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Globe and Mail
a day ago
- Business
- Globe and Mail
Sprouts Farmers vs. Target: Which Retail Stock Holds More Promise Now?
Sprouts Farmers Market, Inc. SFM and Target Corporation TGT may differ in scale and strategy, but both are key players in the retail landscape. SFM, with a market capitalization of approximately $15.8 billion and more than 440 stores, specializes in fresh, natural and organic foods tailored to health-conscious consumers. Target operates more than 1,900 stores and boasts a market capitalization of $43.2 billion, offering groceries as part of its expansive one-stop-shop model that spans household goods, apparel and more. Both retailers are navigating a changing consumer landscape shaped by inflation, value-driven behavior and shifting shopping habits. Sprouts Farmers focuses on disciplined growth and a specialized retail experience, while Target leverages its scale and broad assortment to drive traffic. Let's dive deep into the stocks to determine which stands out as the better bet today. The Case for Sprouts Farmers Sprouts Farmers' commitment to providing fresh produce and health-oriented products aligns with the increasing consumer demand for healthier food options. The overall market for natural and organic food at home, which SFM targets, is estimated to be around $290 billion within the total $1.6 trillion spent on food at home. Its private-label products continue to gain traction, accounting for 24% of total sales, with 300 new items launched last year, fostering customer loyalty. This supports SFM's full-year 2025 guidance, which includes net sales growth of 12% to 14%. To strengthen customer relationships, SFM has initiated the rollout of its new loyalty program, which is already showing positive signs. Piloted in 35 stores in late 2024, the program achieved sign-ups and scan rates above targets. A broader launch begins in the second half of 2025, starting in Arizona. Sprouts Farmers also began self-distributing fresh meat and seafood through its distribution centers. This move provides greater control, enhances freshness and optimizes existing supply-chain capacity. SFM aims to open at least 35 new stores in 2025, targeting approximately 10%-unit growth, backed by a solid pipeline of 120 approved sites and more than 85 signed leases. Its new small-box format (23,000 sq. ft.) supports efficient, lower-risk expansion. These locations generate approximately $13 million in first-year sales and grow 20-25% over four years, delivering cash-on-cash returns in the low-to-mid 30% range by year five. Management sees 'plenty of white space' to expand the footprint to 1,000+ stores over time. Sprouts Farmers has adopted a multi-channel strategy with significant investments in digital infrastructure, online ordering and delivery. Collaborations with Uber Eats, DoorDash and Instacart have enhanced its digital reach, with e-commerce now representing 15% of total sales, marking a 28% year-over-year increase in the first quarter of 2025. The Case for Target Target is leveraging its strong brand presence, diverse product portfolio and expanding e-commerce capabilities, alongside a growing store footprint, to solidify its market position and drive sustainable growth. The retailer has adeptly navigated evolving consumer preferences by expanding its offerings across both discretionary and essential categories. By prioritizing innovation and integrating AI technology, the company is laying a solid foundation for long-term success. To support this growth, the company plans to open more than 20 new stores and remodel several existing locations in fiscal 2025. Complementing its physical expansion, Target's investments in same-day delivery, curbside pickup and personalized digital services continue to enhance customer convenience and loyalty. Digitally originated comparable sales rose 4.7% year over year in the first quarter of fiscal 2025, reflecting a more than 35% jump in same-day delivery powered by Target Circle 360 and continued momentum in Drive Up. Target's third-party marketplace, Target Plus, saw impressive growth in the first quarter, with a 20% increase in Gross Merchandise Value ('GMV'). The platform added hundreds of new partners, driving both traffic and online conversions. As Target sets an ambitious goal of reaching $5 billion GMV by 2030, this marketplace will play a crucial role in expanding its product offering and increasing consumer engagement. Despite these strategic efforts, Target has issued a cautious outlook for fiscal 2025. It now expects a low-single-digit decline in sales compared with its earlier forecast of 1% growth. It now foresees adjusted earnings in the band of $7.00-$9.00 per share, down from its prior forecast of $8.80 to $9.80. Target's first-quarter performance highlighted mounting challenges as both sales and earnings fell short of expectations. The company faced continued pressure from weakening consumer demand and declining store traffic. Comparable sales declined sharply, driven by softness in in-store performance. Margins contracted due to increased markdowns and higher costs tied to digital fulfillment and supply-chain expansion. SFM vs. TGT: How Do Estimates Stack Up? The Zacks Consensus Estimate for Sprouts Farmers' earnings per share (EPS) for the current and next fiscal years has increased by 42 cents and 40 cents, reaching $5.08 and $5.69, respectively, over the past 60 days. This suggests year-over-year growth rates of 35.5% and 12%, respectively. (See the Zacks Earnings Calendar to stay ahead of market-making news.) Image Source: Zacks Investment Research The Zacks Consensus Estimate for Target's EPS for the current and next fiscal years has fallen by $1.03 and $1.01 to $7.51 and $8.07 over the past 30 days. Image Source: Zacks Investment Research SFM vs. TGT: A Look at YTD Stock Performance Shares of Sprouts Farmers have advanced 27.4% year to date against Target's decline of 29.6%. SFM vs. TGT: A Dive Into Stock Valuation Sprouts Farmers is trading at a forward 12-month price-to-earnings (P/E) ratio of 30.18, below its one-year median of 31.28. Meanwhile, Target's forward P/E ratio stands at 12.32, below its median of 14.45. SFM vs. TGT: Which Is a Better Bet Now? When compared with Target, Sprouts Farmers emerges as the stronger bet in the current retail landscape. SFM's focused execution, disciplined expansion strategy, margin resilience and alignment with rising demand for health-conscious and specialty grocery options give it a distinct edge. While Target continues to invest in innovation and omnichannel capabilities, it remains vulnerable to discretionary spending pressures. SFM sports a Zacks Rank #1 (Strong Buy) at present, while TGT currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Target Corporation (TGT): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report
Yahoo
3 days ago
- Business
- Yahoo
Understanding Tariff Headwinds
This month marks the start of summer trading. Our Chief Equity Strategist and Economist, John Blank, and his stock strategy team here at Zacks has pulled together the major large cap U.S. stocks -- facing 2025 tariff headwinds. John's here now to discuss this. 1. Looks like there are two major areas these stocks fall into, as far as imports and exports are concerned. What are they? 2. What are the top sectors going from Very Attractive to Unattractive that will face these headwinds? 3. Will these headwinds be significant drops in these large caps? 4. Does this surprise you at all? 5. You've written, that there is a sense of relief now about the effects of U.S. tariffs, on the top stocks of the U.S. biggest importers and exporters. But it may also be temporary share price relief. Given recent tariff developments, might it just be temporary amid optimism for potential trade deals? 6. So far, the market's had a muted reaction to the U.S.-China framework deal agreement announced last week. If stocks move higher do you think it'll be as a result of this type of news or positive economic data? 7. Published data reveals that stocks haven't been as expensive, as they are now, compared to bonds, in almost 25 years. Is that a negative for stocks? 8. What strategy should investors use now? Should they be looking at defense stocks on the heels of Middle East Tension escaltions? 9. This month, you chose three large cap stocks with a short-term #1 Rank, and a very attractive long-term Zacks VGM score of A. Sumitomo Corporation SSUMY, Next plc NXGPY and Sprouts Farmers Markets SFM. Our Chief Equity Strategist and Economist, John Blank, on stocks facing tariff headwinds . With John, I'm Terry Ruffolo. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sumitomo Corp. (SSUMY) : Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report Next PLC (NXGPY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11-06-2025
- Business
- Yahoo
Sprouts Farmers (SFM) Stock Slides as Market Rises: Facts to Know Before You Trade
Sprouts Farmers (SFM) closed the latest trading day at $161.88, indicating a -2.33% change from the previous session's end. The stock's performance was behind the S&P 500's daily gain of 0.55%. Meanwhile, the Dow experienced a rise of 0.25%, and the technology-dominated Nasdaq saw an increase of 0.63%. Prior to today's trading, shares of the natural and organic food retailer had gained 5.57% over the past month. This has outpaced the Retail-Wholesale sector's gain of 5.29% and lagged the S&P 500's gain of 6.29% in that time. Investors will be eagerly watching for the performance of Sprouts Farmers in its upcoming earnings disclosure. The company is forecasted to report an EPS of $1.23, showcasing a 30.85% upward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $2.17 billion, indicating a 14.51% upward movement from the same quarter last year. Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.08 per share and revenue of $8.77 billion. These totals would mark changes of +35.47% and +13.65%, respectively, from last year. Investors should also pay attention to any latest changes in analyst estimates for Sprouts Farmers. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability. Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system. The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. As of now, Sprouts Farmers holds a Zacks Rank of #1 (Strong Buy). Digging into valuation, Sprouts Farmers currently has a Forward P/E ratio of 32.64. For comparison, its industry has an average Forward P/E of 20.24, which means Sprouts Farmers is trading at a premium to the group. One should further note that SFM currently holds a PEG ratio of 1.92. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Food - Natural Foods Products industry had an average PEG ratio of 1.69 as trading concluded yesterday. The Food - Natural Foods Products industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 165, placing it within the bottom 33% of over 250 industries. The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-06-2025
- Yahoo
Hammond man accused of arson, attempted murder
HAMMOND, La. (WGNO) — A Hammond man has been arrested after he allegedly set fire to a Hammond-area home with two women inside of it on Wednesday, June 4. According to the Louisiana Office of State Fire Marshal, a fire was reported at a home in the 44000 block of Marie Drive in Hammond. The people inside the home were able to escape safely, and a request was made for SFM deputies to investigate the fire, who determined that it was set intentionally on the front porch. Vacherie man sentenced in murder, attempted murder case Investigators say they then named 36-year-old Kirk Anslem, an ex-boyfriend of one of the occupants, as the suspect. After a pursuit and a manhunt which lasted over 12-hours, Anslem was arrested by the Tangipahoa Parish Sheriff's Office around Pumpkin Center Road. He faces charges of two counts of attempted murder, one count of aggravated arson and a count of cyberstalking. Additionally, from the TPSO, he faces charges of domestic abuse-aggravated battery, resisting an officer and an outstanding failure to appear Court turns away RNC challenge to Pennsylvania ballot ruling Four weeks later, two Orleans Parish jail escapees remain on the loose Some Republicans hope Trump, Musk mend fences after blistering breakup Hot weekend on the way Hammond man accused of arson, attempted murder Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
27-05-2025
- Business
- Yahoo
Sprouts Farmers Market Stock Nears 2 Bullish Trendlines
Grocery chain Sprouts Farmers Market Inc (NASDAQ:SFM) has been chopping higher over the past year, doubling since last May and up 30% in 2025. However, last week, the moved back toward the $160 floor. This dip pushed SFM within one standard deviation of the historically bullish 50-day and 80-day moving averages. Per Schaeffer's Senior Quantitative Analyst Rocky White, SFM has made seven similar approaches to the 50-day trendline and five to the 80-day trendline over the past three years. The stock was higher one month later 71% of the time following the former signal, and 100% following the latter, averaging gains of 6.3% and 7.8%, respectively. A comparable move from SFM's current perch of $164.65 would put the shares as high as $177 by the end of June. The stock has plenty of room for upgrades as well. Heading into today, nine of the 14 analysts in coverage sport a tepid "hold" recommendation. Meanwhile, options are looking like an affordable way to go. This is per SFM's Schaeffer's Volatility Index (SVI) of 36%, which sits in the 23rd percentile of its annual range. Plus, the security's Schaeffer's Volatility Scorecard (SVS) sits at a higher 82 out of 100, meaning it has outperformed options traders' volatility expectations over the past year. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
