange for new operating lease liabilities, net of lease terminations | |||||||||||
| Property acquired through finance obligations | |||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
Sprouts Farmers Market, Inc., a Delaware corporation, through its subsidiaries, offers a unique specialty grocery experience featuring an open layout with fresh produce at the heart of the store. The Company continues to bring the latest in wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based and gluten-free. As of September 27, 2026, the Company operated 504 stores in 25 states. For convenience, the “Company” is used to refer collectively to Sprouts Farmers Market, Inc. and unless the context otherwise requires, its subsidiaries. The Company’s store operations are conducted by its subsidiaries.
The year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP.
The Company reports its results of operations on a 52- or 53-week fiscal calendar ending on the Sunday closest to December 31. The fiscal year ending January 3, 2027 (“fiscal year 2026”) is a 53-week year, and fiscal year 2025 is a 52-week year. The Company reports its results of operations on a 13-week quarter, except for 53-week fiscal years (in which the fourth quarter has 14 weeks).
All dollar amounts are in thousands, unless otherwise noted.
8
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2. Summary of Significant Accounting Policies
Revenue Recognition
The Company’s performance obligations are satisfied upon the transfer of goods to the customer, which occurs at the point of sale, and payment from customers is also due at the time of sale. Proceeds from the sale of gift cards are recorded as a liability at the time of sale and recognized as sales when they are redeemed by the customer, and the performance obligation is satisfied by the Company. The Company’s gift cards do not expire. Based on historical redemption rates, a small and relatively stable percentage of gift cards will never be redeemed, referred to as "breakage." Estimated breakage revenue is recognized over time in proportion to actual gift card redemptions and was not material in any period presented. The outstanding gift card liability balance is included within accrued liabilities on the Company's consolidated balance sheets.
Beginning in July 2025, the Company implemented a customer loyalty program under which customers earn points on qualifying purchases. Points may be redeemed in future periods for rewards to be used for discounts on the Company's products. The loyalty points represent a material right to the customer and are accounted for as a separate performance obligation. At the time of purchase, the Company allocates a portion of the transaction price to a deferred loyalty liability based on the products' estimated standalone selling price, net of estimated breakage. Revenue allocated to the points is deferred and recognized when the points are redeemed or expire. Points expire approximately 6 months after issuance, and points that have been converted to rewards expire 60 days following conversion. The outstanding liability balance at period end, which the Company classifies as a current liability due to the short expiration period, is included within accrued liabilities on the Company's consolidated balance sheets.
A summary of the activity and balances in the gift card and loyalty program liabilities is as follows:
| Thirty-nine weeks ended | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
| Beginning Balance | $ | $ | |||||||||
Gift cards issued during the period but not redeemed(1) | |||||||||||
Loyalty value deferred during the period, net of amount redeemed or expired(1) | |||||||||||
Revenue recognized from beginning liability(2) | ( | ( | |||||||||
| Ending Balance | $ | $ | |||||||||
(1)Net of estimated breakage
(2)Increase primarily attributable to the Company's 2025 loyalty program implementation and program growth
The nature of goods the Company transfers to customers at the point of sale are inventories, consisting of merchandise purchased for resale.
The Company does not have any material contract assets or receivables from contracts with customers, any revenue recognized in the current period from performance obligations satisfied in previous periods, any contract performance obligations, or any material costs to obtain or fulfill a contract as of September 27, 2026.
Restricted Cash
Restricted cash primarily relates to the Company's healthcare, general liability and workers’ compensation plan benefits of $2.6 million and $3.6 million as of September 27, 2026 and December 28, 2025, respectively. These balances are included in prepaid expenses and other current assets in the consolidated balance sheets.
9
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Recently Issued Accounting Pronouncements Not Yet Adopted
Disaggregation of Income Statement Expenses
In November 2024, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") no. 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses". The standard requires public entities to disclose additional disaggregation of expense in the notes to the financial statements for interim and annual reporting periods. The guidance is effective for the Company for its fiscal year 2027. Early adoption is permitted, and the guidance should be applied prospectively, with an option to apply it retrospectively. The Company is currently evaluating the potential impact of this ASU on its consolidated financial statements and disclosures.
Intangibles—Goodwill and Other—Internal-Use Software
In September 2025, the FASB issued ASU no. 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)". The standard clarifies and modernizes the accounting for costs related to the internal-use software in Accounting Standards Codification ("ASC") 350-40. The guidance removes all references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. The guidance is effective for the Company for its fiscal year 2028. Early adoption is permitted, as of the beginning of an annual reporting period. The Company is currently evaluating the potential impact of this ASU on its consolidated financial statements and disclosures.
Interim Reporting (Topic 270) - Narrow Scope Improvements
In December 2025, the FASB issued ASU no. 2025-11, "Interim Reporting (Topic 270) - Narrow Scope Improvements". The standard clarifies the interim reporting requirements by improving navigability of Topic 270 and more clearly specifying what disclosures are required in an interim reporting period. It is not intended to significantly change interim reporting or expand or reduce interim disclosure requirements. The guidance is effective for the Company for its interim reporting period beginning in its fiscal year 2028. Early adoption is permitted, and the guidance can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the potential impact of this ASU on its consolidated financial statements and disclosures.
No other new accounting pronouncements issued or effective during the thirty-nine weeks ended September 27, 2026 had, or are expected to have, a material impact on the Company’s consolidated financial statements.
3. Fair Value Measurements
The Company records its financial assets and liabilities in accordance with the framework for measuring fair value in accordance with GAAP. This framework establishes a fair value hierarchy that prioritizes the inputs used to measure fair value:
Level 1: Quoted prices for identical instruments in active markets.
Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Fair value measurements of nonfinancial assets and nonfinancial liabilities are primarily used in the impairment analysis of goodwill, intangible assets and long-lived assets.
10
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The Company did no
The determination of fair values of certain tangible and intangible assets for purposes of the Company’s goodwill or long-lived asset impairment evaluation is based upon Level 3 inputs. When necessary, the Company uses third-party market data and market participant assumptions to derive the fair value of its asset groupings, which primarily include right-of-use lease assets and property and equipment.
4. Long-Term Debt and Other Finance Obligations
A summary of long-term debt and other finance obligations is as follows:
| As of | ||||||||||||||||||||||||||
| Facility | Maturity | Interest Rate | September 27, 2026 | December 28, 2025 | ||||||||||||||||||||||
| Senior secured debt | ||||||||||||||||||||||||||
$ | July 25, 2030 | Variable | ||||||||||||||||||||||||
Former Credit Facility(1) | March 25, 2027 | Variable | $ | $ | ||||||||||||||||||||||
| Finance Obligations | September 30, 2036 | n/a | ||||||||||||||||||||||||
| Finance lease liabilities | Various | n/a | ||||||||||||||||||||||||
| Long-term debt and other finance obligations | $ | $ | ||||||||||||||||||||||||
(1)The Former Credit Facility (as defined below) was replaced by the $600.0 million Credit Agreement as discussed below.
Credit Agreement
The Company’s subsidiary, Sprouts Farmers Markets Holdings, LLC (“Intermediate Holdings”), is the borrower under a credit agreement entered into on July 25, 2025 (the “Credit Agreement”), by and among the
Company, Intermediate Holdings, certain lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent. The Credit Agreement provides for a senior secured revolving credit facility (the "Revolving Credit Facility") with an initial aggregate commitment of $600.0 million. Amounts outstanding under the Credit Agreement may be increased from time to time in accordance with an expansion feature set forth in the Credit Agreement.
The Company capitalized debt issuance costs of $1.6 million related to the Credit Agreement, which, combined with the remaining $1.1 million debt issuance costs in respect of that certain credit agreement entered into on March 25, 2022 (the “Former Credit Facility”), by and among the Company, Intermediate Holdings, certain lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent, which remained outstanding as of the time of Intermediate Holdings’ entry into the Credit Agreement, are being amortized on a straight-line basis to interest expense over the five-year term of the Credit Agreement.
The Credit Agreement provides for a $100.0 million letter of credit sub-facility (the "Letter of Credit Sub-Facility") and a $50.0 million swingline facility. Letters of credit issued under the Credit Agreement reduce the capacity of Intermediate Holdings to borrow under the Revolving Credit Facility. Letters of credit totaling $22.0 million have been issued as of September 27, 2026 under the Letter of Credit Sub-Facility, primarily to support the Company’s insurance programs.
Guarantees
Obligations under the Credit Agreement are guaranteed by the Company and substantially all of its existing and future wholly-owned material domestic subsidiaries, and are secured by first-priority security
11
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
interests in substantially all of the assets of the Company, Intermediate Holdings, and the subsidiary guarantors, including, without limitation, a pledge by the Company of its equity interest in Intermediate Holdings.
Interest and Fees
Loans under the Credit Agreement will initially bear interest, at the Company's option, either at the Term SOFR (as defined in the Credit Agreement) (with a floor of 0.00 %) plus 1.00 % per annum or alternate base rate (with a floor of 0.00 %) plus 0.00 % per annum. The interest rate margins are subject to upward adjustments pursuant to a pricing grid based on the Company’s total net leverage ratio as set forth in the Credit Agreement and to upward or downward adjustments of up to 0.05 % based upon the achievement of certain sustainability-linked metric thresholds, as set forth in the Credit Agreement.
Under the terms of the Credit Agreement, the Company is obligated to pay a commitment fee on the available unused amount of the commitments, which commitment fee ranges from 0.09 % to 0.225 % per annum, pursuant to a pricing grid based on the Company’s total net leverage ratio. The commitment fees are subject to upward or downward adjustments of up to 0.01 % based upon the achievement of certain sustainability-linked metric thresholds, as set forth in the Credit Agreement.
As of September 27, 2026, any loans outstanding under the Credit Agreement would have borne interest at Term SOFR plus 0.95 % per annum. The Company had no loans outstanding under the Credit Agreement as of September 27, 2026.
As of September 27, 2026, outstanding letters of credit issued under the Credit Agreement were subject to a participation fee of 0.95 % per annum and a fronting fee of 0.125 % per annum.
Payments and Borrowings
The Credit Agreement is scheduled to mature, and the commitments thereunder will terminate on July 25, 2030, subject to extensions as set forth therein.
The Company may prepay loans and permanently reduce commitments under the Credit Agreement at any time in agreed-upon minimum principal amounts, without premium or penalty (except SOFR breakage costs, if applicable).
During the thirteen and thirty-nine weeks ended September 27, 2026, the Company made no no outstanding debt under the Credit Agreement as of September 27, 2026. During 2025, the Company made no additional borrowings and had no outstanding debt under the Credit Agreement or the Former Credit Facility as of December 28, 2025.
Covenants
The Credit Agreement contains financial, affirmative and negative covenants. The negative covenants include, among other things, limitations on the Company’s ability to:
•incur additional indebtedness;
•grant additional liens;
•enter into sale-leaseback transactions;
•make loans or investments;
•merge, consolidate or enter into acquisitions;
•pay dividends or distributions;
•enter into transactions with affiliates;
•enter into new lines of business;
•modify the terms of certain debt or other material agreements; and
12
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
•change its fiscal year.
Each of these covenants is subject to customary and other agreed-upon exceptions.
In addition, the Credit Agreement requires that the Company and its subsidiaries maintain a maximum total net leverage ratio not to exceed 3.75 to 1.00, which ratio may be increased from time to time in connection with certain permitted acquisitions pursuant to conditions as set forth in the Credit Agreement, and a minimum interest coverage ratio not to be less than 3.00 to 1.00. Each of these covenants is tested as of the last day of each fiscal quarter.
The Company was in compliance with all applicable covenants under the Credit Agreement as of September 27, 2026.
Finance Obligations
On April 24, 2025, the Company executed a real estate lease for a new corporate headquarters campus and store location that has since commenced. The initial term of the lease is 10 years, and the total non-cancellable lease payments are $105.3 million. These payments have been allocated to the building and land components based on the relative standalone fair value. In addition, the lease includes a renewal option for a period of 10 years. Monthly payments commence on completion of construction, increase annually by a nominal amount, and continue through the end of the initial term. Based on certain criteria and the existence of a purchase option, the Company had been determined to be the owner during the construction period under ASC 842. Further, there is no evidence of an accounting sale to the landlord upon construction completion, which precludes sale-leaseback accounting. As a result, the building assets and corresponding financial obligation will remain on the Company’s balance sheet and will be amortized over the life of the underlying building asset. As of September 27, 2026, the Company has recorded $118.6
5. Income Taxes
The Company’s effective tax rate increased to 25.1 % for the thirteen weeks ended September 27, 2026, compared to 24.0 % for the thirteen weeks ended September 28, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for transferable tax credits, a reduction in the benefit of federal tax credits, and a reduction in the benefit for share-based compensation in the current year, partially offset by a decrease in non-deductible executive compensation. The income tax effect resulting from excess tax benefits of share-based payment awards was $1.1 million and $1.3 million for the thirteen weeks ended September 27, 2026 and September 28, 2025, respectively.
The Company’s effective tax rate increased to 24.9 % for the thirty-nine weeks ended September 27, 2026, compared to 23.2 % for the thirty-nine weeks ended September 28, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for share-based compensation, a reduction in the benefit for transferable tax credits, and a reduction in the benefit of federal tax credits in the current year partially offset by a decrease in non-deductible executive compensation. The income tax effect resulting from excess tax benefits of share-based payment awards was $5.7 million and $15.7 million for the thirty-nine weeks ended September 27, 2026 and September 28, 2025, respectively.
13
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
6. Commitments and Contingencies
The Company is exposed to claims and litigation matters arising in the ordinary course of business and uses various methods to resolve these matters that are believed to best serve the interests of the Company’s stakeholders. The Company’s primary contingencies are associated with self-insurance obligations and litigation matters. Self-insurance liabilities require significant judgment and actual claim settlements and associated expenses may differ from the Company’s current provisions for loss. The Company records an accrual for legal contingencies when it determines that it is probable that the Company has incurred a liability and can reasonably estimate the amount of the loss. However, predicting the outcomes of legal matters involves substantial uncertainties. While management currently believes that estimated liabilities recorded are reasonable and not material to the Company, differences in actual outcomes or changes in management's evaluation of estimated liabilities could arise that could be material to the Company's results of operations.
Litigation
Harvest Sherwood
In February 2025, the Company terminated its agreement with Harvest Sherwood Food Distributors, Inc. (“Harvest Sherwood”) for the distribution of certain meat and seafood products to the Company due to, among other things, Harvest Sherwood’s failure to pay the Company’s vendors for these products. Subsequently, on February 24, 2025, Harvest Sherwood filed a complaint against the Company in the Superior Court for the State of Delaware alleging breach of contract among other claims and seeking monetary damages of approximately $42.0 million. On March 6, 2025, the Company filed an answer and counterclaims against Harvest Sherwood, asserting its defenses to the complaint and its claims against Harvest Sherwood for breach of contract, negligent misrepresentation and unjust enrichment, among others, and seeking monetary damages of approximately $65.0 million. On May 5, 2025, Harvest Sherwood filed a petition for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Northern District of Texas (the "Bankruptcy Court") and filed a substantially similar adversary proceeding against the Company in the Bankruptcy Court. As a result, the Company's litigation against Harvest Sherwood was stayed in the Superior Court for the State of Delaware. In June 2026, the Company and Harvest Sherwood agreed in principle to a settlement of all pending litigation and release of claims against each other in exchange for payment of an immaterial amount by the Company to Harvest Sherwood. The settlement was approved by the Bankruptcy Court on July 27, 2026, and the Company paid Harvest Sherwood the agreed-upon settlement amount in August 2026. Following this settlement, the parties jointly dismissed the claims asserted against each other in the Superior Court for the State of Delaware.
Stockholder Actions
On November 24, 2025, a complaint was filed in the United States District Court for the District of Arizona (the "District Court") against the Company and certain of its officers by Singh Family Revocable Trust u/a dtd 02/18/2019 on behalf of a purported class of the Company's stockholders. The complaint purports to assert claims under Sections 10 and 20 of the Securities Exchange Act of 1934, as amended, based on allegedly false and misleading statements made by certain of the Company's officers regarding the resilience of its customers against macroeconomic pressures. The complaint seeks damages on behalf of the purported class in an unspecified amount and an award of reasonable costs and attorneys’ fees. On September 4, 2026, the District Court appointed stockholder Peter Robinson as the lead plaintiff in this matter. The parties agreed to, and the District Court subsequently ordered, a November 10, 2026 deadline for the lead plaintiff to file an amended complaint.
On December 16, 2025, stockholder Fraser MacDonald filed a separate complaint in the District Court, purporting to assert derivatively on behalf of the Company claims under federal and state law against nine of the Company’s directors and officers. This complaint echoes many of the substantive allegations in the Singh Family Revocable Trust securities class action and, in addition to unspecified damages and attorneys’ fees, seeks corporate governance reforms by the Company. On January 9, 2026, another complaint was filed by stockholder Richard Kaiser in the District Court, asserting similar claims against the same nine directors and officers on similar grounds. On February 6, 2026, the District Court issued an order consolidating the two derivative actions under the caption MacDonald v. Sinclair, et al., No. CV-25-04723-PHX-DWL (D. Ariz.). On April 21, 2026, the Court granted the defendants’ unopposed motion to stay the consolidated case pending resolution of the Singh Family Revocable Trust securities class action. The case is presently stayed accordingly.
14
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The Company and its executives intend to defend these cases vigorously, but at this stage of the proceedings, the Company is unable to predict or reasonably estimate any potential loss or effect on the Company. Accordingly, no loss contingency was recorded for these actions.
7. Stockholders’ Equity
Share Repurchases
On August 13, 2025, the Company's board of directors (the "Board") authorized a new $1 billion share repurchase program for its common stock. The new authorization replaced the Company's then-existing share repurchase authorization of $600 million that was due to expire on May 22, 2027, of which $142.6 million remained available upon its replacement, and under which no further shares may be repurchased. The new repurchase authorization does not have an expiration date; however, the Board expects to periodically review the authorization to assess its continued appropriateness in light of the Company's capital allocation priorities, market conditions, alternative investment opportunities, and other factors. The following table outlines the common stock share repurchase programs authorized by the Board and the related repurchase activity and available authorization as of September 27, 2026:
| Effective date | Expiration date | Amount authorized | Cost of repurchases | Authorization available | ||||||||||||||||||||||
| May 22, 2024 | May 22, 2027 | $ | $ | $ | ||||||||||||||||||||||
| August 13, 2025 | N/A | $ | $ | $ | ||||||||||||||||||||||
The shares under the Company’s current repurchase program may be purchased on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. The Board’s authorization of the share repurchase program does not obligate the Company to acquire any particular amount of common stock, and the repurchase program may be commenced, suspended, or discontinued at any time.
Share repurchase activity under the Company’s repurchase programs for the periods indicated was as follows (total cost in thousands):
| Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Number of common shares acquired | |||||||||||||||||||||||
| Average price per common share acquired | $ | $ | $ | $ | |||||||||||||||||||
| Total cost of common shares acquired | $ | $ | $ | $ | |||||||||||||||||||
Shares purchased under the Company’s repurchase programs were subsequently retired and the excess of the repurchase price over par value was charged to retained earnings. The cost of common shares repurchased included the 1% excise tax imposed as part of the Inflation Reduction Act of 2022.
Subsequent to September 27, 2026 and through October 26, 2026, the Company repurchased an additional 0.5 million shares of common stock for $30.0 million, excluding excise tax.
8. Net Income Per Share
The computation of basic net income per share is based on the number of weighted average shares outstanding during the period. The computation of diluted net income per share includes the dilutive effect of share equivalents consisting of incremental shares deemed outstanding from the assumed exercise of options and unvested restricted stock units ("RSUs"). Performance share awards ("PSAs") are included in the computation of diluted net income per share only to the extent that the underlying performance conditions are
15
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
satisfied prior to the end of the reporting period or would be satisfied if the end of the reporting period were the end of the related performance period, and if the effect would be dilutive.
A reconciliation of the numerators and denominators of the basic and diluted net income per share calculations is as follows (in thousands, except per share amounts):
| Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Basic net income per share: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares outstanding - basic | |||||||||||||||||||||||
| Basic net income per share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted net income per share: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares outstanding - basic | |||||||||||||||||||||||
| Dilutive effect of share-based awards: | |||||||||||||||||||||||
| Assumed exercise of options to purchase shares | |||||||||||||||||||||||
| RSUs | |||||||||||||||||||||||
| PSAs | |||||||||||||||||||||||
| Weighted average shares and equivalent shares outstanding - diluted | |||||||||||||||||||||||
| Diluted net income per share | $ | $ | $ | $ | |||||||||||||||||||
For the thirteen weeks ended September 27, 2026, the Company had 0.2 million options, 0.1 million RSUs and 0.1 million PSAs outstanding, which were excluded from the computation of diluted net income per share as those awards would have been antidilutive or were performance awards with performance conditions not yet deemed met. For the thirteen weeks ended September 28, 2025, the Company had 0.1 million options and 0.2 million PSAs outstanding, which were excluded from the computation of diluted net income per share as those awards would have been antidilutive or were performance awards with performance conditions not yet deemed met.
For the thirty-nine weeks ended September 27, 2026, the Company had 0.1 million options, 0.1 million RSUs and 0.1 million PSAs outstanding, which were excluded from the computation of diluted net income per share as those awards would have been antidilutive or were performance awards with performance conditions not yet deemed met. For the thirty-nine weeks ended September 28, 2025, the Company had 0.1 million options and 0.2 million PSAs outstanding, which were excluded from the computation of diluted net income per share as those awards would have been antidilutive or were performance awards with performance conditions not yet deemed met.
9. Segments
The Company has one operating segment and, therefore, one reportable segment: healthy grocery stores. The Company derives all its revenues from the sale of products at its various store locations across the United States. The accounting policies of the segment are the same as described in the summary of significant accounting policies. The Company’s chief operating decision maker (“CODM”) is the chief executive officer. The CODM assesses performance and allocates resources based on consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets.
The following table represents the significant expense and key metrics reviewed by the CODM:
16
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
| Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Net Sales | $ | $ | $ | $ | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Direct store expenses | |||||||||||||||||||||||
Other segment items (1) | |||||||||||||||||||||||
| Interest expense/(income), net | ( | ( | |||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
(1) Other segment items include non-store selling, general, and administrative expenses, depreciation and amortization, store closure costs, and other overhead expenses.
The Company categorizes the varieties of products it sells as perishable and non-perishable. Perishable product categories include produce, meat and meat alternatives, seafood, deli, bakery, floral and dairy and dairy alternatives. Non-perishable product categories include grocery, vitamins and supplements, bulk items, frozen foods, beer and wine, and natural health and body care.
In accordance with ASC 606, the following table represents a disaggregation of revenue for the thirteen and thirty-nine weeks ended September 27, 2026 and September 28, 2025:
| Thirteen weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||
| Perishables | $ | % | $ | % | |||||||||||||||||||
| Non-Perishables | % | % | |||||||||||||||||||||
| Net Sales | $ | % | $ | % | |||||||||||||||||||
| Thirty-nine weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||
| Perishables | $ | % | $ | % | |||||||||||||||||||
| Non-Perishables | % | % | |||||||||||||||||||||
| Net Sales | $ | % | $ | % | |||||||||||||||||||
10. Share-Based Compensation
2022 Incentive Plan
In March 2022, the Board adopted the Sprouts Farmers Market, Inc. 2022 Omnibus Incentive Compensation Plan (the “2022 Incentive Plan”), which became effective May 25, 2022, upon approval by the Company’s stockholders. The 2022 Incentive Plan provides team members of the Company, certain consultants and advisors who perform services for the Company, and non-employee members of the Board with the opportunity to receive grants of equity awards, including stock options, RSUs, PSAs, and other stock-based awards. The 2022 Incentive Plan replaced the 2013 Incentive Plan (as defined below).
17
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Awards Granted under the 2022 Incentive Plan
During the thirty-nine weeks ended September 27, 2026, the Company granted the following share-based compensation awards under the 2022 Incentive Plan:
| Grant Date | RSUs | PSAs | Options | |||||||||||||||||
| March 12, 2026 | ||||||||||||||||||||
| April 30, 2026 | ||||||||||||||||||||
| June 4, 2026 | ||||||||||||||||||||
| August 5, 2026 | ||||||||||||||||||||
| August 28, 2026 | ||||||||||||||||||||
| September 10, 2026 | ||||||||||||||||||||
| Total | ||||||||||||||||||||
| Weighted average grant date fair value | $ | $ | $ | |||||||||||||||||
| Weighted average exercise price | $ | — | $ | — | $ | |||||||||||||||
The aggregate number of shares of common stock that may be issued to team members and directors under the 2022 Incentive Plan may not exceed 6,600,000 , subject to the following adjustments. If any awards granted under the 2022 Incentive Plan, terminate, expire, or are cancelled, forfeited, exchanged, or surrendered without having been exercised, vested or paid in shares, the shares will again be available for purposes of the 2022 Incentive Plan. The number of shares subject to outstanding awards under the Sprouts Farmers Market, Inc. 2013 Incentive Plan (the “2013 Incentive Plan”) that terminate, expire, are paid in cash, or are cancelled, forfeited, exchanged, or surrendered without having been exercised, vested, or paid in shares under the 2013 Incentive Plan after the effective date of the 2022 Incentive Plan will be available for issuance under the 2022 Incentive Plan. As of September 27, 2026, there were 1,058,845 stock awards outstanding and 4,710,754 shares of common stock remaining available for issuance under the 2022 Incentive Plan.
2013 Incentive Plan
Prior to the adoption of the 2022 Incentive Plan, the 2013 Incentive Plan served as the umbrella plan for the Company’s share-based and cash-based incentive compensation programs for its directors, officers and other team members. Upon stockholder approval of the 2022 Incentive Plan on May 25, 2022, no further awards will be granted under the 2013 Incentive Plan, but awards outstanding under the 2013 Incentive Plan will remain outstanding in accordance with their terms and the terms of the 2013 Incentive Plan.
Stock Options
The Company uses the Black-Scholes option pricing model to estimate the fair value of options at grant date. Options vest in accordance with the terms set forth in the grant letter.
Time-based options vest annually over a period of three years .
RSUs
The fair value of RSUs is based on the closing price of the Company’s common stock on the grant date. RSUs generally vest annually over a period of or three years from the grant date.
PSAs
Our PSAs are awarded subject to the Company achieving certain earnings before interest and taxes (“EBIT”) performance targets for the fiscal year two years subsequent to the year of issuance. In accordance with ASC 718 Compensation-Stock Compensation, the Company evaluates the probability of achieving the EBIT performance targets (and increments of the range thereof) at issuance and at each subsequent reporting period, based on the Company’s then-current forecast of EBIT for the relevant performance year, and the
18
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
cumulative expense is recorded over the three-year service period according to the amount expected to be realized.
PSAs granted in 2023 are subject to the Company achieving certain EBIT performance targets for the 2025 fiscal year. The criteria was based on a range of performance targets in which grantees may earn 0 % to 200 % of the base number of awards granted. The performance conditions with respect to fiscal year 2025 EBIT were deemed to have been met, and the PSAs vested at the maximum payout level on the third anniversary of the grant date (March 2026). There were no outstanding 2023 PSAs as of September 27, 2026.
PSAs granted in 2024 are subject to the Company achieving certain EBIT performance targets for the 2026 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0 % to 200 % of the base number of awards granted. If performance conditions are met, the applicable number of performance shares will vest on the third anniversary of the grant date (March 2027).
PSAs granted in 2025 are subject to the Company achieving certain EBIT performance targets for the 2027 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0 % to 200 % of the base number of awards granted. If performance conditions are met, the applicable number of performance shares will vest on the third anniversary of the grant date (March 2028).
PSAs granted in 2026 are subject to the Company achieving certain EBIT performance targets for the 2028 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0 % to 200 % of the base number of awards granted. If performance conditions are met, the applicable number of performance shares will vest on the third anniversary of the grant date (March 2029).
Share-based Compensation Expense
The Company presents share-based compensation expense in selling, general and administrative expenses on the Company’s consolidated statements of income. The amount recognized was as follows:
| Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Share-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
The following share-based awards were outstanding under the 2022 Incentive Plan and the 2013 Incentive Plan as of September 27, 2026 and September 28, 2025:
| As of | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Options | |||||||||||
| Vested | |||||||||||
| Unvested | |||||||||||
| RSUs | |||||||||||
| PSAs | |||||||||||
19
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
As of September 27, 2026, total unrecognized compensation expense and remaining weighted average recognition period related to outstanding share-based awards were as follows:
| Unrecognized compensation expense | Remaining weighted average recognition period | ||||||||||
| Options | $ | ||||||||||
| RSUs | |||||||||||
| PSAs | |||||||||||
| Total unrecognized compensation expense at September 27, 2026 | $ | ||||||||||
During the thirty-nine weeks ended September 27, 2026 and September 28, 2025, the Company received $2.3 million and $1.7 million, respectively, in cash proceeds from the exercise of options.
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion of our financial condition and results of operations together with the consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the 2025 fiscal year, filed with the Securities and Exchange Commission ("SEC") on February 19, 2026 (“2025 Form 10-K”). All dollar amounts included below are in thousands, unless otherwise noted.
Business Overview
Sprouts Farmers Market offers a unique specialty grocery experience featuring an open layout with fresh produce at the heart of the store. Sprouts inspires wellness naturally with a carefully curated assortment of better-for-you products paired with purpose-driven people. We continue to bring the latest in wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based and gluten-free. From our founding in 2002, we have grown rapidly, significantly increasing our sales, store count and profitability. Headquartered in Phoenix with 504 stores in 25 states as of September 27, 2026, we are one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States.
Our Growth Strategy
We continue to execute on our long-term growth strategy that we believe is transforming our company and driving profitable growth, focusing on the following areas:
•Win with Target Customers. We are focusing attention on our target customers, identified through research as ‘health enthusiasts’ and ‘selective shoppers’, where there is ample opportunity to gain share within these customer segments. We believe our business can continue to grow by leveraging existing strengths in a unique assortment of better-for-you, quality products and by providing a full omnichannel offering through delivery or pickup via our website or the Sprouts app.
•Market Expansion. We are delivering unique smaller stores with expectations of stronger returns, while maintaining the approachable, fresh-focused farmer’s market heritage Sprouts is known for. From 2021 through September 27, 2026, we have opened 140 new stores and remodeled one store featuring our updated format. Our geographic store expansion and new store placement will intersect where our target customers live, in markets with growth potential and supply chain support, which we believe will provide a long runway of approximately 10% annual unit growth.
•Create an Advantaged Supply Chain. We believe our network of distribution centers can drive efficiencies across the chain and support our growth plans. To further deliver on our fresh commitment and reputation, as well as to increase our local offerings and improve our financial results, we aspire to ultimately position fresh distribution centers within a 250-mile radius of stores. As a step to improve our fresh supply chain, in 2025 we began the transition to a self-distribution model for meat and seafood through our fresh distribution centers. As a result, we are better leveraging our existing distribution center capacity, and approximately 80% of our stores were within 250 miles of a distribution center as of September 27, 2026.
•Customer Engagement and Personalization. We believe we are elevating our national brand recognition and positioning by telling our unique brand story rooted in product innovation and differentiation. We are increasing our use of data analytics and insights, including through the nationwide launch of our Sprouts Rewards loyalty program in 2025. We believe this data-driven intelligence will increase customer engagement through personalization efforts with digital and social connections to drive additional sales growth and loyalty.
•Inspire and Engage Our Talent to Make Sprouts a Best Place to Work. Subsequent to the initial launch of our long-term growth strategy, we have added the focus area of inspiring and engaging our talent through our culture, acquisition and development and total rewards program to attract and retain the talent we believe we need to execute on our strategic goals and transform our company into a premier place to work.
•Invest in Technology for Growth. We continue to make investments in technology in support of our strategy, with a focus on enhancing efficiency, scalability, and customer experience. While
21
we are showing positive outcomes on our strategic investments in inventory management and customer personalization, we believe that ongoing investments in our technology foundation will allow us to streamline operations and improve decision making to execute on our strategy.
•Deliver on Key Financial Metrics. We are measuring and reporting on the success of this strategy against a number of long-term financial and operational targets. Since the implementation of our strategy beginning in 2020, we have significantly improved our margin structure above our 2019 baseline.
The thirteen weeks ended September 27, 2026 were characterized by headwinds from the disruption caused by the cyclospora outbreak, which negatively impacted a number of our produce categories, as well as an uneven macroeconomic backdrop, resulting in lower traffic and more measured spending among our customers. We are addressing these challenges through our initiatives in affordability, innovation, personalization, marketing, and supply chain as we continue executing our long-term growth strategy. In the fourth quarter of fiscal 2026 and into fiscal 2027, we expect to increase and accelerate investments in affordability, including broader and deeper price investments, as well as investments in technology and supply chain. We will continue to assess customer response and may adjust the scale and pace of these investments accordingly. We expect these investments, together with lower comparable store sales, to pressure our margins in the near term.
Results of Operations for Thirteen Weeks Ended September 27, 2026 and September 28, 2025
The following tables set forth our unaudited results of operations and other operating data for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.
| Thirteen weeks ended | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
| Unaudited Quarterly Consolidated Statement of Income Data: | |||||||||||
| Net sales | $ | 2,304,720 | $ | 2,200,430 | |||||||
| Cost of sales | 1,423,926 | 1,349,379 | |||||||||
| Gross profit | 880,794 | 851,051 | |||||||||
| Selling, general and administrative expenses | 683,262 | 653,329 | |||||||||
| Depreciation and amortization (exclusive of depreciation included in cost of sales) | 44,916 | 38,862 | |||||||||
| Store closure and other costs/(credits), net | (169) | 1,462 | |||||||||
| Income from operations | 152,785 | 157,398 | |||||||||
| Interest expense/(income), net | 1,419 | (690) | |||||||||
| Income before income taxes | 151,366 | 158,088 | |||||||||
| Income tax provision | 37,945 | 37,972 | |||||||||
| Net income | $ | 113,421 | $ | 120,116 | |||||||
| Weighted average shares outstanding - basic | 93,128 | 97,672 | |||||||||
| Dilutive effect of equity-based awards | 538 | 1,043 | |||||||||
| Weighted average shares and equivalent shares outstanding - diluted | 93,666 | 98,715 | |||||||||
| Diluted net income per share | $ | 1.21 | $ | 1.22 | |||||||
22
| Thirteen weeks ended | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
| Other Operating Data: | |||||||||||
| Comparable store sales | (0.9) | % | 5.9 | % | |||||||
| Stores at beginning of period | 490 | 455 | |||||||||
| Closed | (1) | — | |||||||||
| Opened | 15 | 9 | |||||||||
| Stores at end of period | 504 | 464 | |||||||||
Comparison of Thirteen Weeks Ended September 27, 2026 to Thirteen Weeks Ended September 28, 2025
Net sales
| Thirteen weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Net sales | $ | 2,304,720 | $ | 2,200,430 | $ | 104,290 | 5 | % | |||||||||||||||
| Comparable store sales | (0.9) | % | 5.9 | % | |||||||||||||||||||
Net sales during the thirteen weeks ended September 27, 2026 totaled $2.3 billion, an increase of $104.3 million, or 5%, compared to the thirteen weeks ended September 28, 2025. The sales increase was primarily driven by $128.8 million in sales from new stores, partially offset by a 0.9% decrease in comparable store sales. The decrease in comparable store sales was primarily related to a 3.3% decrease in the number of transactions partially offset by a 2.5% increase in transaction size. Included in the comparable store sales decrease was a 0.6% negative impact from the cyclospora outbreak.
Cost of sales and gross profit
| Thirteen weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Net sales | $ | 2,304,720 | $ | 2,200,430 | $ | 104,290 | 5 | % | |||||||||||||||
| Cost of sales | 1,423,926 | 1,349,379 | 74,547 | 6 | % | ||||||||||||||||||
| Gross profit | 880,794 | 851,051 | 29,743 | 3 | % | ||||||||||||||||||
| Gross margin | 38.2 | % | 38.7 | % | (0.5) | % | |||||||||||||||||
Gross profit totaled $880.8 million during the thirteen weeks ended September 27, 2026, an increase of $29.7 million, or 3%, compared to the thirteen weeks ended September 28, 2025, primarily driven by $47.3 million due to increased sales volume from new stores, partially offset by lower comparable store sales. Gross margin decreased by 0.5% to 38.2% for the thirteen weeks ended September 27, 2026, compared to 38.7% for the thirteen weeks ended September 28, 2025, primarily driven by increased shrink of approximately 0.4% of sales as a result of softer comparable store sales performance and higher fuel costs of approximately 0.1% of sales.
Selling, general and administrative expenses
| Thirteen weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Selling, general and administrative expenses | $ | 683,262 | $ | 653,329 | $ | 29,933 | 5 | % | |||||||||||||||
| Percentage of net sales | 29.6 | % | 29.7 | % | (0.1) | % | |||||||||||||||||
23
Selling, general and administrative expenses during the thirteen weeks ended September 27, 2026 increased $29.9 million, or 5%, compared to the thirteen weeks ended September 28, 2025. The increase was primarily due to the increased expenses of $43.9 million associated with new stores. This was partially offset by a decrease of $15.2 million in incentive compensation costs.
Depreciation and amortization
| Thirteen weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Depreciation and amortization | $ | 44,916 | $ | 38,862 | $ | 6,054 | 16 | % | |||||||||||||||
| Percentage of net sales | 1.9 | % | 1.8 | % | 0.1 | % | |||||||||||||||||
Depreciation and amortization expense (exclusive of depreciation included in cost of sales) was $44.9 million for the thirteen weeks ended September 27, 2026, compared to $38.9 million for the thirteen weeks ended September 28, 2025. The increase was primarily driven by $3.3 million of depreciation and amortization associated with leasehold improvements and equipment for new store openings.
Store closure and other costs/(credits), net
| Thirteen weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Store closure and other costs/(credits), net | $ | (169) | $ | 1,462 | $ | (1,631) | (112) | % | |||||||||||||||
| Percentage of net sales | — | % | 0.1 | % | (0.1) | % | |||||||||||||||||
Store closure and other costs/(credits), net decreased $1.6 million to ($0.2) million for the thirteen weeks ended September 27, 2026, compared to $1.5 million for the thirteen weeks ended September 28, 2025. Store closure and other costs/(credits), net primarily consist of ongoing occupancy costs, including sublease income, associated with our closed store locations as well as one-time costs associated with disaster recovery activity.
Interest expense/(income), net
| Thirteen weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Long-term debt | $ | 177 | $ | 204 | $ | (27) | (13) | % | |||||||||||||||
| Finance leases | 1,399 | 337 | 1,062 | 315 | % | ||||||||||||||||||
| Deferred financing costs | 134 | 370 | (236) | (64) | % | ||||||||||||||||||
Interest income and other | (291) | (1,601) | 1,310 | 82 | % | ||||||||||||||||||
| Total interest expense/(income), net | $ | 1,419 | $ | (690) | $ | 2,109 | 306 | % | |||||||||||||||
Total interest expense, net of $1.4 million for the thirteen weeks ended September 27, 2026 changed compared to total interest income, net of ($0.7) million for the thirteen weeks ended September 28, 2025 primarily due to lower interest rates and invested cash as well as the increase in finance lease obligations. See Note 4, “Long-Term Debt and Other Finance Obligations” of our unaudited consolidated financial statements.
24
Income tax provision
Income tax provision differed from the amounts computed by applying the U.S. federal income tax rate to pretax income as a result of the following:
The table below provides the updated requirements of ASU no. 2023-09 for the thirteen weeks ended September 27, 2026.
| Thirteen weeks ended | |||||||||||
| September 27, 2026 | |||||||||||
| Federal statutory rate | $ | 31,787 | 21.0 | % | |||||||
| Change in income taxes resulting from: | |||||||||||
State income taxes, net of federal benefit(1) | 7,441 | 4.9 | % | ||||||||
| Enhanced charitable contributions | (1,316) | (0.9) | % | ||||||||
Non-deductible Executive Compensation | 1,189 | 0.8 | % | ||||||||
| Benefit of Federal Tax Credit | (39) | — | % | ||||||||
| Benefit of Transferable Tax Credit | (71) | — | % | ||||||||
| Share-based payment awards | (1,062) | (0.7) | % | ||||||||
| Return to Provision | (271) | (0.2) | % | ||||||||
Other, net(2) | 287 | 0.2 | % | ||||||||
| Effective tax rate | $ | 37,945 | 25.1 | % | |||||||
(1) State taxes in California made up the majority (greater than 50%) of the tax effect in this category.
(2) Includes items that are immaterial individually and in total.
| Thirteen weeks ended | ||||||||||||||
| September 28, 2025 | ||||||||||||||
| Federal statutory rate | 21.0 | % | ||||||||||||
| Change in income taxes resulting from: | ||||||||||||||
| State income taxes, net of federal benefit | 5.2 | % | ||||||||||||
| Enhanced charitable contributions | (0.9) | % | ||||||||||||
Non-deductible Executive Compensation | 1.9 | % | ||||||||||||
| Benefit of Federal Tax Credit | (0.4) | % | ||||||||||||
| Benefit of Transferable Tax Credit | (1.8) | % | ||||||||||||
| Share-based payment awards | (0.8) | % | ||||||||||||
| Return to Provision | (0.2) | % | ||||||||||||
| Other, net | — | % | ||||||||||||
| Effective tax rate | 24.0 | % | ||||||||||||
The effective tax rate increased to 25.1% for the thirteen weeks ended September 27, 2026 from 24.0% for the thirteen weeks ended September 28, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for transferable tax credits, a reduction in the benefit for federal credits, and a reduction in the benefit for share-based compensation, partially offset by a decrease in non-deductible executive compensation.
Net income
| Thirteen weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Net income | $ | 113,421 | $ | 120,116 | $ | (6,695) | (6) | % | |||||||||||||||
| Percentage of net sales | 4.9 | % | 5.5 | % | (0.6) | % | |||||||||||||||||
25
Net income decreased $6.7 million, primarily due to decreased comparable store sales and for the reasons discussed above.
Diluted earnings per share
| Thirteen weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Diluted earnings per share | $ | 1.21 | $ | 1.22 | $ | (0.01) | (1) | % | |||||||||||||||
Diluted weighted average shares outstanding | 93,666 | 98,715 | (5,049) | ||||||||||||||||||||
The decrease in diluted earnings per share of $0.01 was primarily driven by lower net income, partially offset by fewer outstanding shares, largely due to share repurchase activity during the thirteen weeks ended September 27, 2026 under our share repurchase program.
Results of Operations for Thirty-nine Weeks Ended September 27, 2026 and September 28, 2025
The following tables set forth our unaudited results of operations and other operating data for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.
| Thirty-nine weeks ended | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
| Unaudited Quarterly Consolidated Statement of Income Data: | |||||||||||
| Net sales | $ | 6,959,703 | $ | 6,657,468 | |||||||
| Cost of sales | 4,260,985 | 4,057,454 | |||||||||
| Gross profit | 2,698,718 | 2,600,014 | |||||||||
| Selling, general and administrative expenses | 2,024,676 | 1,921,682 | |||||||||
| Depreciation and amortization (exclusive of depreciation included in cost of sales) | 130,024 | 110,567 | |||||||||
| Store closure and other costs, net | 1,752 | 4,679 | |||||||||
| Income from operations | 542,266 | 563,086 | |||||||||
| Interest expense/(income), net | 1,358 | (2,045) | |||||||||
| Income before income taxes | 540,908 | 565,131 | |||||||||
| Income tax provision | 134,568 | 131,286 | |||||||||
| Net income | $ | 406,340 | $ | 433,845 | |||||||
| Weighted average shares outstanding - basic | 93,976 | 98,023 | |||||||||
| Dilutive effect of equity-based awards | 580 | 1,063 | |||||||||
| Weighted average shares and equivalent shares outstanding - diluted | 94,556 | 99,086 | |||||||||
| Diluted net income per share | $ | 4.30 | $ | 4.38 | |||||||
26
| Thirty-nine weeks ended | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
| Other Operating Data: | |||||||||||
| Comparable store sales | (1.2) | % | 9.3 | % | |||||||
| Stores at beginning of period | 477 | 440 | |||||||||
| Closed | (1) | — | |||||||||
| Opened | 28 | 24 | |||||||||
| Stores at end of period | 504 | 464 | |||||||||
Comparison of Thirty-nine Weeks Ended September 27, 2026 to Thirty-nine Weeks Ended September 28, 2025
Net Sales
| Thirty-nine weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Net sales | $ | 6,959,703 | $ | 6,657,468 | $ | 302,235 | 5 | % | |||||||||||||||
| Comparable store sales growth | (1.2) | % | 9.3 | % | |||||||||||||||||||
Net sales during the thirty-nine weeks ended September 27, 2026 totaled $7.0 billion, an increase of $302.2 million, or 5%, compared to the thirty-nine weeks ended September 28, 2025. The sales increase was driven by $403.6 million in sales from new stores, partially offset by a 1.2% decrease in comparable store sales. The decrease in comparable store sales was primarily related to a 3.4% decrease in the number of transactions, partially offset by a 2.2% increase in transaction size. The impact of the cyclospora outbreak was immaterial to the comparable store sales decrease for the thirty-nine weeks ended September 27, 2026.
Cost of sales and gross profit
| Thirty-nine weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Net sales | $ | 6,959,703 | $ | 6,657,468 | $ | 302,235 | 5 | % | |||||||||||||||
| Cost of sales | 4,260,985 | 4,057,454 | 203,531 | 5 | % | ||||||||||||||||||
| Gross profit | 2,698,718 | 2,600,014 | 98,704 | 4 | % | ||||||||||||||||||
| Gross margin | 38.8 | % | 39.1 | % | (0.3) | % | |||||||||||||||||
Gross profit totaled $2.7 billion during the thirty-nine weeks ended September 27, 2026, an increase of $98.7 million, or 4%, compared to the thirty-nine weeks ended September 28, 2025, driven by $145.7 million due to increased sales volume from new stores, partially offset by lower comparable store sales. Gross margin decreased to 38.8% for the thirty-nine weeks ended September 27, 2026, compared to 39.1% for the thirty-nine weeks ended September 28, 2025, primarily driven by a 0.3% increase in shrink as a percentage of sales, resulting from softer comparable store sales performance.
Selling, general and administrative expenses
| Thirty-nine weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Selling, general and administrative expenses | $ | 2,024,676 | $ | 1,921,682 | $ | 102,994 | 5 | % | |||||||||||||||
| Percentage of net sales | 29.1 | % | 28.9 | % | 0.2 | % | |||||||||||||||||
27
Selling, general and administrative expenses during the thirty-nine weeks ended September 27, 2026 increased by $103.0 million, or 5%, compared to the thirty-nine weeks ended September 28, 2025. The increase was primarily due to increased expenses of $127.1 million associated with new stores and $8.1 million of e-commerce fees in relation to higher e-commerce sales volume. This was partially offset by a decrease of $36.1 million in incentive compensation costs.
Depreciation and amortization
| Thirty-nine weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Depreciation and amortization | $ | 130,024 | $ | 110,567 | $ | 19,457 | 18 | % | |||||||||||||||
| Percentage of net sales | 1.9 | % | 1.7 | % | 0.2 | % | |||||||||||||||||
Depreciation and amortization expense (exclusive of depreciation included in cost of sales) was $130.0 million for the thirty-nine weeks ended September 27, 2026, compared to $110.6 million for the thirty-nine weeks ended September 28, 2025. The increase was primarily driven by $10.0 million of depreciation and amortization associated with leasehold improvements and equipment for new store openings.
Store closure and other costs, net
| Thirty-nine weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Store closure and other costs, net | $ | 1,752 | $ | 4,679 | $ | (2,927) | (63) | % | |||||||||||||||
| Percentage of net sales | — | % | 0.1 | % | (0.1) | % | |||||||||||||||||
Store closure and other costs, net for the thirty-nine weeks ended September 27, 2026 decreased $2.9 million to $1.8 million, compared to $4.7 million for the thirty-nine weeks ended September 28, 2025. Store closure and other costs, net primarily consist of ongoing occupancy costs, including sublease income, associated with our closed store locations as well as one-time costs associated with disaster recovery activity.
Interest expense/(income), net
| Thirty-nine weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Long-term debt | $ | 554 | $ | 629 | $ | (75) | (12) | % | |||||||||||||||
| Finance leases | 1,911 | 681 | 1,230 | 181 | % | ||||||||||||||||||
| Deferred financing costs | 401 | 756 | (355) | (47) | % | ||||||||||||||||||
| Interest income and other | (1,508) | (4,111) | 2,603 | 63 | % | ||||||||||||||||||
| Total interest expense/(income), net | $ | 1,358 | $ | (2,045) | $ | 3,403 | 166 | % | |||||||||||||||
Total interest expense, net of $1.4 million for the thirty-nine weeks ended September 27, 2026 changed compared to total interest income, net of ($2.0) million for the thirty-nine weeks ended September 28, 2025, primarily due to lower interest rates and invested cash as well as the increase in finance lease obligations. See Note 4, “Long-Term Debt and Other Finance Obligations” of our unaudited consolidated financial statements.
28
Income tax provision
Income tax provision differed from the amounts computed by applying the U.S. federal income tax rate to pretax income as a result of the following:
The table below provides the updated requirements of ASU no. 2023-09 for the thirty-nine weeks ended September 27, 2026.
| Thirty-nine weeks ended | |||||||||||
| September 27, 2026 | |||||||||||
| Federal statutory rate | $ | 113,591 | 21.0 | % | |||||||
| Change in income taxes resulting from: | |||||||||||
State income taxes, net of federal benefit(1) | 26,772 | 4.9 | % | ||||||||
| Enhanced charitable contributions | (4,954) | (0.9) | % | ||||||||
| Non-deductible Executive Compensation | 5,270 | 1.0 | % | ||||||||
| Benefit of Federal Tax Credit | (111) | — | % | ||||||||
| Benefit of Transferable Tax Credit | (223) | — | % | ||||||||
| Share-based payment awards | (5,676) | (1.0) | % | ||||||||
| Return to Provision | (293) | (0.1) | % | ||||||||
Other, net(2) | 192 | — | % | ||||||||
| Effective tax rate | $ | 134,568 | 24.9 | % | |||||||
(1) State taxes in California made up the majority (greater than 50%) of the tax effect in this category.
(2) Includes items that are immaterial individually and in total.
| Thirty-nine weeks ended | ||||||||||||||
| September 28, 2025 | ||||||||||||||
| Federal statutory rate | 21.0 | % | ||||||||||||
| Change in income taxes resulting from: | ||||||||||||||
| State income taxes, net of federal benefit | 5.1 | % | ||||||||||||
| Enhanced charitable contributions | (0.9) | % | ||||||||||||
| Non-deductible Executive Compensation | 1.6 | % | ||||||||||||
| Benefit of Federal Tax Credit | (0.2) | % | ||||||||||||
| Benefit of Transferable Tax Credit | (0.5) | % | ||||||||||||
| Share-based payment awards | (2.8) | % | ||||||||||||
| Return to Provision | (0.1) | % | ||||||||||||
| Other, net | — | % | ||||||||||||
| Effective tax rate | 23.2 | % | ||||||||||||
The effective tax rate increased to 24.9% for the thirty-nine weeks ended September 27, 2026 from 23.2% for the thirty-nine weeks ended September 28, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for share-based compensation, a reduction in the benefit for transferable tax credits, and a reduction in the benefit for federal credits partially offset by a decrease in non-deductible executive compensation.
29
Net income
| Thirty-nine weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Net income | $ | 406,340 | $ | 433,845 | $ | (27,505) | (6) | % | |||||||||||||||
| Percentage of net sales | 5.8 | % | 6.5 | % | (0.7) | % | |||||||||||||||||
Net income decreased $27.5 million primarily due to decreased comparable store sales and the reasons discussed above.
Diluted earnings per share
| Thirty-nine weeks ended | |||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | Change | % Change | ||||||||||||||||||||
| Diluted earnings per share | $ | 4.30 | $ | 4.38 | $ | (0.08) | (2) | % | |||||||||||||||
Diluted weighted average shares outstanding | 94,556 | 99,086 | (4,530) | ||||||||||||||||||||
The decrease in diluted earnings per share of $0.08 was primarily driven by lower net income, partially offset by fewer outstanding shares, largely due to our share repurchase program.
Return on Invested Capital
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, we provide information regarding Return on Invested Capital (“ROIC”) as additional information about our operating results. ROIC is a non-GAAP financial measure and should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ROIC is an important measure used by management to evaluate our investment returns on capital and provides a meaningful measure of the effectiveness of our capital allocation over time.
We define ROIC as net operating profit after tax (“NOPAT”), including the effect of capitalized operating leases, divided by average invested capital. Operating lease interest represents the add-back to operating income driven by the hypothetical interest expense we would incur if the property under our operating leases were owned or accounted for as a finance lease. The assumed ownership and associated interest expense are calculated using the discount rate for each lease as recorded as a component of rent expense within selling, general and administrative expenses. Invested capital reflects a trailing four-quarter average.
As numerous methods exist for calculating ROIC, our method may differ from methods used by other companies to calculate their ROIC. It is important to understand the methods and the differences in those methods used by other companies to calculate their ROIC before comparing our ROIC to that of other companies.
30
Our calculation of ROIC for the fiscal periods indicated was as follows:
Rolling Four Quarters Ended | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
(dollars in thousands) | |||||||||||
Net income (1) | $ | 496,165 | $ | 513,447 | |||||||
Interest (income) expense, net of tax (2) | 583 | (2,947) | |||||||||
| Net operating profit after tax (NOPAT) | $ | 496,748 | $ | 510,500 | |||||||
Total rent expense, net of tax (2) | 223,016 | 204,225 | |||||||||
Estimated depreciation on operating leases, net of tax (2) | (121,368) | (112,661) | |||||||||
Estimated interest on operating leases, net of tax (2), (3) | 101,648 | 91,564 | |||||||||
| NOPAT, including effect of operating leases | $ | 598,396 | $ | 602,064 | |||||||
| Average net working capital | 159,548 | 165,830 | |||||||||
| Average property and equipment | 1,126,903 | 911,604 | |||||||||
| Average other assets | 611,838 | 605,688 | |||||||||
| Average other liabilities | (123,220) | (110,141) | |||||||||
| Average invested capital | $ | 1,775,069 | $ | 1,572,981 | |||||||
Average operating leases (4) | 1,943,961 | 1,715,590 | |||||||||
| Average invested capital, including operating leases | $ | 3,719,030 | $ | 3,288,571 | |||||||
| ROIC, including operating leases | 16.1 | % | 18.3 | % | |||||||
(1)Net income amounts represent total net income for the past four trailing quarters.
(2)Net of tax amounts are calculated using the normalized effective tax rate for the periods presented.
(3)2026 and 2025 estimated interest on operating leases is calculated by multiplying operating leases by the discount rate of 7.0% for each lease recorded as rent expense within direct store expense.
(4)Average operating leases represent the average net present value of outstanding lease obligations over the past four trailing quarters.
Liquidity and Capital Resources
The following table sets forth the major sources and uses of cash for each of the periods set forth below, as well as our cash, cash equivalents and restricted cash at the end of each period:
| Thirty-nine weeks ended | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 231,259 | $ | 325,480 | |||||||
| Cash flows from operating activities | $ | 555,127 | $ | 577,471 | |||||||
| Cash flows used in investing activities | $ | (284,210) | $ | (176,081) | |||||||
| Cash flows used in financing activities | $ | (300,552) | $ | (343,123) | |||||||
We have generally financed our operations principally through cash generated from operations and borrowings under our credit facilities. Our primary uses of cash are for purchases of inventory, operating expenses, capital expenditures primarily for opening new stores, remodels and maintenance, repurchases of our common stock and debt service. Our principal contractual obligations and commitments consist of
31
obligations under our Credit Agreement, interest on our Credit Agreement, operating and finance leases, purchase commitments and self-insurance liabilities. Our operating and finance leases for the rental of land, buildings, and for rental of facilities and equipment expire or become subject to renewal clauses at various dates through 2049. We believe that our existing cash, cash equivalents and restricted cash, and cash anticipated to be generated from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months and going forward. Our future capital requirements will depend on many factors, including new store openings, remodel and maintenance capital expenditures at existing stores, store initiatives and other corporate capital expenditures and activities. Our cash, cash equivalents and restricted cash position benefits from the fact that we generally collect cash from sales to customers the same day or, in the case of credit or debit card transactions, within days from the related sale.
Operating Activities
Cash flows from operating activities decreased by $22.4 million to $555.1 million for the thirty-nine weeks ended September 27, 2026 compared to $577.5 million for the thirty-nine weeks ended September 28, 2025. The decrease in cash flows from operating activities was primarily a result of changes in working capital of $62.6 million, partially offset by a $20.8 million decrease in payments on our operating lease liabilities, higher net income adjusted for non-cash items of $13.5 million, and a $5.7 million increase in other long-term liabilities.
Cash flows (used in)/provided by operating activities from changes in working capital were ($39.4) million in the thirty-nine weeks ended September 27, 2026 compared to $23.2 million in the thirty-nine weeks ended September 28, 2025. The $62.6 million decrease in cash flows from changes in working capital was primarily attributable to the following factors, each of which had a negative impact on working capital: (i) a $76.6 million change in accounts payable and accrued liabilities primarily due to timing differences of payments for goods and services, (ii) a $22.1 million change in accrued salaries and benefits primarily driven by the payout of annual corporate bonuses, (iii) a $16.2 million change in accounts receivable driven by the timing of collections, and (iv) an $11.5 million change in accrued income tax. These decreases were partially offset by (i) a $43.3 million change in inventory largely due to improved inventory positioning and (ii) a $20.5 million change in prepaid expenses and other current assets primarily driven by tax expense exceeding tax payments.
Investing Activities
Cash flows used in investing activities consist primarily of capital expenditures in new stores, including leasehold improvements and store equipment, capital expenditures to maintain the appearance of our stores, sales enhancing initiatives and other corporate investments as well as cash outlays for acquisitions. Cash flows used in investing activities were $284.2 million and $176.1 million, for the thirty-nine weeks ended September 27, 2026 and the thirty-nine weeks ended September 28, 2025, respectively.
We expect capital expenditures to be approximately $310 million in fiscal year 2026, including expenditures incurred to date, net of landlord reimbursements, primarily to fund investments in new stores, remodels, maintenance capital expenditures and corporate capital expenditures. We expect to fund our capital expenditures with cash on hand and cash generated from operating activities.
Financing Activities
Cash flows used in financing activities were $300.6 million for the thirty-nine weeks ended September 27, 2026 compared to $343.1 million for the thirty-nine weeks ended September 28, 2025. In both periods, the cash flows used in financing activities primarily consisted of repurchases of our common stock.
Long-Term Debt and Credit Facilities
The Company had no long-term debt outstanding as of September 27, 2026 and December 28, 2025.
See Note 4, “Long-Term Debt and Other Finance Obligations” of our unaudited consolidated financial statements for a description of our Credit Agreement and our Former Credit Facility (each as defined therein).
32
Share Repurchase Program
Our board of directors from time to time authorizes share repurchase programs for our common stock. The following table outlines the share repurchase programs authorized by our board, and the related repurchase activity and available authorization as of September 27, 2026:
| Effective date | Expiration date | Amount authorized | Cost of repurchases | Authorization available | ||||||||||||||||||||||
| May 22, 2024 | May 22, 2027 | $ | 600,000 | $ | 457,408 | $ | — | |||||||||||||||||||
| August 13, 2025 | N/A | $ | 1,000,000 | $ | 463,215 | $ | 536,785 | |||||||||||||||||||
The shares under our current repurchase program may be purchased on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. Our board’s authorization of the share repurchase program does not obligate our Company to acquire any particular amount of common stock, and the repurchase program may be commenced, suspended, or discontinued at any time.
Share repurchase activity under our repurchase program for the periods indicated was as follows (total cost in thousands):
| Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Number of common shares acquired | 1,126,323 | 364,852 | 3,888,075 | 2,399,289 | |||||||||||||||||||
| Average price per common share acquired | $ | 79.98 | $ | 137.49 | $ | 77.65 | $ | 143.76 | |||||||||||||||
| Total cost of common shares acquired | $ | 90,081 | $ | 50,162 | $ | 301,891 | $ | 344,911 | |||||||||||||||
Shares purchased under our repurchase programs were subsequently retired and the excess of the repurchase price over par value was charged to retained earnings. The cost of common shares repurchased included the 1% excise tax imposed as part of the Inflation Reduction Act of 2022.
Subsequent to September 27, 2026 and through October 26, 2026, we repurchased an additional 0.5 million shares of common stock for $30.0 million, excluding excise tax.
Contractual Obligations
Our principal contractual obligations and commitments arising in the normal course of business consist of obligations under our Credit Agreement, interest on our Credit Agreement, operating and finance leases, purchase commitments and self-insurance liabilities. Except as otherwise disclosed in Note 4, “Long-Term Debt and Other Finance Obligations” and Note 6, "Commitments and Contingencies" of our unaudited consolidated financial statements, there have been no material changes outside the normal course of business as of September 27, 2026 in our contractual obligations and commitments from those reported in our 2025 Form 10-K.
Impact of Inflation and Deflation
Inflation and deflation in the prices of food and other products we sell may periodically affect our sales, gross profit and gross margin. Food inflation, when combined with reduced consumer spending, could also reduce sales, gross profit margins and comparable store sales. Inflationary pressures on compensation, utilities, commodities, equipment and supplies may also impact our profitability. Food deflation or declining levels of inflation across multiple categories, particularly in produce, could reduce sales growth and earnings, particularly if our competitors react by lowering their retail pricing and expanding their promotional activities, which can lead to retail deflation higher than cost deflation that could reduce our sales, gross profit margins and comparable store sales. The short-term impact of inflation and deflation is largely dependent on whether or not the effects are passed through to our customers, which is subject to competitive market conditions.
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Food inflation and deflation are affected by a variety of factors and our determination of whether to pass on the effects of inflation or deflation to our customers is made in conjunction with our overall pricing and marketing strategies, as well as our competitors’ responses. Although we may experience periodic effects on sales, gross profit, gross margins and cash flows as a result of changing prices, we do not expect the effect of inflation or deflation to have a material impact on our ability to execute our long-term business strategy.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. These principles require us to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, cash flow and related disclosure of contingent assets and liabilities. Our critical accounting estimates include inventories, lease assumptions, self-insurance reserves, goodwill and intangible assets, impairment of long-lived assets, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.
There have been no substantial changes to these estimates, or the policies related to them during the thirteen and thirty-nine weeks ended September 27, 2026. For a full discussion of these estimates and policies, see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in Part II — Item 7 of our 2025 Form 10-K.
Recently Issued Accounting Pronouncements
See Note 2, “Summary of Significant Accounting Policies” to our accompanying unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As described in Note 4, “Long-Term Debt and Other Finance Obligations” to our unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q, our Credit Agreement bears interest at a rate based in part on SOFR (as defined in the Credit Agreement). Accordingly, we could be exposed to fluctuations in interest rates. As of September 27, 2026, we had no outstanding borrowings under our Credit Agreement.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 27, 2026, the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
During the quarterly period ended September 27, 2026, there were no changes in our internal control over financial reporting that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we are a party to legal proceedings, including matters involving personnel and employment issues, product liability, personal injury, intellectual property and other proceedings arising in the ordinary course of business, which have not resulted in any material losses to date. Although management does not expect that the outcome in these proceedings will have a material adverse effect on our financial condition or results of operations, litigation is inherently unpredictable. Therefore, we could incur judgments or enter into settlements of claims that could materially impact our results.
See Note 6, “Commitments and Contingencies” to our unaudited consolidated financial statements for information regarding certain legal proceedings in which we are involved.
Item 1A. Risk Factors.
Certain factors may have a material adverse effect on our business, financial condition and results of operations. You should carefully consider the risks and uncertainties referenced below, together with all of the other information in this Quarterly Report on Form 10-Q, including our consolidated financial statements and related notes. Any of those risks could materially and adversely affect our business, operating results, financial condition, or prospects and cause the value of our common stock to decline, which could cause you to lose all or part of your investment.
There have been no material changes to the Risk Factors described under “Part I – Item 1A. Risk Factors” in our 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
The following table provides information about our share repurchase activity during the thirteen weeks ended September 27, 2026.
Period (1) | Total number of shares purchased | Average price paid per share(2) | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs (3) | ||||||||||||||||||||||
| June 29, 2026 - July 26, 2026 | 503,699 | $ | 79.41 | 503,699 | $ | 586,006,000 | ||||||||||||||||||||
| July 27, 2026 - August 23, 2026 | 216,567 | $ | 83.11 | 216,567 | $ | 568,007,000 | ||||||||||||||||||||
| August 24, 2026 - September 27, 2026 | 406,057 | $ | 76.89 | 406,057 | $ | 536,785,000 | ||||||||||||||||||||
| Total | 1,126,323 | 1,126,323 | ||||||||||||||||||||||||
(1)Periodic information is presented by reference to our fiscal periods during the third quarter of fiscal year 2026.
(2)Average price paid per share includes costs associated with the purchases, but excludes the excise tax on share repurchases imposed as part of the Inflation Reduction Act of 2022.
(3)On August 13, 2025, our board of directors authorized a new $1 billion share repurchase program for our common stock. The new repurchase authorization does not have an expiration date. The shares may be purchased on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans.
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Item 5. Other Information.
Rule 10b5-1 Trading Arrangements
On August 19, 2026 , Jack Sinclair , our Chief Executive Officer and member of our board of directors adopted a written plan for the sale of our common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (a “Rule 10b5-1 Trading Plan”) that provided for the sale of up to 122,830 shares of our common stock beginning December 1, 2026 through May 4, 2027 (the "August 10b5-1 Plan"). On September 10, 2026 Mr. Sinclair terminated the August 10b5-1 Plan and entered into a new Rule 10b5-1 Trading Plan for the sale of up to 206,896 shares of our common stock beginning December 14, 2026 through May 4, 2027 .
During the third quarter of 2026, except as described above, none of our directors or executive officers adopted or terminated a written plan for the sale of our common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, or a "non-Rule 10b5-1 trading arrangement" (as defined in Item 408(c) of Regulation S-K).
Item 6. Exhibits.
Exhibit Number | Description | |||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1** | ||||||||
| 32.2** | ||||||||
| 101 | The following financial information from the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2026, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements | |||||||
| 104 | Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101) | |||||||
_____________________________________________________________
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SPROUTS FARMERS MARKET, INC. | ||||||||
Date: October 28, 2026 | By: | /s/ Curtis Valentine | ||||||
| Name: | Curtis Valentine | |||||||
| Title: | Chief Financial Officer | |||||||
| (Principal Financial Officer) | ||||||||
37
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Jack L. Sinclair, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Sprouts Farmers Market, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 28, 2026 | /s/ Jack L. Sinclair | ||||
| Jack L. Sinclair | |||||
| Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Curtis Valentine, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Sprouts Farmers Market, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 28, 2026 | /s/ Curtis Valentine | ||||
| Curtis Valentine | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Sprouts Farmers Market, Inc. (the “Company”), on Form 10-Q for the quarterly period ended September 27, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jack L. Sinclair, Chief Executive Officer of the Company, certify, based on my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: October 28, 2026 | /s/ Jack L. Sinclair | ||||
| Jack L. Sinclair | |||||
| Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Sprouts Farmers Market, Inc. (the “Company”), on Form 10-Q for the quarterly period ended September 27, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Curtis Valentine, Chief Financial Officer of the Company, certify, based on my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: October 28, 2026 | /s/ Curtis Valentine | ||||
| Curtis Valentine | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.