Sprouts Farmers Market, Inc. Reports Third Quarter 2024 Results
Sprouts Farmers Market (SFM) reported strong Q3 2024 results with net sales reaching $1.9 billion, marking a 14% increase year-over-year. The company achieved 8.4% comparable store sales growth and diluted earnings per share of $0.91, up from $0.64 in Q3 2023. During the quarter, SFM opened 9 new stores, expanding to 428 locations across 23 states. The company ended Q3 with $310 million in cash and zero balance on its credit facility. For Q4 2024, SFM projects comparable store sales growth of 8.0-10.0% and expects full-year 2024 net sales growth of approximately 12.0%.
Sprouts Farmers Market (SFM) ha riportato risultati solidi per il terzo trimestre del 2024, con vendite nette che hanno raggiunto 1,9 miliardi di dollari, segnando un aumento del 14% rispetto all'anno precedente. L'azienda ha registrato una crescita delle vendite comparabili nei negozi dell'8,4% e un utile per azione diluito di $0,91, rispetto ai $0,64 nel terzo trimestre del 2023. Durante il trimestre, SFM ha aperto 9 nuovi negozi, espandendosi a 428 località in 23 stati. L'azienda ha chiuso il terzo trimestre con 310 milioni di dollari in contanti e un saldo zero sulla sua linea di credito. Per il quarto trimestre del 2024, SFM prevede una crescita delle vendite comparabili nei negozi tra l'8,0% e il 10,0% e si aspetta una crescita delle vendite nette dell'anno intero del 2024 di circa il 12,0%.
Sprouts Farmers Market (SFM) reportó resultados sólidos para el tercer trimestre de 2024, con ventas netas que alcanzaron 1.9 mil millones de dólares, marcando un aumento del 14% en comparación con el año anterior. La compañía logró un crecimiento de ventas comparables de 8.4% y ganancias por acción diluidas de $0.91, en comparación con $0.64 en el tercer trimestre de 2023. Durante el trimestre, SFM abrió 9 nuevas tiendas, expandiéndose a 428 ubicaciones en 23 estados. La compañía cerró el tercer trimestre con 310 millones de dólares en efectivo y un saldo cero en su línea de crédito. Para el cuarto trimestre de 2024, SFM proyecta un crecimiento de ventas comparables de entre el 8.0% y el 10.0% y espera un crecimiento de ventas netas de aproximadamente el 12.0% para todo el año 2024.
Sprouts Farmers Market (SFM)는 2024년 3분기 실적을 발표하며, 순매출이 19억 달러에 달하고, 전년 대비 14% 증가했다고 전했습니다. 회사는 비교 가능한 매장 판매 성장률 8.4%를 기록했으며, 희석된 주당 순이익은 $0.91로, 2023년 3분기의 $0.64에서 증가했습니다. 분기 동안 SFM은 9개의 새로운 매장을 열어 23개 주에 걸쳐 428개의 매장으로 확장했습니다. SFM은 3분기를 3억 1천만 달러의 현금과 함께 마감하였으며, 신용 시설에는 잔액이 없습니다. 2024년 4분기에 대해 SFM은 비교 가능한 매장 판매 성장률이 8.0%에서 10.0% 사이일 것으로 예상하며, 2024년 전체의 순매출 성장률은 약 12.0%에 이를 것으로 예상하고 있습니다.
Sprouts Farmers Market (SFM) a annoncé des résultats solides pour le troisième trimestre 2024, avec des ventes nettes atteignant 1,9 milliard de dollars, ce qui représente une augmentation de 14% par rapport à l'année précédente. L'entreprise a enregistré une croissance des ventes comparables des magasins de 8,4% et un bénéfice par action dilué de 0,91 $, contre 0,64 $ au troisième trimestre 2023. Au cours du trimestre, SFM a ouvert 9 nouveaux magasins, portant son total à 428 emplacements dans 23 États. L'entreprise a terminé le troisième trimestre avec 310 millions de dollars en liquidités et un solde nul sur sa ligne de crédit. Pour le quatrième trimestre 2024, SFM prévoit une croissance des ventes comparables des magasins de 8,0 à 10,0 % et s'attend à une croissance des ventes nettes d'environ 12,0 % pour l'ensemble de l'année 2024.
Sprouts Farmers Market (SFM) berichtete über starke Ergebnisse im dritten Quartal 2024, mit Nettoumsätzen von 1,9 Milliarden Dollar, was einem Anstieg von 14% im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte ein Wachstum der vergleichbaren Filialumsätze von 8,4% und einen verwässerten Gewinn je Aktie von $0,91, ein Anstieg von $0,64 im dritten Quartal 2023. Im Laufe des Quartals eröffnete SFM 9 neue Geschäfte und erweiterte damit auf insgesamt 428 Standorte in 23 Bundesstaaten. Das Unternehmen schloss das dritte Quartal mit 310 Millionen Dollar Bargeld und einem Nullsaldo auf seiner Kreditlinie ab. Für das vierte Quartal 2024 prognostiziert SFM ein Wachstum der vergleichbaren Filialumsätze von 8,0-10,0% und erwartet für das Gesamtjahr 2024 ein Nettoumsatzwachstum von etwa 12,0%.
- Net sales increased 14% YoY to $1.9 billion
- Comparable store sales grew 8.4%
- Diluted EPS increased 42% to $0.91 from $0.64
- Strong cash position of $310 million with zero debt on credit facility
- Generated $520 million in operating cash flow YTD
- Raised full-year guidance with 12% expected net sales growth
- None.
Insights
Sprouts delivered an impressive Q3 2024 performance with substantial growth metrics across the board. The
The company's financial position remains strong with
The grocery sector's competitive landscape makes Sprouts' performance particularly noteworthy. The
The robust traffic growth indicates strong consumer demand for Sprouts' specialty health food offerings, despite inflationary pressures. The Q4 outlook of
"The third quarter was another exceptional performance by our Sprouts team," said Jack Sinclair, chief executive officer of Sprouts Farmers Market. "We are driving robust traffic growth and continue to execute at a very high level. We remain confident in our long-term growth potential."
Third Quarter Highlights:
-
Net sales totaled
; a$1.9 billion 14% increase from the same period in 2023 -
Comparable store sales growth of
8.4% -
Diluted earnings per share of
; compared to diluted earnings per share of$0.91 and Adjusted diluted earnings per share of$0.64 (1) in the same period in 2023$0.65 - Opened 9 new stores, resulting in 428 stores in 23 states as of September 29, 2024
(1) |
Adjusted diluted earnings per share, a non-GAAP financial measure, excludes the impact of certain special items. For the third quarter ended September 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 Third Quarter 2024
-
Ended the quarter with
in cash and cash equivalents and zero balance on its$310 million revolving credit facility$700 million -
Repurchased 264 thousand shares of common stock for a total investment of
, excluding excise tax$25 million -
Generated cash from operations of
and invested$520 million in capital expenditures, net of landlord reimbursement, year-to-date thru September 29, 2024$132 million
Fourth Quarter and Full-Year 2024 Outlook
The following provides information on our fourth quarter 2024 outlook:
-
Comparable store sales growth:
8.0% to10.0% -
Adjusted diluted earnings per share:
to$0.67 $0.71
The following provides information on our full-year 2024 outlook:
-
Net sales growth: approximately
12.0% -
Comparable store sales growth: approximately
7.0% -
Adjusted EBIT:
to$490 million $495 million -
Adjusted diluted earnings per share:
to$3.64 $3.68 -
Unit growth: 33 new stores; the openings of two
Florida stores affected by Hurricane Milton are expected to be postponed to the first quarter of 2025 -
Capital expenditures (net of landlord reimbursements):
to$205 million $215 million
Third Quarter 2024 Conference Call
Sprouts will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, October 30, 2024, during which Sprouts executives will further discuss third quarter 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 October 30, 2024. 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; 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
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|||||||||||||||
|
Thirteen weeks ended |
|
Thirty-nine weeks ended |
||||||||||||
|
September 29, 2024 |
|
October 1, 2023 |
|
September 29, 2024 |
|
October 1, 2023 |
||||||||
Net sales |
$ |
1,945,735 |
|
|
$ |
1,713,282 |
|
$ |
5,723,062 |
|
|
$ |
5,138,839 |
|
|
Cost of sales |
|
1,204,812 |
|
|
|
1,087,848 |
|
|
|
3,541,461 |
|
|
|
3,237,371 |
|
Gross profit |
|
740,923 |
|
|
|
625,434 |
|
|
|
2,181,601 |
|
|
|
1,901,468 |
|
Selling, general and administrative expenses |
|
580,332 |
|
|
|
502,801 |
|
|
|
1,676,470 |
|
|
|
1,486,961 |
|
Depreciation and amortization (exclusive of depreciation included in cost of sales) |
|
34,408 |
|
|
|
31,802 |
|
|
|
98,129 |
|
|
|
99,834 |
|
Store closure and other costs, net |
|
3,732 |
|
|
|
3,176 |
|
|
|
8,968 |
|
|
|
33,880 |
|
Income from operations |
|
122,451 |
|
|
|
87,655 |
|
|
|
398,034 |
|
|
|
280,793 |
|
Interest (income) expense, net |
|
(1,061 |
) |
|
|
1,698 |
|
|
|
(382 |
) |
|
|
6,058 |
|
Income before income taxes |
|
123,512 |
|
|
|
85,957 |
|
|
|
398,416 |
|
|
|
274,735 |
|
Income tax provision |
|
31,902 |
|
|
|
20,644 |
|
|
|
97,417 |
|
|
|
65,928 |
|
Net income |
$ |
91,610 |
|
|
$ |
65,313 |
|
|
$ |
300,999 |
|
|
$ |
208,807 |
|
Net income per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.91 |
|
|
$ |
0.64 |
|
|
$ |
2.99 |
|
|
$ |
2.03 |
|
Diluted |
$ |
0.91 |
|
|
$ |
0.64 |
|
|
$ |
2.97 |
|
|
$ |
2.01 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
100,148 |
|
|
|
101,881 |
|
|
|
100,560 |
|
|
|
102,844 |
|
Diluted |
|
101,025 |
|
|
|
102,703 |
|
|
|
101,469 |
|
|
|
103,758 |
|
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) |
|||||
|
September 29, 2024 |
|
December 31, 2023 |
||
ASSETS |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
309,668 |
|
$ |
201,794 |
Accounts receivable, net |
|
25,073 |
|
|
30,313 |
Inventories |
|
329,472 |
|
|
323,198 |
Prepaid expenses and other current assets |
|
29,384 |
|
|
48,467 |
Total current assets |
|
693,597 |
|
|
603,772 |
Property and equipment, net of accumulated depreciation |
|
851,443 |
|
|
798,707 |
Operating lease assets, net |
|
1,437,280 |
|
|
1,322,854 |
Intangible assets |
|
208,060 |
|
|
208,060 |
Goodwill |
|
381,750 |
|
|
381,741 |
Other assets |
|
13,407 |
|
|
12,294 |
Total assets |
$ |
3,585,537 |
|
$ |
3,327,428 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
198,246 |
|
$ |
179,927 |
Accrued liabilities |
|
206,153 |
|
|
164,887 |
Accrued salaries and benefits |
|
81,528 |
|
|
74,752 |
Accrued income tax |
|
1,392 |
|
|
— |
Current portion of operating lease liabilities |
|
127,558 |
|
|
126,271 |
Current portion of finance lease liabilities |
|
1,147 |
|
|
1,032 |
Total current liabilities |
|
616,024 |
|
|
546,869 |
Long-term operating lease liabilities |
|
1,517,192 |
|
|
1,399,676 |
Long-term debt and finance lease liabilities |
|
7,731 |
|
|
133,685 |
Other long-term liabilities |
|
37,560 |
|
|
36,270 |
Deferred income tax liability |
|
63,538 |
|
|
62,381 |
Total liabilities |
|
2,242,045 |
|
|
2,178,881 |
Commitments and contingencies |
|
|
|
||
Stockholders’ equity: |
|
|
|
||
Undesignated preferred stock; |
|
— |
|
|
— |
Common stock, |
|
100 |
|
|
101 |
Additional paid-in capital |
|
799,487 |
|
|
774,834 |
Retained earnings |
|
543,905 |
|
|
373,612 |
Total stockholders’ equity |
|
1,343,492 |
|
|
1,148,547 |
Total liabilities and stockholders’ equity |
$ |
3,585,537 |
|
$ |
3,327,428 |
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) |
|||||||
|
Thirty-nine weeks ended |
||||||
|
September 29, 2024 |
|
October 1, 2023 |
||||
Operating activities |
|
|
|
||||
Net income |
$ |
300,999 |
|
|
$ |
208,807 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization expense |
|
103,881 |
|
|
|
103,668 |
|
Operating lease asset amortization |
|
99,278 |
|
|
|
94,403 |
|
Impairment of assets |
|
— |
|
|
|
27,845 |
|
Share-based compensation |
|
19,925 |
|
|
|
14,731 |
|
Deferred income taxes |
|
1,170 |
|
|
|
(13,225 |
) |
Other non-cash items |
|
3,116 |
|
|
|
596 |
|
Changes in operating assets and liabilities, net of effects from acquisition: |
|
|
|
||||
Accounts receivable |
|
30,273 |
|
|
|
10,070 |
|
Inventories |
|
(6,275 |
) |
|
|
(11,322 |
) |
Prepaid expenses and other current assets |
|
18,595 |
|
|
|
21,093 |
|
Other assets |
|
219 |
|
|
|
3,870 |
|
Accounts payable |
|
25,556 |
|
|
|
27,446 |
|
Accrued liabilities |
|
37,877 |
|
|
|
19,027 |
|
Accrued salaries and benefits |
|
6,777 |
|
|
|
4,509 |
|
Accrued income tax |
|
1,392 |
|
|
|
— |
|
Operating lease liabilities |
|
(122,646 |
) |
|
|
(103,787 |
) |
Other long-term liabilities |
|
214 |
|
|
|
1,294 |
|
Cash flows from operating activities |
|
520,351 |
|
|
|
409,025 |
|
Investing activities |
|
|
|
||||
Purchases of property and equipment |
|
(161,687 |
) |
|
|
(165,016 |
) |
Payments for acquisition, net of cash acquired |
|
— |
|
|
|
(13,032 |
) |
Cash flows used in investing activities |
|
(161,687 |
) |
|
|
(178,048 |
) |
Financing activities |
|
|
|
||||
Payments on revolving credit facilities |
|
(125,000 |
) |
|
|
(100,000 |
) |
Payments on finance lease liabilities |
|
(840 |
) |
|
|
(749 |
) |
Repurchase of common stock |
|
(129,698 |
) |
|
|
(180,415 |
) |
Proceeds from exercise of stock options |
|
4,729 |
|
|
|
8,844 |
|
Cash flows used in financing activities |
|
(250,809 |
) |
|
|
(272,320 |
) |
Increase/(decrease) in cash, cash equivalents, and restricted cash |
|
107,855 |
|
|
|
(41,343 |
) |
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 |
$ |
311,725 |
|
|
$ |
253,849 |
|
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with accounting principles generally accepted in
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 thirty-nine weeks ended October 1, 2023. There were no such material adjustments during the thirteen and thirty-nine weeks ended September 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 thirty-nine weeks ended September 29, 2024 and October 1, 2023:
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES NON-GAAP MEASURE RECONCILIATION (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|||||||||||||||
|
Thirteen weeks ended |
|
Thirty-nine weeks ended |
||||||||||||
|
September 29, 2024 |
|
October 1, 2023 |
|
September 29, 2024 |
|
October 1, 2023 |
||||||||
Gross profit |
$ |
740,923 |
|
|
$ |
625,434 |
|
|
$ |
2,181,601 |
|
|
$ |
1,901,468 |
|
Special items (1) |
|
— |
|
|
|
1,302 |
|
|
|
— |
|
|
|
2,955 |
|
Adjusted gross profit |
$ |
740,923 |
|
|
$ |
626,736 |
|
|
$ |
2,181,601 |
|
|
$ |
1,904,423 |
|
Gross margin |
|
38.1 |
% |
|
|
36.5 |
% |
|
|
38.1 |
% |
|
|
37.0 |
% |
Adjusted gross margin |
|
38.1 |
% |
|
|
36.6 |
% |
|
|
38.1 |
% |
|
|
37.1 |
% |
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
91,610 |
|
|
$ |
65,313 |
|
|
$ |
300,999 |
|
|
$ |
208,807 |
|
Income tax provision |
|
31,902 |
|
|
|
20,644 |
|
|
|
97,417 |
|
|
|
65,928 |
|
Interest (income) expense, net |
|
(1,061 |
) |
|
|
1,698 |
|
|
|
(382 |
) |
|
|
6,058 |
|
Earnings before interest and taxes (EBIT) |
|
122,451 |
|
|
|
87,655 |
|
|
|
398,034 |
|
|
|
280,793 |
|
Special items (2) |
|
— |
|
|
|
2,392 |
|
|
|
— |
|
|
|
46,034 |
|
Adjusted EBIT |
|
122,451 |
|
|
|
90,047 |
|
|
|
398,034 |
|
|
|
326,827 |
|
|
|
|
|
|
|
|
|
||||||||
Depreciation, amortization and accretion, adjusted for special items |
|
36,125 |
|
|
|
33,655 |
|
|
|
103,881 |
|
|
|
97,789 |
|
Adjusted EBITDA |
$ |
158,576 |
|
|
$ |
123,702 |
|
|
$ |
501,915 |
|
|
$ |
424,616 |
|
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
91,610 |
|
|
$ |
65,313 |
|
|
$ |
300,999 |
|
|
$ |
208,807 |
|
Special items, net of tax (2) |
|
— |
|
|
|
1,780 |
|
|
|
— |
|
|
|
34,272 |
|
Adjusted net income |
$ |
91,610 |
|
|
$ |
67,093 |
|
|
$ |
300,999 |
|
|
$ |
243,079 |
|
Diluted earnings per share |
$ |
0.91 |
|
|
$ |
0.64 |
|
|
$ |
2.97 |
|
|
$ |
2.01 |
|
Adjusted diluted earnings per share |
$ |
0.91 |
|
|
$ |
0.65 |
|
|
$ |
2.97 |
|
|
$ |
2.34 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted average shares outstanding |
|
101,025 |
|
|
|
102,703 |
|
|
|
101,469 |
|
|
|
103,758 |
|
(1) |
For the thirteen and thirty-nine weeks ended September 29, 2024, there were no special items. For the thirteen and thirty-nine weeks ended October 1, 2023, special items included approximately |
|
(2) |
For the thirteen and thirty-nine weeks ended September 29, 2024, there were no special items. For the thirteen weeks ended October 1, 2023, special items included approximately |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030052316/en/
Investor Contact:
Susannah Livingston
(602) 682-1584
susannahlivingston@sprouts.com
Media Contact:
media@sprouts.com
Source: Sprouts Farmers Market
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