Sprouts Farmers Market (SFM): Gross Margin Contraction Shouldn't Be A Surprise - RBC
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RBC Capital analyst, William Kirk, reiterated his Outperform on shares of Sprouts Farmers Market (NASDAQ: SFM) and cut his price target to $29 (from $31) after responding to increased competitor gross margins have are shown to be under pressure.
The analyst found the comparable sales response to elevated price investment encouraging and believes the elasticity on the price investment was strong, and likely ROIC favorable to the alternative of not matching competitor promo.
Despite the pressure today, the analyst is keeping his Outperform on outsized leverage to cycle improving.
Shares of Sprouts Farmers Market closed at $20.03 yesterday.
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