Sprouts Farmers Market Earnings 2020-06-28
| Balance Sheet | Income Statement | Cash Flow |
|---|---|---|
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Assets, Equity
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Rev, G Profit, Net Income
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Ops, Inv, Fin
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices and zip code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
| Title of Each Class
| Trading Symbol(s) | Name of Each Exchange on Which Registered
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ |
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| Non-accelerated filer | ☐ | Smaller reporting company | |
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| Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of July 27, 2020, the registrant had
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 28, 2020
TABLE OF CONTENTS
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (referred to as the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (referred to as the “Exchange Act”), including, but not limited to, statements regarding our expectations, beliefs, intentions, strategies, future operations, future financial position, future revenue, projected expenses, and plans and objectives of management. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “continue,” “objective,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements reflect our current views about future events and involve known risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievement to be materially different from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” included in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the fiscal year ended December 29, 2019, and our other filings with the Securities and Exchange Commission. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to the “Company,” “Sprouts,” “Sprouts Farmers Market,” “we,” “us” and “our” refer to Sprouts Farmers Market, Inc. and, where appropriate, its subsidiaries.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
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| June 28, 2020 |
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| December 29, 2019 |
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| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
| $ | |
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| Accounts receivable, net |
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| Inventories |
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| Prepaid expenses and other current assets |
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| Total current assets |
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| Property and equipment, net of accumulated depreciation |
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| Operating lease assets, net |
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| Intangible assets, net of accumulated amortization |
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| Goodwill |
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| Other assets |
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| Total assets |
| $ | |
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| $ | |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
| $ | |
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| $ | |
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| Accrued liabilities |
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| Accrued salaries and benefits |
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| Accrued income tax |
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| Current portion of operating lease liabilities |
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| Current portion of finance lease liabilities |
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| Total current liabilities |
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| Long-term operating lease liabilities |
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| Long-term debt and finance lease liabilities |
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| Other long-term liabilities |
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| Deferred income tax liability |
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| Total liabilities |
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| Commitments and contingencies (Note 6) |
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| Stockholders’ equity: |
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| Undesignated preferred stock; $ authorized, |
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| Common stock, $ |
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| Additional paid-in capital |
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| Accumulated other comprehensive income (loss) |
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| Retained earnings (Accumulated deficit) |
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| Total stockholders’ equity |
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| Total liabilities and stockholders’ equity |
| $ | |
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| $ | |
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The accompanying notes are an integral part of these consolidated financial statements.
4
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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| Thirteen weeks ended |
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| Twenty-six weeks ended |
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| June 28, 2020 |
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| June 30, 2019 |
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| June 28, 2020 |
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| June 30, 2019 |
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| Net sales |
| $ | |
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| $ | |
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| $ | |
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| $ | |
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| Cost of sales |
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| Gross profit |
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| Selling, general and administrative expenses |
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| Depreciation and amortization (exclusive of depreciation included in cost of sales) |
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| Store closure and other costs, net |
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| Income from operations |
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| Interest expense, net |
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| Income before income taxes |
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| Income tax provision |
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| Net income |
| $ | |
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| $ | |
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| $ | |
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| $ | |
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| Net income per share: |
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| Basic |
| $ | |
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| $ | |
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| $ | |
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| $ | |
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| Diluted |
| $ | |
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| $ | |
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| $ | |
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| $ | |
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| Weighted average shares outstanding: |
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The accompanying notes are an integral part of these consolidated financial statements.
5
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(IN THOUSANDS)
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| Thirteen weeks ended |
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| Twenty-six weeks ended |
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| June 28, 2020 |
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| June 30, 2019 |
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| June 28, 2020 |
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| June 30, 2019 |
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| Net income |
| $ | |
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| $ | |
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| $ | |
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| $ | |
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| Other comprehensive income (loss), net of tax |
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| Unrealized gain/(loss) on cash flow hedging activities, net of income tax of ($ ($ |
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| Total other comprehensive income (loss) |
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| Comprehensive income |
| $ | |
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| $ | |
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| $ | |
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| $ | |
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The accompanying notes are an integral part of these consolidated financial statements.
6
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
| For the thirteen and twenty-six weeks ended June 28, 2020 |
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| Shares |
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| Common Stock |
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| Additional Paid In Capital |
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| (Accumulated Deficit) Retained Earnings |
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| Accumulated Other Comprehensive Loss |
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| Total Stockholders’ Equity |
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| Balances at March 29, 2020 |
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| $ | |
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| $ | |
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| $ | |
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| $ | ( | ) |
| $ | |
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| Net income |
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| — |
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| — |
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| — |
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| — |
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| Other comprehensive loss |
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| — |
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| — |
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| — |
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| — |
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| ( | ) |
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| ( | ) |
| Issuance of shares under stock plans |
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| — |
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| — |
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| — |
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| Share-based compensation |
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| — |
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| — |
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| — |
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| — |
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| Balances at June 28, 2020 |
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| $ | |
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| $ | |
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| $ | |
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| $ | ( | ) |
| $ | |
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| Shares |
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| Common Stock |
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| Additional Paid In Capital |
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| (Accumulated Deficit) Retained Earnings |
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| Accumulated Other Comprehensive Loss |
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| Total Stockholders’ Equity |
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| Balances at December 29, 2019 |
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| $ | |
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| $ | |
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| $ | ( | ) |
| $ | ( | ) |
| $ | |
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| Net income |
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| — |
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| — |
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| — |
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| — |
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| Other comprehensive loss |
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| — |
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| — |
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| — |
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| — |
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| ( | ) |
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| ( | ) |
| Issuance of shares under stock plans |
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| — |
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| — |
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| — |
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| Share-based compensation |
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| — |
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| — |
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| — |
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| — |
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| Balances at June 28, 2020 |
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| $ | |
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| $ | |
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| $ | |
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| $ | ( | ) |
| $ | |
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The accompanying notes are an integral part of these consolidated financial statements.
7
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
| For the thirteen and twenty-six weeks ended June 30, 2019 |
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| Shares |
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| Common Stock |
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| Additional Paid In Capital |
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| (Accumulated Deficit) Retained Earnings |
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| Accumulated Other Comprehensive Loss |
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| Total Stockholders’ Equity |
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| Balances at March 31, 2019 |
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| $ | |
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| $ | |
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| $ | ( | ) |
| $ | ( | ) |
| $ | |
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| Net income |
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| — |
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| — |
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| — |
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| — |
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| Other comprehensive loss |
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| — |
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| — |
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| — |
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| — |
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| ( | ) |
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| ( | ) |
| Issuance of shares under stock plans |
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| — |
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| — |
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| — |
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| Repurchase and retirement of common stock |
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| ( | ) |
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| ( | ) |
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| — |
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| ( | ) |
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| — |
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| ( | ) |
| Share-based compensation |
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| — |
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| — |
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| — |
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| — |
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| Adjustment to the impact of adoption of ASC 842 related to leases |
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| — |
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| — |
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| — |
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| ( | ) |
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| — |
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| ( | ) |
| Balances at June 30, 2019 |
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| $ | |
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| $ | |
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| $ | ( | ) |
| $ | ( | ) |
| $ | |
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| Shares |
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| Common Stock |
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| Additional Paid In Capital |
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| (Accumulated Deficit) Retained Earnings |
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| Accumulated Other Comprehensive Income (Loss) |
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| Total Stockholders’ Equity |
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| Balances at December 30, 2018 |
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| $ | |
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| $ | |
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| $ | ( | ) |
| $ | |
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| $ | |
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| Net income |
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| — |
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| — |
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| — |
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| — |
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| Other comprehensive loss |
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| — |
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| — |
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| — |
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| — |
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| ( | ) |
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| ( | ) |
| Issuance of shares under stock plans |
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| — |
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| — |
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| Repurchase and retirement of common stock |
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| ( | ) |
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| ( | ) |
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| — |
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| ( | ) |
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| — |
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| ( | ) |
| Share-based compensation |
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| — |
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| — |
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| — |
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| — |
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| Impact of adoption of ASC 842 related to leases |
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| — |
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| — |
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| — |
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| — |
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| Balances at June 30, 2019 |
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| $ | |
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| $ | |
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| $ | ( | ) |
| $ | ( | ) |
| $ | |
|
The accompanying notes are an integral part of these consolidated financial statements.
8
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
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| Twenty-six weeks ended |
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