Burry increases long position in mid cap Sprouts Farmers Market after selloff

Famed short seller and investor Michael Burry, the hero of the movie "The Big Short," has increased his stake in organic grocer Sprouts Farmers Market. He has been adding to the position for several months. 

Burry believes rising rates have triggered an indiscriminate selloff in consumer stocks, creating a buying opportunity in Sprouts. He expects its premium positioning, loyal high-end customers, steady share buybacks, and above-normal returns on capital to support the stock over the long term.

“I bought more Sprouts here in the $63s,” investor Michael Burry wrote in a post on his Substack on Monday. He did not disclose how many shares he purchased, but said he paid in the $63s, which is roughly in line with the current market price. On Monday, the stock rebounded 1.5% to $63.45 per share, which lifted it back above its lowest level since May 2024, reached on Friday.

Investors have begun selling consumer stocks because interest rates are rising, Burry explains. In mid-September, the Fed raised its benchmark rate by a quarter percentage point, its first hike in three years.

Burry believes “these new lows could continue,” but that the stock should perform well over the long term. “I appreciate Sprouts’s positioning in the grocery space. It has a dedicated high end clientele,” Burry reckons. He also noted that the retailer consistently buys back shares. Sprouts announced its latest authorization, for up to $1 billion, in August 2025. At the same time, the company continues to generate above-normal return on investment and return on equity, Burry wrote.

Burry has been buying Sprouts shares for several months, after the stock plunged from a peak of $182 per share reached in June 2025. “I finally ramped up my position in Sprouts Farmers’ Markets... This is now a low normal position size – about 3%,” he wrote in April. At the time, he also noted that the stock had moved “too far ahead of itself” and that he was “glad it came back.”

The stock currently trades at just 12 times forecast earnings for this year, Motley Fool contributor Billy Duberstein writes. Sprouts’ comparable-store sales fell 1% year over year in the second quarter. That marked a sharp reversal from the same period of 2025, when the company reported comparable-store sales growth of 10.2%, Duberstein notes. The management attributed the decline to a high base from early 2025, when supply-chain disruptions pushed some customers from other stores to Sprouts. It also linked the current weakness to the Iran conflict, saying it fueled inflation and made consumers more cautious about spending.

Wall Street remains broadly upbeat on Sprouts as an equity investment. It has 11 “buy” calls, seven “hold” ratings, and two “sell” recommendations, according to MarketWatch data. The average target price is $95.40 per share, 50% above the last close.