Food, Value & Services Retailers Weekly: Grocery promo accelerated in July MTD

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Food, Value & Services Retailers Weekly: Grocery promo accelerated in July MTD

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Food Retailers

Food, Value & Services Retailers Weekly:

Grocery promo accelerated in July MTD

Earnings Preview

BOBS web traffic 70%+, strongest over last 12 months 26 July 2026

FIVE Observed Sales remained strong and grew 17%, driven by an 18% growth in Equity

Observed Transactions with -1% ticket. SFM sales decelerated to -2.3%, as a -3.3% United States

decline in transactions was partially offset by +1.1% ticket growth. DLTR Observed Food Retailers

Sales grew 4.4%, driven primarily by growth in Ticket +3.4% and Transactions +0.9%. Robert F. Ohmes, CFA

Web traffic momentum accelerated at BOBS to +73%, the strongest over the past year. Research Analyst

BofAS

SFM 2Q preview: comparison should ease starting next qtr +1robert.ohmes@bofa.com646 855 0078

SFM reports 2Q on 7/29. We see $1.34 EPS and -1% comps, both in-line with the Street Vicky Liu, CFA

($1.35 EPS and -1% comps). Observed Sales slowed sequentially from 2.45% in 1Q to ResearchBofAS Analyst

1.88% in 2Q, according to Bloomberg Second Measure data, and Observed Transactions +1 646 855 5115

yanjun.liu@bofa.com

remain pressured at 0.23%. We are modeling 2Q EBIT margin -75bp y/y, as SFM could

Xavier Le Mene >>

see pressure from Northern California DC rollout cost, gross margin dilution from loyalty Research Analyst

program rewards (will lap in 3Q), higher fuel costs, and fixed cost deleverage from lower MLI (UK)

+44 20 7996 7591

comps. SFM is now trading at just 12-13x 2-year forward P/E, lower than its 10-year xavier.le_mene@bofa.com

average of 17.5x. We maintain our Buy rating and PO of $100 based on 17x 2027E EPS

as we believe valuation upside should be supported by SFM’s unique assortment, higher