Diluted earnings per share reached $1.35, a 44% increase compared to the same period last year.
Gross margin improved by 91 basis points to 38.8%, primarily due to inventory and category management improvements and sales leverage.
Net income was $134 million with an effective tax rate of 26%.
Operating cash flow year-to-date was $410 million, funding $138 million in capital expenditures and $292 million in share repurchases.
SG&A expenses totaled $645 million, with a 33 basis points leverage compared to last year, driven by labor and occupancy efficiencies.
Sprouts ended the quarter with 455 stores across 24 states and $261 million in cash and cash equivalents.
Sprouts reported total sales of $2.2 billion in Q2 2025, a 17% increase year-over-year, driven by a 10.2% comparable store sales increase and strong new store performance.
Adjusted EBITDA increased 9.7% to $150.2 million with a margin rate of 12.4%, up 30 basis points year-over-year.
Comparable store sales increased by 0.4%, marking the first quarterly increase since Q4 fiscal 2022.
Diluted earnings per share increased by 11.5% to $0.58 compared to $0.52 in the same period last year, reaching the high end of expectations.
Effective tax rate increased to 21.8% from 19.8% last year due to decreased excess tax benefits from stock-based compensation.
General and administrative expenses increased 2.6% to $69.4 million, with a decrease in other operating expenses partially offsetting personnel expense increases.
Gross profit rose by 8.5% compared to the same period last year, driven by a 7.1% increase in sales and a 60 basis points improvement in gross margin rate to 43.9%.
Inventory increased 7% sequentially and 17% year-over-year, driven by timing of receipts and support for new Seattle distribution center.
Net interest expense increased 62.3% to $1.1 million due to lower interest capitalized partially offset by higher interest income.
Preopening expenses decreased 51.8% to $5.1 million due to fewer store openings compared to last year.
Sales for the quarter rose by 7.1% to $1.214 billion.
Selling and store operating expenses increased by 10.2% to $376.2 million, primarily due to $33.8 million for new stores.
Unrestricted liquidity ended at $876.9 million, including $176.9 million in cash and $700 million available under ABL facility.
Adjusted EBITDA increased by 190 basis points to 12%, with Nissens contributing significantly to profit gains.
Capital expenditures totaled $19.3 million, including $7 million for the new distribution center, with net debt at $577.8 million and leverage ratio at 3.2x EBITDA.
Cash used in operations improved to $5.9 million from $10.1 million last year, despite higher tariff cash costs.
Engineered Solutions sales declined 8.3% due to softness in end markets, with adjusted EBITDA at 10%, down from last year but still healthy.
Nissens contributed $90.5 million in net sales and $16.3 million in adjusted EBITDA, outperforming expectations with an 18% EBITDA margin.
Standard Motor Products reported a 26.7% increase in consolidated sales for Q2 2025, driven largely by the acquisition of Nissens, with legacy business up 3.5%.
Temperature Control sales increased 5.5%, with adjusted EBITDA margin rising to 16.1% due to higher sales volumes and improved operating expenses.
Vehicle Control segment sales rose 6.9% with adjusted EBITDA margin improving to 10.7%, driven by higher sales and lower factoring expenses despite tariff cost pressures.
Year-to-date sales increased 25.8%, or 4.1% excluding Nissens, with adjusted EBITDA margin up 250 basis points and non-GAAP diluted EPS up 47.9%.
Dafinchi
