Shares of Sprouts Farmers Market (SFM) plummeted 24.63% in pre-market trading on Thursday, following the release of its third-quarter earnings report and disappointing fourth-quarter guidance. Despite beating earnings expectations, the organic grocery chain's weaker-than-anticipated outlook triggered a significant sell-off.

For the third quarter, Sprouts reported earnings per share of $1.22, surpassing the analyst consensus estimate of $1.17. However, quarterly sales of $2.200 billion fell short of the expected $2.225 billion. While the company saw a 13.07% increase in sales compared to the same period last year, investors focused on the lackluster guidance for the upcoming quarter and full year.

The primary catalyst for the stock's sharp decline was Sprouts' projection for fourth-quarter comparable store sales growth of just 0.0% to 2.0%, a significant deceleration from the 5.9% growth achieved in Q3. Additionally, the company's fourth-quarter earnings guidance of $0.86 to $0.90 per share fell well below the FactSet estimate of $0.98. For the full year 2025, Sprouts now expects earnings per share in the range of $5.24 to $5.28, also below analysts' expectations of $5.31.

These projections suggest that Sprouts may be facing challenges in maintaining its growth momentum in an increasingly competitive grocery retail environment. The market's negative reaction reflects concerns about the company's ability to sustain its performance in the face of potential headwinds in the retail sector.