Shares of Sprouts Farmers Market (SFM) plummeted 24.63% in pre-market trading on Thursday, following the release of the company's third-quarter earnings report and disappointing fourth-quarter guidance. Despite beating earnings expectations for Q3, investors focused on the organic grocery chain's weaker-than-anticipated outlook for the upcoming quarter and full year.

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, same-store sales growth of 5.9% missed Wall Street's projection of 7.4%.

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 deceleration from the 5.9% growth achieved in Q3. For the full year 2025, the company now anticipates earnings per share between $5.24 and $5.28, also falling short of analysts' expectations of $5.31.

These projections suggest that Sprouts may face challenges in maintaining its growth momentum in an increasingly competitive grocery retail environment. The company's cautious outlook for the fourth quarter, traditionally a strong period for retailers, has raised concerns among investors about Sprouts' ability to sustain its previous growth trajectory. As a result, the stock experienced a significant sell-off in pre-market trading, reflecting the market's reassessment of the company's near-term prospects.