Company Quick10K Filing
Sprouts Farmers Market
Price19.23 EPS1
Shares120 P/E20
MCap2,312 P/FCF7
Net Debt-81 EBIT154
TEV2,231 TEV/EBIT14
TTM 2019-09-29, in MM, except price, ratios
10-Q 2020-06-28 Filed 2020-07-29
10-Q 2020-03-29 Filed 2020-05-05
10-K 2019-12-29 Filed 2020-02-20
10-Q 2019-09-29 Filed 2019-10-31
10-Q 2019-06-30 Filed 2019-08-01
10-Q 2019-03-31 Filed 2019-05-02
10-K 2018-12-30 Filed 2019-02-21
10-Q 2018-09-30 Filed 2018-11-01
10-Q 2018-07-01 Filed 2018-08-02
10-Q 2018-04-01 Filed 2018-05-03
10-K 2017-12-31 Filed 2018-02-22
10-Q 2017-10-01 Filed 2017-11-02
10-Q 2017-07-02 Filed 2017-08-03
10-Q 2017-04-02 Filed 2017-05-04
10-K 2017-01-01 Filed 2017-02-23
10-Q 2016-10-02 Filed 2016-11-03
10-Q 2016-07-03 Filed 2016-08-04
10-Q 2016-04-03 Filed 2016-05-05
10-K 2016-01-03 Filed 2016-02-25
10-Q 2015-09-27 Filed 2015-11-05
10-Q 2015-06-28 Filed 2015-08-06
10-Q 2015-03-29 Filed 2015-05-07
10-K 2014-12-28 Filed 2015-02-26
10-Q 2014-09-28 Filed 2014-11-06
10-Q 2014-06-29 Filed 2014-08-07
10-Q 2014-03-30 Filed 2014-05-07
10-K 2013-12-29 Filed 2014-02-27
10-Q 2013-09-29 Filed 2013-11-07
10-Q 2013-06-30 Filed 2013-08-23
8-K 2020-07-29 Earnings, Exhibits
8-K 2020-05-05
8-K 2020-04-28
8-K 2020-02-25
8-K 2020-02-20
8-K 2020-02-20
8-K 2020-01-07
8-K 2019-11-18
8-K 2019-10-30
8-K 2019-08-23
8-K 2019-08-01
8-K 2019-08-01
8-K 2019-06-20
8-K 2019-05-13
8-K 2019-05-02
8-K 2019-04-30
8-K 2019-03-06
8-K 2019-02-26
8-K 2019-02-21
8-K 2018-12-20
8-K 2018-11-29
8-K 2018-11-05
8-K 2018-11-01
8-K 2018-08-06
8-K 2018-08-02
8-K 2018-07-18
8-K 2018-05-10
8-K 2018-05-03
8-K 2018-05-02
8-K 2018-03-27
8-K 2018-02-27
8-K 2018-02-22
8-K 2018-01-08

SFM 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 6. Exhibits.
EX-31.1 sfm-ex311_9.htm
EX-31.2 sfm-ex312_8.htm
EX-32.1 sfm-ex321_6.htm
EX-32.2 sfm-ex322_10.htm

Sprouts Farmers Market Earnings 2020-06-28

Balance SheetIncome StatementCash Flow
2.82.21.71.10.60.02012201420172020
Assets, Equity
1.51.20.90.60.30.02012201420172020
Rev, G Profit, Net Income
0.20.10.10.0-0.0-0.12012201420172020
Ops, Inv, Fin

sfm-10q_20200628.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 28, 2020

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: 001-36029

Sprouts Farmers Market, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

32-0331600

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

5455 East High Street, Suite 111

Phoenix, Arizona 85054

(Address of principal executive offices and zip code)

(480) 814-8016

(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

 

Common Stock, $0.001 par value

SFM

NASDAQ Global Select Market

 

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.    Yes    No

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).    Yes    No 

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

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

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    No

As of July 27, 2020, the registrant had 117,944,450 shares of common stock, $0.001 par value per share, outstanding.

 

 


SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 28, 2020

TABLE OF CONTENTS

 

 

Page

PART I - FINANCIAL INFORMATION

 

 

 

Item 1. Financial Statements.

4

 

 

 

 

Consolidated Balance Sheets as of June 28, 2020 (unaudited) and December 29, 2019

4

 

 

 

 

Consolidated Statements of Income for the thirteen and twenty-six weeks ended June 28, 2020 and June 30, 2019 (unaudited)

5

 

 

 

 

Consolidated Statements of Comprehensive Income for the thirteen and twenty-six weeks ended June 28, 2020 and June 30, 2019 (unaudited)

6

 

 

 

 

Consolidated Statements of Stockholders’ Equity for the thirteen and twenty-six weeks ended June 28, 2020 and June 30, 2019 (unaudited)

7

 

 

 

 

Consolidated Statements of Cash Flows for the twenty-six weeks ended June 28, 2020 and June 30, 2019 (unaudited)

9

 

 

 

 

Notes to Unaudited Consolidated Financial Statements

10

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

35

 

 

Item 4. Controls and Procedures.

36

 

 

PART II - OTHER INFORMATION

 

 

 

Item 1. Legal Proceedings.

37

 

 

Item 1A. Risk Factors.

37

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

38

 

 

Item 6. Exhibits.

39

 

 

Signatures

40

 

 


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)

 

 

 

June 28,

2020

 

 

December 29,

2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

328,116

 

 

$

85,314

 

Accounts receivable, net

 

 

14,742

 

 

 

15,713

 

Inventories

 

 

255,352

 

 

 

275,979

 

Prepaid expenses and other current assets

 

 

14,648

 

 

 

10,833

 

Total current assets

 

 

612,858

 

 

 

387,839

 

Property and equipment, net of accumulated depreciation

 

 

740,075

 

 

 

741,508

 

Operating lease assets, net

 

 

1,041,702

 

 

 

1,028,436

 

Intangible assets, net of accumulated amortization

 

 

184,960

 

 

 

185,395

 

Goodwill

 

 

368,878

 

 

 

368,078

 

Other assets

 

 

14,716

 

 

 

11,727

 

Total assets

 

$

2,963,189

 

 

$

2,722,983

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

168,833

 

 

$

122,839

 

Accrued liabilities

 

 

155,531

 

 

 

136,482

 

Accrued salaries and benefits

 

 

75,837

 

 

 

48,579

 

Accrued income tax

 

 

49,237

 

 

 

2,005

 

Current portion of operating lease liabilities

 

 

122,404

 

 

 

106,153

 

Current portion of finance lease liabilities

 

 

914

 

 

 

754

 

Total current liabilities

 

 

572,756

 

 

 

416,812

 

Long-term operating lease liabilities

 

 

1,082,718

 

 

 

1,078,927

 

Long-term debt and finance lease liabilities

 

 

461,947

 

 

 

549,419

 

Other long-term liabilities

 

 

47,349

 

 

 

41,517

 

Deferred income tax liability

 

 

55,142

 

 

 

54,356

 

Total liabilities

 

 

2,219,912

 

 

 

2,141,031

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

 

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,

   117,944,450 shares issued and outstanding, June 28, 2020;

   117,543,668 shares issued and outstanding, December 29, 2019

 

 

117

 

 

 

117

 

Additional paid-in capital

 

 

679,036

 

 

 

670,966

 

Accumulated other comprehensive income (loss)

 

 

(10,239

)

 

 

(4,682

)

Retained earnings (Accumulated deficit)

 

 

74,363

 

 

 

(84,449

)

Total stockholders’ equity

 

 

743,277

 

 

 

581,952

 

Total liabilities and stockholders’ equity

 

$

2,963,189

 

 

$

2,722,983

 

 

 

 

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)

 

 

 

Thirteen weeks ended

 

 

Twenty-six weeks ended

 

 

 

June 28,

2020

 

 

June 30,

2019

 

 

June 28,

2020

 

 

June 30,

2019

 

Net sales

 

$

1,642,788

 

 

$

1,415,736

 

 

$

3,289,327

 

 

$

2,829,623

 

Cost of sales

 

 

1,030,129

 

 

 

950,954

 

 

 

2,082,836

 

 

 

1,880,492

 

Gross profit

 

 

612,659

 

 

 

464,782

 

 

 

1,206,491

 

 

 

949,131

 

Selling, general and administrative expenses

 

 

488,877

 

 

 

383,116

 

 

 

925,181

 

 

 

757,942

 

Depreciation and amortization (exclusive of

   depreciation included in cost of sales)

 

 

30,549

 

 

 

29,565

 

 

 

61,570

 

 

 

59,024

 

Store closure and other costs, net

 

 

470

 

 

 

769

 

 

 

(612

)

 

 

1,277

 

Income from operations

 

 

92,763

 

 

 

51,332

 

 

 

220,352

 

 

 

130,888

 

Interest expense, net

 

 

3,737

 

 

 

5,438

 

 

 

8,564

 

 

 

10,440

 

Income before income taxes

 

 

89,026

 

 

 

45,894

 

 

 

211,788

 

 

 

120,448

 

Income tax provision

 

 

22,024

 

 

 

10,551

 

 

 

52,976

 

 

 

28,713

 

Net income

 

$

67,002

 

 

$

35,343

 

 

$

158,812

 

 

$

91,735

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.57

 

 

$

0.30

 

 

$

1.35

 

 

$

0.76

 

Diluted

 

$

0.57

 

 

$

0.30

 

 

$

1.35

 

 

$

0.76

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

117,832

 

 

 

118,251

 

 

 

117,688

 

 

 

120,754

 

Diluted

 

 

118,189

 

 

 

118,436

 

 

 

117,977

 

 

 

121,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

Thirteen weeks ended

 

 

Twenty-six weeks ended

 

 

 

June 28,

2020

 

 

June 30,

2019

 

 

June 28,

2020

 

 

June 30,

2019

 

Net income

 

$

67,002

 

 

$

35,343

 

 

$

158,812

 

 

$

91,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain/(loss) on cash flow hedging

   activities, net of income tax of ($40),

   ($1,071), ($1,922), and ($1,976)

 

 

(117

)

 

 

(3,097

)

 

 

(5,557

)

 

 

(5,713

)

Total other comprehensive income (loss)

 

 

(117

)

 

 

(3,097

)

 

 

(5,557

)

 

 

(5,713

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

$

66,885

 

 

$

32,246

 

 

$

153,255

 

 

$

86,022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Common

Stock

 

 

Additional

Paid In

Capital

 

 

(Accumulated

Deficit)

Retained

Earnings

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Total

Stockholders’

Equity

 

Balances at March 29, 2020

 

 

117,786,608

 

 

$

117

 

 

$

673,366

 

 

$

7,361

 

 

$

(10,122

)

 

$

670,722

 

Net income

 

 

 

 

 

 

 

 

 

 

 

67,002

 

 

 

 

 

 

67,002

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(117

)

 

 

(117

)

Issuance of shares under stock plans

 

 

157,842

 

 

 

 

 

 

1,343

 

 

 

 

 

 

 

 

 

1,343

 

Share-based compensation

 

 

 

 

 

 

 

 

4,327

 

 

 

 

 

 

 

 

 

4,327

 

Balances at June 28, 2020

 

 

117,944,450

 

 

$

117

 

 

$

679,036

 

 

$

74,363

 

 

$

(10,239

)

 

$

743,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Common

Stock

 

 

Additional

Paid In

Capital

 

 

(Accumulated

Deficit)

Retained

Earnings

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Total

Stockholders’

Equity

 

Balances at December 29, 2019

 

 

117,452,918

 

 

$

117

 

 

$

670,966

 

 

$

(84,449

)

 

$

(4,682

)

 

$

581,952

 

Net income

 

 

 

 

 

 

 

 

 

 

 

158,812

 

 

 

 

 

 

158,812

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,557

)

 

 

(5,557

)

Issuance of shares under stock plans

 

 

491,532

 

 

 

 

 

 

1,343

 

 

 

 

 

 

 

 

 

1,343

 

Share-based compensation

 

 

 

 

 

 

 

 

6,727

 

 

 

 

 

 

 

 

 

6,727

 

Balances at June 28, 2020

 

 

117,944,450

 

 

$

117

 

 

$

679,036

 

 

$

74,363

 

 

$

(10,239

)

 

$

743,277

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Common

Stock

 

 

Additional

Paid In

Capital

 

 

(Accumulated

Deficit)

Retained

Earnings

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Total

Stockholders’

Equity

 

Balances at March 31, 2019

 

 

120,239,636

 

 

$

120

 

 

$

661,254

 

 

$

(103,371

)

 

$

(1,482

)

 

$

556,521

 

Net income

 

 

 

 

 

 

 

 

 

 

 

35,343

 

 

 

 

 

 

35,343

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,097

)

 

 

(3,097

)

Issuance of shares under stock plans

 

 

194,747

 

 

 

 

 

 

2,459

 

 

 

 

 

 

 

 

 

2,459

 

Repurchase and retirement of common stock

 

 

(2,412,112

)

 

 

(2

)

 

 

 

 

 

(51,423

)

 

 

 

 

 

(51,425

)

Share-based compensation

 

 

 

 

 

 

 

 

1,741

 

 

 

 

 

 

 

 

 

1,741

 

Adjustment to the impact of adoption of ASC 842 related to

   leases

 

 

 

 

 

 

 

 

 

 

 

(9,893

)

 

 

 

 

 

(9,893

)

Balances at June 30, 2019

 

 

118,022,271

 

 

$

118

 

 

$

665,454

 

 

$

(129,344

)

 

$

(4,579

)

 

$

531,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Common

Stock

 

 

Additional

Paid In

Capital

 

 

(Accumulated

Deficit)

Retained

Earnings

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Total

Stockholders’

Equity

 

Balances at December 30, 2018

 

 

124,581,190

 

 

$

124

 

 

$

657,140

 

 

$

(69,202

)

 

$

1,134

 

 

$

589,196

 

Net income

 

 

 

 

 

 

 

 

 

 

 

91,735

 

 

 

 

 

 

91,735

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,713

)

 

 

(5,713

)

Issuance of shares under stock plans

 

 

743,959

 

 

 

1

 

 

 

4,123

 

 

 

 

 

 

 

 

 

4,124

 

Repurchase and retirement of common  stock

 

 

(7,302,878

)

 

 

(7

)

 

 

 

 

 

(163,303

)

 

 

 

 

 

(163,310

)

Share-based compensation

 

 

 

 

 

 

 

 

4,191

 

 

 

 

 

 

 

 

 

4,191

 

Impact of adoption of ASC 842 related to leases

 

 

 

 

 

 

 

 

 

 

 

11,426

 

 

 

 

 

 

11,426

 

Balances at June 30, 2019

 

 

118,022,271

 

 

$

118

 

 

$

665,454

 

 

$

(129,344

)

 

$

(4,579

)

 

$

531,649

 

 

 

 

 

 

 

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)

 

 

 

Twenty-six weeks ended