No qualifying author-owned investment thesis was confirmed in this post.
The author explicitly asks for an opinion rather than expressing their own directional investment judgment, and the proposed idea is labeled as a watch candidate.
Score3
Comments17
▶ Full Post Text
$SFM seemed to have a decent 3Q in 2025.
* **Total Sales:** $2.2 billion, up 13% year-over-year.
* **Comparable Store Sales:** Increased by 5.9%.
* **E-commerce Sales:** Grew 21%, representing 15.5% of total sales.
* **Gross Margin:** 38.7%, an increase of 60 basis points from the previous year.
* **Share Repurchase:** $342 million returned to shareholders, 2.4 million shares repurchased.
* **Full Year Sales Growth Expectation:** Approximately 14%.
* **Full Year Comp Sales Expectation:** Approximately 7%.
* **Full Year Earnings Per Share Expectation:** Between $5.24 and $5.28.
Yet the stock has declined, albeit from an overvalued state. It wasn't all good to Q3. They were selling fewer items per customer (which is a concern). As they said in their earnings call "Together, these achievements demonstrate the strength of our teams and the durability of our strategy. While it was a solid third quarter, it fell short of our top-line expectations."
The concern is that this might continue, or decline. Future guidance was not too optimistic. They warned of slowing same store sales growth, estimating it at 2%, which with inflation is basically flat. Competition in that sector is always high. The anticipated level was 4.5%. Not good.
They have opened their first store in New York State and have plans for others. Management is buying back shares. They report on the 19th of this month.
Is it a buy at this price ($65-$68) or am I missing something?