**Position**: Posting again, with position ($15k short bet) as requested by Moderator (thank you for your support):
https://preview.redd.it/7nxxmrtkyxge1.png?width=1027&format=png&auto=webp&s=78d79580759c34db6689269a7adc1d0633314532
**Update** **#1** \- The Mexico tariffs are supposedly delayed by a month, which was the main catalyst here
**Idea**: Hear me out, with the new Trump tariffs, produce from Mexico (which is the majority of American produce) will be tariffed 25%, heavily increasing the cost of produce.
Sprouts is on a massive run (up 200% year-over-year) selling expensive produce to consumers. If the Trump tariffs stand, produce imported from Mexico will cost 25-30% more, and this is the main cost that Sprouts has, their product. The company has performed incredibly well on increased margins, but how well will these margins hold up when they're trying not to increase the cost of their goods to consumers by 25-30% immediately against last week.
Their margins could shrink substantially, as consumers push back on 30% increases to Produce, and the 200% stock run could evaporate with deep downside. These are the results that have already brought a massive upswing:
https://preview.redd.it/2m8mfw2iyxge1.png?width=721&format=png&auto=webp&s=a992c95ecb84235c9cca437b2fcca68563c42ae9
This compares to other stocks like Ford, GM, Nutrien which are already trading down on the news. Will this elevated margin really be able to sustain itself?