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Negative inflection · Case study

Sprouts: incentive emails surged ahead of a comp reversal

Through the first quarter of 2026, Sprouts sent about twice last year's promotional email and roughly 18 times the incentive promotions. On April 29 it reported comparable store sales of −1.7%, against +11.7% a year earlier, and guided the second quarter to −2% to 0%.

SFM▲ Promotions intensifyingRandom WalkApr 2026
~18xincentive promotion volume, Jan 5–Apr 5, 2026 vs the same weeks of 2025 (31.4M vs 1.7M)
+947%incentive promotions in the week to Apr 5 vs last year, in our April 5 ensemble report
−1.7% vs +11.7%Q1 comparable store sales, 2026 vs 2025

What changed

Sprouts has historically leaned on product and discovery messaging rather than price. In early 2026 that changed. Promotional email volume roughly doubled year over year from the first week of January, and emails carrying an incentive, such as a percent or dollar discount, went from a trickle to a weekly fixture.

Over the 13 weeks from January 5 to April 5, 2026, Sprouts sent 127M promotional emails against 65M in the same weeks of 2025. Incentive promotions rose to 31.4M from 1.7M.

Exhibit 1 · Measures of promotional activity, last week vs prior year (ensemble report, data through Apr 5, 2026)
MeasureLast week vs PYRead
Total email volume+236.7%▲ Intensifying
Incentive promotions+947.0%▲ Intensifying
Steep discountsn.a.No steep campaigns either year
Discount index28.7, +947.0%Index normalized to 100 per brand
Exhibit 2 · Weekly promotional email volume, Jan 5 – Apr 5
7M14MJan 5Feb 2Mar 2Mar 30
20252026
Exhibit 3 · Weekly incentive promotion volume, Jan 5 – Apr 5
3.5M7MJan 5Feb 2Mar 2Mar 30
20252026
What our ensemble found

More offers, still shallow

  1. 01
    Volume doubled from JanuaryPromotional sends ran about 2x last year in nearly every week of the quarter, peaking at 12.8M the week of March 23.
  2. 02
    Incentives became routineIncentive promotions topped 5M in three separate weeks, against a 2025 weekly high of 0.3M.
  3. 03
    Depth barely movedAverage discount stayed at 2–3% each quarter, versus 1% a year earlier. Sprouts widened offers to more customers rather than cutting deeper.
Exhibit 4 · Average discount on promotional email, by quarter
QuarterAvg discountPrior yearDiff
2025 Q22%1%+1 pt
2025 Q31%1%0
2025 Q42%2%0
2026 Q12%1%+1 pt
2026 Q2 (to Apr 5)3%1%+2 pts
The outcome

Comps turned negative and the outlook reset

Sprouts reported its first quarter on April 29, 2026. After a year of double-digit comparable sales growth, comps fell 1.7%, and management guided the second quarter lower still.

Exhibit 5 · Sprouts Q1 2026 vs Q1 2025, and outlook
Metric20252026
Q1 comparable store sales+11.7%(1.7)%
Q1 net sales growth+19%+4%
Q1 diluted EPS$1.81$1.71
Full-year comp outlook (given in April)+5.5% to +7.5%(1)% to +1%
Q2 comp outlook—(2)% to 0%
"We remain confident in our long-term potential and expect sequential improvement in the business throughout 2026 as we reaccelerate growth."Jack Sinclair, CEO, Q1 2026 results
Conclusion

Paying for traffic

A grocer known for discovery rather than price doubled its email and multiplied incentive offers through a quarter that ended in negative comps. The offers stayed shallow, which kept margin damage small, but the volume of incentives showed Sprouts working harder for each visit weeks before the print.

Email figures from Random Walk promotional email data (RW MCP) and the Random Walk Promotional Analysis Ensemble report for SFM, data through Apr 5, 2026; weeks of Jan 5–Apr 5, 2026 vs the same ISO weeks of 2025. Financials from Sprouts' Q1 2026 results (Apr 29, 2026) and Q1 2025 results (Apr 30, 2025). Not investment advice.

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