Shares of Sprouts Farmers Market (SFM) plunged 23.96% in a 24-hour period following the release of its third-quarter earnings report and disappointing fourth-quarter guidance. Despite beating earnings expectations, the company's revenue miss and lackluster outlook for the upcoming quarter triggered a significant sell-off in after-hours trading.

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 weaker-than-anticipated guidance for the fourth quarter and full year.

The most concerning factor for investors 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.