Shares of Sprouts Farmers Market (SFM) plummeted 23.96% in a 24-hour period on Wednesday, as investors reacted negatively to the company's fourth-quarter guidance despite beating earnings expectations for the third quarter. The significant drop came after the organic grocery chain released its financial results and outlook, which fell short of analyst projections.

In its third-quarter report, Sprouts Farmers Market posted earnings per share of $1.22, surpassing the analyst consensus estimate of $1.17. This represented a 34.07% increase from the same period last year. However, the company's quarterly sales of $2.200 billion missed analyst expectations of $2.225 billion by 1.08%, despite showing a 13.07% year-over-year increase. The company's same-store sales growth of 5.9% also fell short of the 7.4% growth Wall Street had projected.

The primary catalyst for the stock's sharp decline was Sprouts' disappointing guidance for the fourth quarter and full year 2025. The company expects Q4 earnings per share in the range of $0.86 to $0.90, significantly below the FactSet estimate of $0.98. Additionally, Sprouts forecasts Q4 comparable store sales growth of just 0% to 2%, a substantial slowdown compared to the 5.9% growth achieved in Q3. For the full year 2025, the company anticipates earnings per share between $5.24 and $5.28, lower than analysts' expectations of $5.31. These projections suggest that Sprouts may face challenges in maintaining its growth trajectory in the near term, prompting investors to reassess their positions in the stock.