The $1 billion repurchase will thin the capital base, so with the same net‑income the earnings‑per‑share (EPS) will rise automatically. A $1 bn buy‑back at today’s market price (≈ $30) would retire roughly 33 million shares, cutting the share count from about 140 MM to ~107 MM. Even if SFM’s quarterly net income stays flat, EPS would jump by roughly 30 % (≈ $0.90 → $1.17). Because the market price is expected to be buoyed by the buy‑back, the forward P/E will likely hold steady or even compress a bit—i.e., a higher EPS with a price that does not fully scale up will push the multiple lower, making the stock look cheaper on a earnings basis. The same mechanics apply to other ratios: price‑to‑book and EV/EBITDA will fall as the denominator (shares or book value per share) shrinks, while the enterprise value is only modestly affected by the cash outlay.
From a trading perspective the market will price‑in the buy‑back gradually as SFM executes open‑market purchases. Historically, large repurchase authorizations generate a “buy‑back‑bias” rally, especially in a sector‑neutral environment. Technically, SFM has been holding a tight range around $28‑$32; the next breakout above $32 on volume would be a strong entry signal, while a pull‑back to the 20‑day moving average (~$29.5) could offer a lower‑risk buying opportunity. Watch for quarterly updates on the repurchase progress—each disclosed tranche of purchases tends to give a short‑term boost to the stock, and a rising EPS trajectory will likely trigger a re‑rating by analysts, further supporting price. In short, the $1 bn buy‑back should lift EPS, compress valuation multiples, and create a bullish backdrop for the stock; positioning ahead of the first disclosed repurchase wave (or on a technical breakout) is the most actionable play.