Book Online or Call 1-855-SAUSALITO

Sign In  |  Register  |  About Sausalito  |  Contact Us

Sausalito, CA
September 01, 2020 1:41pm
7-Day Forecast | Traffic
  • Search Hotels in Sausalito

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Sprouts Farmers Market, Inc. Reports Third Quarter 2023 Results

Sprouts Farmers Market, Inc. (Nasdaq: SFM) today reported results for the 13-week third quarter ended October 1, 2023.

"We are pleased to report another solid quarter at Sprouts, with continued increases in both traffic and comparable store sales," said Jack Sinclair, chief executive officer of Sprouts Farmers Market. "Our results signal the alignment of our 31,000 team members across merchandising, marketing, supply chain, and operational initiatives-- propelling our strategy forward."

Third Quarter Highlights:

  • Net sales totaled $1.7 billion; a 7.6% increase from the same period in 2022
  • Comparable store sales growth of 3.9%
  • Diluted earnings per share of $0.64; Adjusted diluted earnings per share of $0.65(1); compared to diluted earnings per share of $0.61 in the same period in 2022.
  • Opened 10 new stores, resulting in 401 stores in 23 states as of October 1, 2023

(1) Adjusted diluted earnings per share, a non-GAAP financial measure, excludes the impact of certain special items. See the “Non-GAAP Financial Measures” section of this release for additional information about this item.

Leverage and Liquidity in Third Quarter 2023

  • Ended the quarter with $252 million in cash and cash equivalents and a $150 million balance on its $700 million revolving credit facility
  • Repurchased 831 thousand shares of common stock for a total investment of $32 million
  • Generated cash from operations of $409 million and invested $157 million in capital expenditures, net of landlord reimbursement, year-to-date thru October 1, 2023

Fourth Quarter and Full-Year 2023 Outlook

The following provides information on our fourth quarter 2023 outlook:

  • Comparable store sales growth: approximately 3%
  • Adjusted diluted earnings per share: $0.42 to $0.46

The following provides information on our full-year 2023 outlook:

  • Net sales growth: 6.5% to 7%
  • Comparable store sales growth: approximately 3%
  • Adjusted EBIT: $387 million to $393 million
  • Adjusted diluted earnings per share: $2.77 to $2.81
  • Unit growth: 30 new stores
  • Capital expenditures (net of landlord reimbursements): $190 million to $210 million

Third Quarter 2023 Conference Call

Sprouts will hold a conference call at 10:30 a.m. Eastern Daylight Time on Tuesday, October 31, 2023, during which Sprouts executives will further discuss third quarter 2023 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 1:30 p.m. Eastern Daylight Time on October 31, 2023. 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; the impact of the COVID-19 pandemic; 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 31,000 team members and operates more than 400 stores in 23 states nationwide. To learn more about Sprouts, and the good it brings communities, visit about.sprouts.com.

 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

 

Thirteen weeks ended

 

 

Thirty-nine weeks ended

 

 

 

October 1, 2023

 

 

October 2, 2022

 

 

October 1, 2023

 

 

October 2, 2022

 

Net sales

 

$

1,713,282

 

 

$

1,591,026

 

 

$

5,138,839

 

 

$

4,827,669

 

Cost of sales

 

 

1,087,848

 

 

 

1,007,376

 

 

 

3,237,371

 

 

 

3,051,914

 

Gross profit

 

 

625,434

 

 

 

583,650

 

 

 

1,901,468

 

 

 

1,775,755

 

Selling, general and administrative expenses

 

 

502,801

 

 

 

460,834

 

 

 

1,486,961

 

 

 

1,382,854

 

Depreciation and amortization (exclusive of depreciation included in cost of sales)

 

 

31,802

 

 

 

30,313

 

 

 

99,834

 

 

 

93,377

 

Store closure and other costs, net

 

 

3,176

 

 

 

2,164

 

 

 

33,880

 

 

 

3,034

 

Income from operations

 

 

87,655

 

 

 

90,339

 

 

 

280,793

 

 

 

296,490

 

Interest expense, net

 

 

1,698

 

 

 

1,951

 

 

 

6,058

 

 

 

7,648

 

Income before income taxes

 

 

85,957

 

 

 

88,388

 

 

 

274,735

 

 

 

288,842

 

Income tax provision

 

 

20,644

 

 

 

22,648

 

 

 

65,928

 

 

 

72,798

 

Net income

 

$

65,313

 

 

$

65,740

 

 

$

208,807

 

 

$

216,044

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.64

 

 

$

0.61

 

 

$

2.03

 

 

$

1.98

 

Diluted

 

$

0.64

 

 

$

0.61

 

 

$

2.01

 

 

$

1.97

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

101,881

 

 

 

107,229

 

 

 

102,844

 

 

 

109,066

 

Diluted

 

 

102,703

 

 

 

108,095

 

 

 

103,758

 

 

 

109,888

 

 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

 

 

October 1, 2023

 

 

January 1, 2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

251,780

 

 

$

293,233

 

Accounts receivable, net

 

 

16,203

 

 

 

16,108

 

Inventories

 

 

323,662

 

 

 

310,545

 

Prepaid expenses and other current assets

 

 

28,906

 

 

 

53,918

 

Total current assets

 

 

620,551

 

 

 

673,804

 

Property and equipment, net of accumulated depreciation

 

 

773,072

 

 

 

722,241

 

Operating lease assets, net

 

 

1,294,270

 

 

 

1,106,524

 

Intangible assets

 

 

208,060

 

 

 

184,960

 

Goodwill

 

 

381,741

 

 

 

368,878

 

Other assets

 

 

12,814

 

 

 

13,973

 

Total assets

 

$

3,290,508

 

 

$

3,070,380

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

190,133

 

 

$

172,904

 

Accrued liabilities

 

 

175,769

 

 

 

151,306

 

Accrued salaries and benefits

 

 

66,380

 

 

 

61,574

 

Current portion of operating lease liabilities

 

 

108,225

 

 

 

135,584

 

Current portion of finance lease liabilities

 

 

1,038

 

 

 

1,012

 

Total current liabilities

 

 

541,545

 

 

 

522,380

 

Long-term operating lease liabilities

 

 

1,382,937

 

 

 

1,145,173

 

Long-term debt and finance lease liabilities

 

 

158,936

 

 

 

258,902

 

Other long-term liabilities

 

 

38,009

 

 

 

36,340

 

Deferred income tax liability

 

 

54,072

 

 

 

61,123

 

Total liabilities

 

 

2,175,499

 

 

 

2,023,918

 

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, 101,623,482 shares issued and outstanding, October 1, 2023; 105,072,756 shares issued and outstanding, January 1, 2023

 

 

101

 

 

 

105

 

Additional paid-in capital

 

 

768,057

 

 

 

726,345

 

Retained earnings

 

 

346,851

 

 

 

320,012

 

Total stockholders' equity

 

 

1,115,009

 

 

 

1,046,462

 

Total liabilities and stockholders' equity

 

$

3,290,508

 

 

$

3,070,380

 

 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN THOUSANDS)

 

 

 

Thirty-nine weeks ended

 

 

 

October 1, 2023

 

 

October 2, 2022

 

Operating activities

 

 

 

 

 

 

Net income

 

$

208,807

 

 

$

216,044

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization expense

 

 

103,668

 

 

 

96,057

 

Operating lease asset amortization

 

 

94,403

 

 

 

87,316

 

Impairment of assets

 

 

27,845

 

 

 

171

 

Share-based compensation

 

 

14,731

 

 

 

11,672

 

Deferred income taxes

 

 

(13,225

)

 

 

1,025

 

Other non-cash items

 

 

596

 

 

 

404

 

Changes in operating assets and liabilities, net of effects from acquisition:

 

 

 

 

 

 

Accounts receivable

 

 

10,070

 

 

 

16,491

 

Inventories

 

 

(11,322

)

 

 

(36,280

)

Prepaid expenses and other current assets

 

 

21,093

 

 

 

(7,880

)

Other assets

 

 

3,870

 

 

 

1,678

 

Accounts payable

 

 

27,446

 

 

 

23,121

 

Accrued liabilities

 

 

19,027

 

 

 

2,482

 

Accrued salaries and benefits

 

 

4,509

 

 

 

(4,868

)

Operating lease liabilities

 

 

(103,787

)

 

 

(99,055

)

Other long-term liabilities

 

 

1,294

 

 

 

(1,588

)

Cash flows from operating activities

 

 

409,025

 

 

 

306,790

 

Investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(165,016

)

 

 

(80,749

)

Payments for acquisition, net of cash acquired

 

 

(13,032

)

 

 

 

Cash flows used in investing activities

 

 

(178,048

)

 

 

(80,749

)

Financing activities

 

 

 

 

 

 

Proceeds from revolving credit facilities

 

 

 

 

 

62,500

 

Payments on revolving credit facilities

 

 

(100,000

)

 

 

(62,500

)

Payments on finance lease liabilities

 

 

(749

)

 

 

(600

)

Payments of deferred financing costs

 

 

 

 

 

(3,373

)

Repurchase of common stock

 

 

(180,415

)

 

 

(155,094

)

Proceeds from exercise of stock options

 

 

8,844

 

 

 

4,074

 

Cash flows used in financing activities

 

 

(272,320

)

 

 

(154,993

)

(Decrease)/Increase in cash, cash equivalents, and restricted cash

 

 

(41,343

)

 

 

71,048

 

Cash, cash equivalents, and restricted cash at beginning of the period

 

 

295,192

 

 

 

247,004

 

Cash, cash equivalents, and restricted cash at the end of the period

 

$

253,849

 

 

$

318,052

 

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 has begun reporting these adjusted measures to provide additional information with respect to the impact of store closure costs and certain other items during the thirteen and thirty-nine weeks ended October 1, 2023. There were no such material adjustments during the thirteen and thirty-nine weeks ended October 2, 2022.

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 thirty-nine weeks ended October 1, 2023 and October 2, 2022:

 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

NON-GAAP MEASURE RECONCILIATION

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

 

Thirteen weeks ended

 

 

Thirty-nine weeks ended

 

 

 

October 1, 2023

 

 

October 2, 2022

 

 

October 1, 2023

 

 

October 2, 2022

 

Gross profit

 

$

625,434

 

 

$

583,650

 

 

$

1,901,468

 

 

$

1,775,755

 

Special items (1)

 

 

1,302

 

 

 

 

 

 

2,955

 

 

 

 

Adjusted gross profit

 

$

626,736

 

 

$

583,650

 

 

$

1,904,423

 

 

$

1,775,755

 

Gross margin

 

 

36.5

%

 

 

36.7

%

 

 

37.0

%

 

 

36.8

%

Adjusted gross margin

 

 

36.6

%

 

 

36.7

%

 

 

37.1

%

 

 

36.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

65,313

 

 

$

65,740

 

 

$

208,807

 

 

$

216,044

 

Income tax provision

 

 

20,644

 

 

 

22,648

 

 

 

65,928

 

 

 

72,798

 

Interest expense, net

 

 

1,698

 

 

 

1,951

 

 

 

6,058

 

 

 

7,648

 

Earnings before interest and taxes (EBIT)

 

 

87,655

 

 

 

90,339

 

 

 

280,793

 

 

 

296,490

 

Special items (2)

 

 

2,392

 

 

 

 

 

 

46,034

 

 

 

 

Adjusted EBIT

 

 

90,047

 

 

 

90,339

 

 

 

326,827

 

 

 

296,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, amortization and accretion, adjusted for special items

 

 

33,655

 

 

 

31,201

 

 

 

97,789

 

 

 

96,057

 

Adjusted EBITDA

 

$

123,702

 

 

$

121,540

 

 

$

424,616

 

 

$

392,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

65,313

 

 

$

65,740

 

 

$

208,807

 

 

$

216,044

 

Special items, net of tax (2)

 

 

1,780

 

 

 

 

 

 

34,272

 

 

 

 

Adjusted net income

 

$

67,093

 

 

$

65,740

 

 

$

243,079

 

 

$

216,044

 

Diluted earnings per share

 

$

0.64

 

 

$

0.61

 

 

$

2.01

 

 

$

1.97

 

Adjusted diluted earnings per share

 

$

0.65

 

 

$

0.61

 

 

$

2.34

 

 

$

1.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

102,703

 

 

 

108,095

 

 

 

103,758

 

 

 

109,888

 

(1) For the thirteen and thirty-nine weeks ended October 1, 2023, special items included approximately $1 million and $3 million, respectively, in Cost of sales related to store closures and our supply chain transition.

(2) For the thirteen weeks ended October 1, 2023, special items included approximately $1 million in Selling, general and administrative expenses primarily related to store closures and $1 million in Cost of sales related to our supply chain transition. For the thirty-nine weeks ended October 1, 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.

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Photos copyright by Jay Graham Photographer
Copyright © 2010-2020 Sausalito.com & California Media Partners, LLC. All rights reserved.