EX-99.1 2 sfm-20241229xex991.htm EX-99.1 Document

Exhibit 99.1
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Investor Contact: Media Contact:
Susannah Livingston media@sprouts.com
(602) 682-1584
susannahlivingston@sprouts.com
Sprouts Farmers Market, Inc. Reports Fourth Quarter and Full Year 2024 Results
PHOENIX, Ariz. – (Business Wire) – February 20, 2025 – Sprouts Farmers Market, Inc. (Nasdaq: SFM) today reported results for the 13-week fourth quarter and 52-week year ending December 29, 2024.
“2024 was a remarkable year for our company," said Jack Sinclair, chief executive officer of Sprouts Farmers Market. “Our teams across the business delivered on our strategy and set us up for even greater success in the future. Our unique, attribute-driven offering resonates more than ever with our target customers. They trust Sprouts as a partner on their healthy living journey, and it shows in our results. I’m grateful to our team members for their hard work, and we are excited for 2025 and the years ahead.”
Fourth Quarter Highlights:
•Net sales totaled $2.0 billion; a 18% increase from the same period in 2023
•Comparable store sales growth of 11.5%
•Diluted earnings per share of $0.79; compared to diluted earnings per share of $0.49 in the same period in 2023
•Opened 12 new stores
Full Year Highlights:
•Net sales totaled $7.7 billion; a 13% increase from the same period in 2023
•Comparable store sales growth of 7.6%
•Diluted earnings per share of $3.75; compared to diluted earnings per share of $2.50 and Adjusted diluted earnings per share of $2.84(1) in the same period in 2023
•Opened 33 new stores, resulting in 440 stores in 24 states as of December 29, 2024
(1)Adjusted diluted earnings per share, a non-GAAP financial measure, excludes the impact of certain special items. For the fifty-two weeks ended December 29, 2024, there were no adjustments due to special items. See the “Non-GAAP Financial Measures” section of this release for additional information about this item.
Leverage and Liquidity in 2024
•Ended the quarter with $265 million in cash and cash equivalents and zero balance on its $700 million revolving credit facility after a $125 million voluntary pay down
•Authorized a new $600 million share buyback program and repurchased 2.7 million shares of common stock for a total investment of $238 million, excluding excise tax
•Generated cash from operations of $645 million and invested $200 million in capital expenditures, net of landlord reimbursement



First Quarter and Full-Year 2025 Outlook
The following provides information on our first quarter 2025 outlook:
•Comparable store sales growth: 10% to 11%
•Adjusted diluted earnings per share: $1.51 to $1.55
The following provides information on our full-year 2025 outlook:
•Net sales growth: 10.5% to 12.5%
•Comparable store sales growth: 4.5% to 6.5%
•Adjusted EBIT: $590 million to $610 million
•Adjusted diluted earnings per share: $4.52 to $4.68
•Unit growth: At least 35 new stores
•Capital expenditures (net of landlord reimbursements): $230 million to $250 million
Fourth Quarter and Full Year 2024 Conference Call
Sprouts will hold a conference call at 5:00 p.m. Eastern Time on Thursday, February 20, 2025, during which Sprouts executives will further discuss fourth quarter and full year 2024 financial results.
A webcast of the conference call will be available through Sprouts’ investor relations webpage, accessible via the following link. Participants should register on the website approximately ten minutes prior to the start of the webcast.
A webcast replay will be available at approximately 8:00 p.m. Eastern Time on February 20, 2025. This can be accessed with the following link.
Important Information Regarding Outlook
There is no guarantee that Sprouts will achieve its projected financial expectations, which are based on management estimates, currently available information and assumptions that management believes to be reasonable. These expectations are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. See “Forward-Looking Statements” below.
Forward-Looking Statements
Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact (including, but not limited to, statements to the effect that Sprouts Farmers Market or its management "anticipates," "plans," "estimates," "expects," or "believes," or the negative of these terms and other similar expressions) should be considered forward-looking statements, including, without limitation, statements regarding the company’s outlook, growth, opportunities and long-term strategy. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this release. These risks and uncertainties include, without limitation, the company’s ability to execute on its long-term strategy; the company’s ability to successfully compete in its competitive industry; the company’s ability to successfully open new stores; the company’s ability to manage its growth; the company’s ability to maintain or improve its operating margins; the company’s ability to identify and react to trends in consumer preferences; product supply disruptions; equipment supply disruptions; general economic conditions that impact consumer spending or result in competitive responses; accounting standard changes; the current inflationary environment and future potential inflationary and/or deflationary trends; tariffs; and other factors as set forth from time to time in the company’s Securities and Exchange Commission filings, including, without limitation, the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The company intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more information becomes available, except as required by law.


Corporate Profile
True to its farm-stand heritage, Sprouts offers a unique grocery experience featuring an open layout with fresh produce at the heart of the store. Sprouts inspires wellness naturally with a carefully curated assortment of better-for-you products paired with purpose-driven people. The healthy grocer continues to bring the latest in wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based and gluten-free. Headquartered in Phoenix, and one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States, Sprouts employs approximately 35,000 team members and operates more than 440 stores in 24 states nationwide. To learn more about Sprouts, and the good it brings communities, visit sprouts.com/about.


SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Thirteen Weeks endedFifty-Two Weeks ended
December 29, 2024December 31, 2023December 29, 2024December 31, 2023
Net sales$1,996,228 $1,698,545 $7,719,290 $6,837,384 
Cost of sales1,236,338 1,078,172 4,777,799 4,315,543 
Gross profit759,890 620,373 2,941,491 2,521,841 
Selling, general and administrative expenses614,880 513,476 2,291,350 2,000,437 
Depreciation and amortization (exclusive of depreciation included in cost of sales)34,619 32,059 132,748 131,893 
Store closure and other costs, net3,928 5,400 12,896 39,280 
Income from operations106,463 69,438 504,497 350,231 
Interest (income) expense, net(1,819)433 (2,201)6,491 
Income before income taxes108,282 69,005 506,698 343,740 
Income tax provision28,680 18,956 126,097 84,884 
Net income$79,602 $50,049 $380,601 $258,856 
Net income per share:
Basic$0.80 $0.49 $3.79 $2.53 
Diluted$0.79 $0.49 $3.75 $2.50 
Weighted average shares outstanding:
Basic99,820101,383100,363102,479
Diluted101,020102,207101,379103,390


SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
December 29, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$265,159 $201,794 
Accounts receivable, net30,901 30,313 
Inventories343,329 323,198 
Prepaid expenses and other current assets36,131 48,467 
Total current assets675,520 603,772 
Property and equipment, net of accumulated depreciation895,189 798,707 
Operating lease assets, net1,466,903 1,322,854 
Intangible assets208,094 208,060 
Goodwill381,750 381,741 
Other assets13,243 12,294 
Total assets$3,640,699 $3,327,428 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$213,414 $179,927 
Accrued liabilities216,842 164,887 
Accrued salaries and benefits97,991 74,752 
Current portion of operating lease liabilities150,400 126,271 
Current portion of finance lease liabilities1,321 1,032 
Total current liabilities679,968 546,869 
Long-term operating lease liabilities1,520,272 1,399,676 
Long-term debt and finance lease liabilities7,248 133,685 
Other long-term liabilities38,259 36,270 
Deferred income tax liability73,059 62,381 
Total liabilities2,318,806 2,178,881 
Commitments and contingencies
Stockholders’ equity:
Undesignated preferred stock; $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding— — 
Common stock, $0.001 par value; 200,000,000 shares authorized, 99,255,036 shares issued and outstanding, December 29, 2024; 101,211,984 shares issued and outstanding, December 31, 202399 101 
Additional paid-in capital808,140 774,834 
Retained earnings513,654 373,612 
Total stockholders’ equity1,321,893 1,148,547 
Total liabilities and stockholders’ equity$3,640,699 $3,327,428 


SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Fifty-Two Weeks ended
December 29, 2024December 31, 2023
Operating activities
Net income$380,601 $258,856 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense140,164 137,811 
Operating lease asset amortization133,923 127,208 
Impairment of assets406 30,549 
Share-based compensation28,417 18,898 
Deferred income taxes10,691 (4,915)
Other non-cash items5,610 1,086 
Changes in operating assets and liabilities, net of effects from acquisition:
Accounts receivable30,007 3,173 
Inventories(20,131)(10,857)
Prepaid expenses and other current assets11,903 2,210 
Other assets(45)3,482 
Accounts payable27,986 12,215 
Accrued liabilities39,305 11,746 
Accrued salaries and benefits23,240 12,880 
Operating lease liabilities(168,538)(138,795)
Other long-term liabilities1,675 (479)
Cash flows from operating activities645,214 465,068 
Investing activities
Purchases of property and equipment(230,375)(225,310)
Payments for acquisition, net of cash acquired— (13,032)
Cash flows used in investing activities(230,375)(238,342)
Financing activities
Payments on revolving credit facilities(125,000)(125,000)
Payments on finance lease liabilities(1,148)(1,006)
Repurchase of common stock(228,472)(203,496)
Payments of excise tax on repurchases of common stock(1,766)— 
Proceeds from exercise of stock options4,890 11,454 
Cash flows used in financing activities(351,496)(318,048)
Increase/(Decrease) in cash, cash equivalents, and restricted cash63,343 (91,322)
Cash, cash equivalents, and restricted cash at beginning of the period203,870 295,192 
Cash, cash equivalents, and restricted cash at the end of the period$267,213 $203,870 


Non-GAAP Financial Measures
In addition to reporting financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), the company presents Adjusted gross margin, Adjusted EBITDA, Adjusted EBIT, and Adjusted diluted earnings per share. These measures are not in accordance with, and are not intended as alternatives to, GAAP. The company's management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the company, and certain of these measures may be used as components of incentive compensation.
The company defines EBITDA as net income before interest expense, provision for income tax, and depreciation, amortization and accretion. Adjusted gross margin, Adjusted EBITDA, Adjusted EBIT and Adjusted diluted earnings per share exclude the impact of certain specified special items. The Company reported these adjusted measures to provide additional information with respect to the impact of store closure costs and certain other items during the thirteen and fifty-two weeks ended December 31, 2023. There were no such material adjustments during the thirteen and fifty-two weeks ended December 29, 2024.
Non-GAAP measures are intended to provide additional information only and do not have any standard meanings prescribed by GAAP. Use of these terms may differ from similar measures reported by other companies. Because of their limitations, non-GAAP measures should not be considered as a measure of discretionary cash available to use to reinvest in the growth of the company’s business, or as a measure of cash that will be available to meet the company’s obligations. Each non-GAAP measure has its limitations as an analytical tool, and they should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP.
The following table shows a reconciliation of (i) Adjusted gross margin to gross margin, (ii) Adjusted EBITDA and Adjusted EBIT to net income and (iii) Adjusted diluted earnings per share to diluted earnings per share, in each case, for the thirteen and fifty-two weeks ended December 29, 2024 and December 31, 2023:



SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NON-GAAP MEASURE RECONCILIATION
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Thirteen Weeks endedFifty-Two Weeks ended
December 29, 2024December 31, 2023December 29, 2024December 31, 2023
Gross profit$759,890 $620,373 $2,941,491 $2,521,841 
Special items (1)
— — — 2,955 
Adjusted gross profit$759,890 $620,373 $2,941,491 $2,524,796 
Gross margin38.1 %36.5 %38.1 %36.9 %
Adjusted gross margin38.1 %36.5 %38.1 %36.9 %
Net income$79,602 $50,049 $380,601 $258,856 
Income tax provision28,680 18,956 126,097 84,884 
Interest (income) expense, net(1,819)433 (2,201)6,491 
Earnings before interest and taxes (EBIT)106,463 69,438 504,497 350,231 
Special items (2)
— — — 46,034 
Adjusted EBIT106,463 69,438 504,497 396,265 
Depreciation, amortization and accretion, adjusted for special items36,283 34,144 140,164 131,933 
Adjusted EBITDA$142,746 $103,582 $644,661 $528,198 
Net income$79,602 $50,049 $380,601 $258,856 
Special items, net of tax (2)
— — — 34,272 
Adjusted net income$79,602 $50,049 $380,601 $293,128 
Diluted earnings per share$0.79 $0.49 $3.75 $2.50 
Adjusted diluted earnings per share$0.79 $0.49 $3.75 $2.84 
Diluted weighted average shares outstanding101,020102,207101,379103,390
(1)For the fifty-two weeks ended December 29, 2024, there were no special items. For the fifty-two weeks ended December 31, 2023, special items included approximately $3 million in Cost of sales related to store closures and our supply chain transition.
(2)For the fifty-two weeks ended December 29, 2024, there were no special items. For the fifty-two weeks ended December 31, 2023, special items included approximately $28 million in Store Closure and other costs, net primarily related to impairment charges and $6 million in Depreciation and amortization (exclusive of depreciation in cost of sales) for accelerated depreciation in connection with store closures, $9 million in Selling, general and administrative expenses related to store closures, our supply chain transition and acquisition related costs, and $3 million in Cost of sales related to store closures and our supply chain transition. After-tax impact included the tax benefit on the pre-tax charge.
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Source: Sprouts Farmers Market, Inc
Phoenix, AZ
2/20/25