Sprouts Farmers Market, Inc. Reports First Quarter 2024 Results
"We were pleased with our impressive financial results this quarter, with strength in comparable store sales, traffic, and ecommerce," said
First Quarter Highlights:
-
Net sales totaled
$1.9 billion ; a 9% increase from the same period in 2023 - Comparable store sales growth of 4.0%
-
Diluted earnings per share of
$1.12 ; compared to diluted earnings per share of$0.73 and Adjusted diluted earnings per share of$0.98 (1) in the same period in 2023 -
Opened 7 new stores, resulting in 414 stores in 23 states as of
March 31, 2024
(1) |
Adjusted diluted earnings per share, a non-GAAP financial measure, excludes the impact of certain special items. For the first quarter ended |
Leverage and Liquidity in First Quarter 2024
-
Ended the quarter with
$312 million in cash and cash equivalents and a$125 million balance on its$700 million revolving credit facility -
Repurchased 958 thousand
shares of common stock for a total investment of
$60 million , excluding excise tax -
Generated cash from operations of
$220 million and invested$46 million in capital expenditures, net of landlord reimbursement,year-to-date thruMarch 31, 2024
Second Quarter and Full-Year 2024 Outlook
The following provides information on our second quarter 2024 outlook:
- Comparable store sales growth: 3% to 4%
-
Adjusted diluted earnings per share:
$0.75 to$0.79
The following provides information on our full-year 2024 outlook:
- Net sales growth: 7% to 8%
- Comparable store sales growth: 2.5% to 3.5%
-
Adjusted EBIT:
$415 million to$425 million -
Adjusted diluted earnings per share:
$3.05 to$3.13 - Unit growth: Approximately 35 new stores
-
Capital expenditures (net of landlord reimbursements):
$225 million to$245 million
First Quarter 2024 Conference Call
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
Important Information Regarding Outlook
There is no guarantee that
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
Corporate Profile
True to its farm-stand heritage,
|
|||||
CONSOLIDATED STATEMENTS OF INCOME |
|||||
(UNAUDITED) |
|||||
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|||||
|
Thirteen weeks ended |
||||
|
|
|
|
||
Net sales |
$ |
1,883,808 |
|
$ |
1,733,310 |
Cost of sales |
|
1,161,495 |
|
|
1,083,248 |
Gross profit |
|
722,313 |
|
|
650,062 |
Selling, general and administrative expenses |
|
539,771 |
|
|
486,195 |
Depreciation and amortization (exclusive of depreciation included in cost of sales) |
|
32,232 |
|
|
34,068 |
Store closure and other costs, net |
|
2,044 |
|
|
28,277 |
Income from operations |
|
148,266 |
|
|
101,522 |
Interest expense, net |
|
818 |
|
|
2,220 |
Income before income taxes |
|
147,448 |
|
|
99,302 |
Income tax provision |
|
33,348 |
|
|
23,142 |
Net income |
$ |
114,100 |
|
$ |
76,160 |
Net income per share: |
|
|
|
||
Basic |
$ |
1.13 |
|
$ |
0.73 |
Diluted |
$ |
1.12 |
|
$ |
0.73 |
Weighted average shares outstanding: |
|
|
|
||
Basic |
|
101,071 |
|
|
103,827 |
Diluted |
|
102,024 |
|
|
104,876 |
|
|||||
CONSOLIDATED BALANCE SHEETS |
|||||
(UNAUDITED) |
|||||
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) |
|||||
|
|
|
|
||
ASSETS |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
312,276 |
|
$ |
201,794 |
Accounts receivable, net |
|
36,306 |
|
|
30,313 |
Inventories |
|
316,202 |
|
|
323,198 |
Prepaid expenses and other current assets |
|
32,710 |
|
|
48,467 |
Total current assets |
|
697,494 |
|
|
603,772 |
Property and equipment, net of accumulated depreciation |
|
809,481 |
|
|
798,707 |
Operating lease assets, net |
|
1,363,341 |
|
|
1,322,854 |
Intangible assets |
|
208,060 |
|
|
208,060 |
|
|
381,750 |
|
|
381,741 |
Other assets |
|
12,289 |
|
|
12,294 |
Total assets |
$ |
3,472,415 |
|
$ |
3,327,428 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
201,434 |
|
$ |
179,927 |
Accrued liabilities |
|
190,217 |
|
|
164,887 |
Accrued salaries and benefits |
|
57,084 |
|
|
74,752 |
Accrued income tax |
|
8,869 |
|
|
— |
Current portion of operating lease liabilities |
|
127,255 |
|
|
126,271 |
Current portion of finance lease liabilities |
|
1,089 |
|
|
1,032 |
Total current liabilities |
|
585,948 |
|
|
546,869 |
Long-term operating lease liabilities |
|
1,441,068 |
|
|
1,399,676 |
Long-term debt and finance lease liabilities |
|
133,375 |
|
|
133,685 |
Other long-term liabilities |
|
37,557 |
|
|
36,270 |
Deferred income tax liability |
|
63,440 |
|
|
62,381 |
Total liabilities |
|
2,261,388 |
|
|
2,178,881 |
Commitments and contingencies |
|
|
|
||
Stockholders’ equity: |
|
|
|
||
Undesignated preferred stock; |
|
— |
|
|
— |
Common stock, |
|
101 |
|
|
101 |
Additional paid-in capital |
|
783,593 |
|
|
774,834 |
Retained earnings |
|
427,333 |
|
|
373,612 |
Total stockholders’ equity |
|
1,211,027 |
|
|
1,148,547 |
Total liabilities and stockholders’ equity |
$ |
3,472,415 |
|
$ |
3,327,428 |
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(UNAUDITED) |
|||||||
(IN THOUSANDS) |
|||||||
|
Thirteen weeks ended |
||||||
|
|
|
|
||||
Operating activities |
|
|
|
||||
Net income |
$ |
114,100 |
|
|
$ |
76,160 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization expense |
|
34,522 |
|
|
|
34,912 |
|
Operating lease asset amortization |
|
32,303 |
|
|
|
30,696 |
|
Impairment of assets |
|
— |
|
|
|
27,845 |
|
Share-based compensation |
|
6,477 |
|
|
|
3,852 |
|
Deferred income taxes |
|
1,072 |
|
|
|
(386 |
) |
Other non-cash items |
|
496 |
|
|
|
14 |
|
Changes in operating assets and liabilities, net of effects from acquisition: |
|
|
|
||||
Accounts receivable |
|
8,601 |
|
|
|
6,241 |
|
Inventories |
|
6,996 |
|
|
|
5,400 |
|
Prepaid expenses and other current assets |
|
14,691 |
|
|
|
9,528 |
|
Other assets |
|
924 |
|
|
|
2,609 |
|
Accounts payable |
|
28,899 |
|
|
|
27,006 |
|
Accrued liabilities |
|
17,642 |
|
|
|
(2,024 |
) |
Accrued salaries and benefits |
|
(17,667 |
) |
|
|
(13,712 |
) |
Accrued income tax |
|
8,869 |
|
|
|
5,456 |
|
Operating lease liabilities |
|
(36,580 |
) |
|
|
(33,956 |
) |
Other long-term liabilities |
|
(1,650 |
) |
|
|
179 |
|
Cash flows from operating activities |
|
219,695 |
|
|
|
179,820 |
|
Investing activities |
|
|
|
||||
Purchases of property and equipment |
|
(51,241 |
) |
|
|
(47,044 |
) |
Payments for acquisition, net of cash acquired |
|
— |
|
|
|
(13,042 |
) |
Cash flows used in investing activities |
|
(51,241 |
) |
|
|
(60,086 |
) |
Financing activities |
|
|
|
||||
Payments on revolving credit facilities |
|
— |
|
|
|
(25,000 |
) |
Payments on finance lease liabilities |
|
(253 |
) |
|
|
(219 |
) |
Repurchase of common stock |
|
(60,000 |
) |
|
|
(98,349 |
) |
Proceeds from exercise of stock options |
|
2,283 |
|
|
|
5,488 |
|
Cash flows used in financing activities |
|
(57,970 |
) |
|
|
(118,080 |
) |
Increase in cash, cash equivalents, and restricted cash |
|
110,484 |
|
|
|
1,654 |
|
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 |
$ |
314,354 |
|
|
$ |
296,846 |
|
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 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 weeks ended
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 EBITDA and Adjusted EBIT to net income and (ii) Adjusted diluted earnings per share to diluted earnings per share, in each case, for the thirteen weeks ended
|
|||||
NON-GAAP MEASURE RECONCILIATION |
|||||
(UNAUDITED) |
|||||
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|||||
|
Thirteen weeks ended |
||||
|
|
|
|
||
Net income |
$ |
114,100 |
|
$ |
76,160 |
Income tax provision |
|
33,348 |
|
|
23,142 |
Interest expense, net |
|
818 |
|
|
2,220 |
Earnings before interest and taxes (EBIT) |
|
148,266 |
|
|
101,522 |
Special items (1) |
|
— |
|
|
35,527 |
Adjusted EBIT |
|
148,266 |
|
|
137,049 |
|
|
|
|
||
Depreciation, amortization and accretion, adjusted for special items |
|
34,522 |
|
|
30,913 |
Adjusted EBITDA |
$ |
182,788 |
|
$ |
167,962 |
|
|
|
|
||
Net income |
$ |
114,100 |
|
$ |
76,160 |
Special items, net of tax (1) |
|
— |
|
|
26,521 |
Adjusted net income |
$ |
114,100 |
|
$ |
102,681 |
Diluted earnings per share |
$ |
1.12 |
|
$ |
0.73 |
Adjusted diluted earnings per share |
$ |
1.12 |
|
$ |
0.98 |
|
|
|
|
||
Diluted weighted average shares outstanding |
|
102,024 |
|
|
104,876 |
(1) |
For the thirteen weeks ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501989071/en/
Investors:
(602) 682-1584
susannahlivingston@sprouts.com
Media:
media@sprouts.com
Source: