Sprouts Farmers Market, Inc. Reports Fourth Quarter and Full Year 2024 Results

Rhea-AI Summary

Sprouts Farmers Market (SFM) reported strong results for Q4 and full-year 2024. Fourth quarter net sales reached $2.0 billion, an 18% increase year-over-year, with comparable store sales growth of 11.5%. Q4 diluted EPS was $0.79, up from $0.49 in 2023.

For full-year 2024, net sales totaled $7.7 billion, representing a 13% increase, with comparable store sales growth of 7.6%. Annual diluted EPS reached $3.75, compared to $2.50 in 2023. The company opened 33 new stores in 2024, ending the year with 440 locations across 24 states.

Looking ahead to 2025, Sprouts projects Q1 comparable store sales growth of 10-11% and full-year growth of 4.5-6.5%. The company plans to open at least 35 new stores and expects adjusted diluted EPS of $4.52-$4.68 for 2025.

Positive

• Q4 net sales increased 18% to $2.0 billion
• Q4 comparable store sales grew 11.5%
• Full-year net sales up 13% to $7.7 billion
• Diluted EPS increased 50% to $3.75
• Strong cash position with $265 million and zero credit facility balance
• New $600 million share buyback program authorized
• Generated $645 million in operating cash flow

Negative

• None.

Insights

Financial Analyst

Sprouts Farmers Market's Q4 and full-year 2024 results reveal a company executing at an exceptional level, with several standout metrics that deserve attention. The 18% Q4 revenue growth to $2.0 billion and 11.5% comparable store sales growth significantly outpace typical grocery sector performance, indicating strong market share gains and pricing power.

The financial health indicators are particularly impressive: $645 million in operating cash flow provides ample resources for both expansion and shareholder returns, while maintaining zero balance on the credit facility demonstrates disciplined capital management. The new $600 million share buyback authorization, combined with the $238 million already deployed, signals management's confidence in future performance and commitment to shareholder value.

The expansion strategy is proving highly effective, with 33 new stores opened in 2024 and plans for at least 35 more in 2025. This controlled growth approach, averaging about 8% unit growth annually, allows for proper integration of new locations while maintaining operational excellence. The projected capital expenditure of $230-250 million for 2025 suggests continued investment in both new stores and existing infrastructure.

Looking ahead to 2025, the projected comparable store sales growth of 4.5-6.5% appears conservative compared to 2024's performance, but still represents robust growth in the specialty grocery sector. The expected adjusted EPS of $4.52-4.68 would represent another year of double-digit earnings growth, demonstrating the scalability of Sprouts' business model.

The company's attribute-driven offering strategy is clearly resonating with health-conscious consumers, creating a defensible market position in the competitive grocery landscape. The strong comparable store sales growth suggests successful customer retention and basket size expansion, while new store performance indicates effective market selection and execution in expansion markets.

PHOENIX, Ariz.--(BUSINESS WIRE)-- 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 ended							Fifty-Two Weeks ended
	December 29, 2024				December 31, 2023			December 29, 2024				December 31, 2023
Net sales	$	1,996,228			$	1,698,545		$	7,719,290			$	6,837,384
Cost of sales		1,236,338				1,078,172			4,777,799				4,315,543
Gross profit		759,890				620,373			2,941,491				2,521,841
Selling, general and administrative expenses		614,880				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, net		3,928				5,400			12,896				39,280
Income from operations		106,463				69,438			504,497				350,231
Interest (income) expense, net		(1,819	)			433			(2,201	)			6,491
Income before income taxes		108,282				69,005			506,698				343,740
Income tax provision		28,680				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:
Basic		99,820				101,383			100,363				102,479
Diluted		101,020				102,207			101,379				103,390

 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
	December 29, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	265,159		$	201,794
Accounts receivable, net		30,901			30,313
Inventories		343,329			323,198
Prepaid expenses and other current assets		36,131			48,467
Total current assets		675,520			603,772
Property and equipment, net of accumulated depreciation		895,189			798,707
Operating lease assets, net		1,466,903			1,322,854
Intangible assets		208,094			208,060
Goodwill		381,750			381,741
Other assets		13,243			12,294
Total assets	$	3,640,699		$	3,327,428
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	213,414		$	179,927
Accrued liabilities		216,842			164,887
Accrued salaries and benefits		97,991			74,752
Current portion of operating lease liabilities		150,400			126,271
Current portion of finance lease liabilities		1,321			1,032
Total current liabilities		679,968			546,869
Long-term operating lease liabilities		1,520,272			1,399,676
Long-term debt and finance lease liabilities		7,248			133,685
Other long-term liabilities		38,259			36,270
Deferred income tax liability		73,059			62,381
Total liabilities		2,318,806			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, 2023		99			101
Additional paid-in capital		808,140			774,834
Retained earnings		513,654			373,612
Total stockholders’ equity		1,321,893			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, 2024				December 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 expense		140,164				137,811
Operating lease asset amortization		133,923				127,208
Impairment of assets		406				30,549
Share-based compensation		28,417				18,898
Deferred income taxes		10,691				(4,915	)
Other non-cash items		5,610				1,086
Changes in operating assets and liabilities, net of effects from acquisition:
Accounts receivable		30,007				3,173
Inventories		(20,131	)			(10,857	)
Prepaid expenses and other current assets		11,903				2,210
Other assets		(45	)			3,482
Accounts payable		27,986				12,215
Accrued liabilities		39,305				11,746
Accrued salaries and benefits		23,240				12,880
Operating lease liabilities		(168,538	)			(138,795	)
Other long-term liabilities		1,675				(479	)
Cash flows from operating activities		645,214				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 options		4,890				11,454
Cash flows used in financing activities		(351,496	)			(318,048	)
Increase/(Decrease) in cash, cash equivalents, and restricted cash		63,343				(91,322	)
Cash, cash equivalents, and restricted cash at beginning of the period		203,870				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 ended								Fifty-Two Weeks ended
	December 29, 2024				December 31, 2023				December 29, 2024				December 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 margin		38.1	%			36.5	%			38.1	%			36.9	%
Adjusted gross margin		38.1	%			36.5	%			38.1	%			36.9	%
Net income	$	79,602			$	50,049			$	380,601			$	258,856
Income tax provision		28,680				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 EBIT		106,463				69,438				504,497				396,265
Depreciation, amortization and accretion, adjusted for special items		36,283				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 outstanding		101,020				102,207				101,379				103,390

(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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250220713089/en/

Investor Contact:

Susannah Livingston

(602) 682-1584

susannahlivingston@sprouts.com

Media Contact:

media@sprouts.com

Source: Sprouts Farmers Market

FAQ

What was Sprouts Farmers Market's (SFM) Q4 2024 comparable store sales growth?

Sprouts Farmers Market reported a Q4 2024 comparable store sales growth of 11.5%.

How many new stores did SFM open in 2024?

Sprouts Farmers Market opened 33 new stores in 2024, reaching a total of 440 stores across 24 states.

What is SFM's projected comparable store sales growth for 2025?

Sprouts Farmers Market projects comparable store sales growth of 4.5-6.5% for full-year 2025.

What is Sprouts Farmers Market's (SFM) earnings guidance for 2025?

SFM expects adjusted diluted earnings per share of $4.52 to $4.68 for full-year 2025.

How much cash from operations did SFM generate in 2024?

Sprouts Farmers Market generated $645 million in cash from operations during 2024.