Sprouts Farmers Market, Inc.: Phoenix Rising — Upgrading to Overweight as Comp Inflection Takes Hold

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Sprouts Farmers Market, Inc.: Phoenix Rising — Upgrading to Overweight as Comp Inflection Takes Hold

J P M O R G A N North America Equity Research

29 July 2026

Sprouts Farmers Market, Inc. ▲Overweight

Previous: Neutral

Phoenix Rising — Upgrading to Overweight as Comp SFM, SFM US

Price (29 Jul 26):$79.16

Inflection Takes Hold ▲Price Target (Dec-27):$103.00

Prior (Dec-27):$80.00

We are upgrading the shares of Phoenix-based SFM to Overweight from Neutral. Food Producers & Retailers

ACWe think sales growth is at a positive inflection point, which could help drive a Thomas Palmer, CFA

re-rating in the shares. As reported after the close, SFM’s 2Q26 comps and EPS (1-212) 622-5582

slightly outpaced estimates. Perhaps more importantly, the midpoint of SFM’s thomas.palmer@jpmorgan.com

guidance range calls for comps to turn positive in 3Q26, despite minor headwinds J.P. Morgan Securities LLC

from cyclospora and the more challenged consumer environment. Unit growth is

accelerating, and the company seems to have a long runway here given its elevated Key Changes (FYE Dec)

new store productivity and its still-regional footprint (with new expansion into the Prev Cur Δ

Midwest and Northeast). Admittedly, SFM’s affordability efforts have proven less Adj. EPS - 26E ($) 5.58 5.55 -0.5%

effective in boosting comps than anticipated, which contributed to SFM (a) Adj. EPS - 27E ($) 5.77 5.79 0.3%

narrowing its annual comp range around the midpoint of its prior outlook (now:

-0.5% to +0.5%) and (b) lowering the high ends of EBIT guidance by $10MM and Quarterly Forecasts (FYE Dec)

EPS by $0.08. However, SFM’s next round of affordability efforts (discussed Adj. EPS ($)

2025A 2026E 2027E

below) is not expected to impair gross margin (prior efforts have not), nor is it Q1 1.81 1.71A 1.85