Sprouts Farmers Market is Monday's pick for IBD 50 Growth Stocks To Watch. Sprouts stock is sitting in a cup base near a buy point with its earnings report out of the way.
The grocer topped analysts' first-quarter profit and sales estimates late Wednesday, but the stock hasn't reacted much. The IBD 50, Big Cap 20 and MarketSurge Growth 250 stock pulled back nearly 1% Monday.
Sprouts Farmers Market is a grocery retailer that sells fresh, natural and organic foods grown locally in the U.S.
Phoenix-based Sprouts opened three new stores in the first quarter, bringing the total to 443 stores in 24 states as of March 30. It plans to open at least 35 new stores in 2025, according to its first-quarter earnings release.
It ranks No. 1 out of 11 stocks in the Retail-Super/Mini Markets group, which holds the 23rd spot out of the 197 industry groups that Investor's Business Daily tracks. The group holds an 88 IBD Relative Strength Rating, while Sprouts stock has a 97 RS Rating,
How To Know It's Time To Sell Your Favorite Stock
Sprouts Stock Stalls In A Base
Sprouts stock is in a third-stage cup base with a 178.99 buy point, according to MarketSurge pattern recognition. The entry point is also its all-time high reached on Feb. 18. The grocery stock is taking a break after four straight weeks of gains.
Its 50-day moving average has flattened out as its relative strength line reached a 52-week high as shown by the blue dot on it weekly chart.
Shares have gained around 35% so far this year and have nearly quadrupled since their December 2023 flat-base breakout.
Sprouts Farmers Market Posts Beat And Raise
Sprouts reported better-than-expected first-quarter earnings and sales last week. It produced its fourth straight quarter of accelerating profit growth. Its first-quarter earnings per share of $1.81 grew 62% from $1.12 a year ago.
Sprouts Farmers Market's revenue growth ramped up to 19% from 8% over the last six quarters. And its first-quarter comparable-store sales grew 11.7%.
Sprouts now forecasts same-store sales growth of 6.5% to 8.5% for the second quarter. It also predicted second-quarter profit above views and raised its full-year 2025 earnings outlook. Sprouts sees second-quarter profit of $1.19 to $1.23 per share.
It now expects full-year 2025 earnings per share in the range of $4.94 to $5.10. Sprouts forecasts full-year 2025 net sales growth in the range of 12% to 14%, with comparable-store sales growth of 5.5% to 7.5%.
During the first quarter, the grocery retailer bought back 1.6 million shares of stock totaling $219 million.
Funds Add Sprouts Stock
The stock's IBD Accumulation/Distribution Rating of B indicates moderate institutional buying over the last 13 weeks. Mutual funds have increased their shares for six straight quarters.
And its 1.5 up/down volume ratio shows positive demand over the last 50 days.
The company has been a steady profit grower over the last three years as seen in its Earnings Stability factor of 11 out of 99 possible — with a lower number being better.
Finally, Sprouts Farmers Market stock holds a best-possible IBD Composite Rating of 99 and a stellar Earnings Per Share Rating of 98.
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