false000157551500015755152023-03-022023-03-02

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 2, 2023

Sprouts Farmers Market, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-36029

 

32-0331600

(State or other jurisdiction

of incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

5455 E. 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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.

 

 

 

 


 

Item 2.02. Results of Operations and Financial Condition.

On March 2, 2023, Sprouts Farmers Market, Inc. (the “Company”) issued a press release announcing its results of operations for its fourth fiscal quarter and fiscal year ended January 1, 2023. On the same date, the Company posted on its investor relations website, located at investors.sprouts.com, a PowerPoint presentation (the “Earnings Presentation”) that will be used by management during the Company’s earnings conference call. A copy of the press release and the Earnings Presentation are furnished herewith as Exhibits 99.1 and 99.2, respectively, and are incorporated into this Item 2.02 by reference.

The information furnished in this Item 2.02, including Exhibits 99.1 and 99.2 attached hereto and incorporated herein, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 7.01. Regulation FD Disclosure.

The information set forth under Item 2.02 is hereby incorporated by reference.

The Company is also furnishing in this Current Report on Form 8-K a PowerPoint presentation (the “Investor Presentation”) to be used by the Company at various meetings with institutional investors or analysts. The Investor Presentation may be amended or updated at any time and from time to time through another Current Report on Form 8-K, a later company filing or other means. A copy of the Investor Presentation is furnished herewith as Exhibit 99.3 and is incorporated into this Item 7.01 by reference.

The information furnished in this Item 7.01, including Exhibits 99.1, 99.2 and 99.3, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

The Company does not have, and expressly disclaims, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement in the attached press release, Earnings Presentation or Investor Presentation is based.

The text of this Current Report on Form 8-K and the attached press release, Earnings Presentation and Investor Presentation are available on the Company’s investor relations website located at investors.sprouts.com, although the Company reserves the right to discontinue that availability at any time.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit

Number

 

Description

 

 

99.1

 

Press release of Sprouts Farmers Market, Inc., dated March 2, 2023, entitled “Sprouts Farmers Market, Inc. Reports Fourth Quarter and Full Year 2022 Results”

 

 

 

99.2

 

Sprouts Farmers Market, Inc. Presentation, dated March 2, 2023, entitled “Q4 & Full-Year 2022 Earnings”

 

 

 

99.3

 

Sprouts Farmers Market, Inc. Presentation, dated March 2, 2023, entitled "Investor Deck"

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

SPROUTS FARMERS MARKET, INC.

 

 

 

Date: March 2, 2023

 

By:

 

/s/ Brandon F. Lombardi

 

 

Name:

 

Brandon F. Lombardi

 

 

Title:

 

Chief Legal Officer and Corporate Secretary

 

 


 

Exhibit 99.1

 

 

 

img407723_0.jpg 

 

 

 

 

Investor Contact:

Media Contact:

 

Susannah Livingston

media@sprouts.com

 

(602) 682-1584

 

 

susannahlivingston@sprouts.com

 

 

 

Sprouts Farmers Market, Inc. Reports Fourth Quarter and Full Year 2022 Results

 

PHOENIX, Ariz. – (Globe Newswire) – March 2, 2023 – Sprouts Farmers Market, Inc. (Nasdaq: SFM) today reported results for the 13-week fourth quarter and 52-week year ending January 1, 2023.

"We are pleased with our strong fourth-quarter results, closing out the year with double-digit earnings per share growth," said Jack Sinclair, chief executive officer of Sprouts Farmers Market. "These solid trends reflect the resilience of healthy, natural and organic food, and give us confidence in our future business. I want to thank the entire team for driving these results in the face of a challenging year, and for living our values daily."

 


Fourth Quarter Highlights:

Net sales totaled $1.6 billion; a 6% increase from the same period in 2021
Comparable store sales growth of 2.9%
Diluted earnings per share of $0.42; compared to diluted earnings per share of $0.32 in the same period in 2021
Opened 7 new stores

 

Fiscal Year 2022 Highlights:

Net sales totaled $6.4 billion; a 5% increase from 2021
Comparable store sales growth of 2.2%
Diluted earnings per share of $2.39; compared to diluted earnings per share of $2.10 in 2021
Opened 16 new stores, resulting in 386 stores in 23 states as of January 1, 2023

 

Leverage and Liquidity in 2022:

Ended the quarter with $293 million in cash and cash equivalents and a $250 million balance on its $700 million revolving credit facility
Repurchased 6.9 million shares of common stock for a total investment of $200 million
Generated cash from operations of $371 million and invested $112 million in capital expenditures, net of landlord reimbursement

 

First Quarter and Full Year 2023 Outlook:

"While we recognize the near-term economic environment is difficult to predict, the stability of our recent sales is encouraging," said Chip Molloy, chief financial officer of Sprouts Farmers Market. "We are optimistic about our ongoing cash generation and our ability to invest in our business for growth. During 2023, we expect to open 30 new stores. Additionally, as part of a recent real estate portfolio review, we expect to close 11 stores. The closing stores, on average, are approximately 30% larger than our current prototype and are underperforming financially.

 

 


 

The following provides information on our full-year 2023 outlook:

Net sales growth: 4% to 6%
Comparable store sales growth: low single digits
Adjusted EBIT: $355M to $370M
Effective Tax rate: approximately 26%
Adjusted diluted earnings per share: $2.41 to $2.53
Unit growth: 30 new stores, closing 11 stores
Capital expenditures (net of landlord reimbursements):$210M to $230M
 

 

The following provides information on our first quarter 2023 outlook:

Comparable store sales growth: 1.5%-2.5%
Adjusted diluted earnings per share: $0.83 to $0.87

 

Fourth Quarter and Full Year 2022 Conference Call

Sprouts will hold a conference call at 10 a.m. Eastern Standard Time on Thursday, March 2, 2023, during which Sprouts executives will further discuss fourth quarter and fiscal year 2022 financial results.

A webcast of the conference call will be available through Sprouts’ investor relations webpage located at investors.sprouts.com. Participants should register on the website approximately ten minutes prior to the start of the webcast.

A webcast replay will be available at approximately 2:00 p.m. Eastern Standard Time on March 2, 2023. 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; the current inflationary environment and future potential inflationary and/or deflationary trends; the impact of the COVID-19 pandemic; 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 31,000 team members and operates approximately 380 stores in 23 states nationwide. To learn more about Sprouts, and the good it brings communities, visit about.sprouts.com.

 

 


 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

 

Thirteen Weeks Ended

 

 

Fifty-Two Weeks Ended

 

 

 

January 1, 2023

 

 

January 2, 2022

 

 

January 1, 2023

 

 

January 2, 2022

 

Net sales

 

$

1,576,554

 

 

$

1,492,796

 

 

$

6,404,223

 

 

$

6,099,869

 

Cost of sales

 

 

1,003,745

 

 

 

959,568

 

 

 

4,055,659

 

 

 

3,890,657

 

Gross profit

 

 

572,809

 

 

 

533,228

 

 

 

2,348,564

 

 

 

2,209,212

 

Selling, general and administrative expenses

 

 

472,795

 

 

 

448,707

 

 

 

1,855,649

 

 

 

1,748,205

 

Depreciation and amortization (exclusive of depreciation included in cost of sales)

 

 

30,153

 

 

 

30,222

 

 

 

123,530

 

 

 

122,258

 

Store closure and other costs, net

 

 

7,991

 

 

 

2,916

 

 

 

11,025

 

 

 

4,673

 

Income from operations

 

 

61,870

 

 

 

51,383

 

 

 

358,360

 

 

 

334,076

 

Interest expense, net

 

 

1,399

 

 

 

2,844

 

 

 

9,047

 

 

 

11,684

 

Income before income taxes

 

 

60,471

 

 

 

48,539

 

 

 

349,313

 

 

 

322,392

 

Income tax provision

 

 

15,351

 

 

 

12,311

 

 

 

88,149

 

 

 

78,235

 

Net income

 

$

45,120

 

 

$

36,228

 

 

$

261,164

 

 

$

244,157

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.43

 

 

$

0.32

 

 

$

2.41

 

 

$

2.12

 

Diluted

 

$

0.42

 

 

$

0.32

 

 

$

2.39

 

 

$

2.10

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

105,730

 

 

 

112,019

 

 

 

108,232

 

 

 

115,377

 

Diluted

 

 

106,832

 

 

 

112,786

 

 

 

109,139

 

 

 

116,077

 

 

 

 


 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

 

 

January 1, 2023

 

 

January 2, 2022

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

293,233

 

 

$

245,287

 

Accounts receivable, net

 

 

16,108

 

 

 

21,574

 

Inventories

 

 

310,545

 

 

 

265,387

 

Prepaid expenses and other current assets

 

 

53,918

 

 

 

35,468

 

Total current assets

 

 

673,804

 

 

 

567,716

 

Property and equipment, net of accumulated depreciation

 

 

722,241

 

 

 

716,029

 

Operating lease assets, net

 

 

1,106,524

 

 

 

1,072,019

 

Intangible assets, net of accumulated amortization

 

 

184,960

 

 

 

184,960

 

Goodwill

 

 

368,878

 

 

 

368,878

 

Other assets

 

 

13,973

 

 

 

13,513

 

Total assets

 

$

3,070,380

 

 

$

2,923,115

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

172,904

 

 

$

145,901

 

Accrued liabilities

 

 

151,306

 

 

 

155,996

 

Accrued salaries and benefits

 

 

61,574

 

 

 

58,743

 

Current portion of operating lease liabilities

 

 

135,584

 

 

 

151,755

 

Current portion of finance lease liabilities

 

 

1,012

 

 

 

1,078

 

Total current liabilities

 

 

522,380

 

 

 

513,473

 

Long-term operating lease liabilities

 

 

1,145,173

 

 

 

1,095,909

 

Long-term debt and finance lease liabilities

 

 

258,902

 

 

 

259,656

 

Other long-term liabilities

 

 

36,340

 

 

 

36,306

 

Deferred income tax liability

 

 

61,123

 

 

 

57,895

 

Total liabilities

 

 

2,023,918

 

 

 

1,963,239

 

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,
   105,072,756 shares issued and outstanding, January 1, 2023;
   111,114,374 shares issued and outstanding, January 2, 2022

 

 

105

 

 

 

111

 

Additional paid-in capital

 

 

726,345

 

 

 

704,701

 

Accumulated other comprehensive income (loss)

 

 

 

 

 

(3,758

)

Retained earnings

 

 

320,012

 

 

 

258,822

 

Total stockholders' equity

 

 

1,046,462

 

 

 

959,876

 

Total liabilities and stockholders' equity

 

$

3,070,380

 

 

$

2,923,115

 

 

 

 


 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

 

 

 

 

Fifty-Two Weeks Ended

 

 

 

January 1, 2023

 

 

January 2, 2022

 

Operating activities

 

 

 

 

 

 

Net income

 

$

261,164

 

 

$

244,157

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization expense

 

 

127,067

 

 

 

125,541

 

Operating lease asset amortization

 

 

117,315

 

 

 

108,517

 

Store closure and other costs, net

 

 

8,066

 

 

 

4,762

 

Share-based compensation

 

 

16,603

 

 

 

15,883

 

Deferred income taxes

 

 

3,228

 

 

 

(178

)

Other non-cash items

 

 

672

 

 

 

1,167

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

13,381

 

 

 

16,928

 

Inventories

 

 

(45,158

)

 

 

(11,417

)

Prepaid expenses and other current assets

 

 

(18,467

)

 

 

(5,879

)

Other assets

 

 

2,039

 

 

 

(1,782

)

Accounts payable

 

 

13,362

 

 

 

4,523

 

Accrued liabilities

 

 

5,416

 

 

 

610

 

Accrued salaries and benefits

 

 

2,831

 

 

 

(17,951

)

Operating lease liabilities

 

 

(132,889

)

 

 

(120,483

)

Other long-term liabilities

 

 

(3,301

)

 

 

401

 

Cash flows from operating activities

 

 

371,329

 

 

 

364,799

 

Investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(124,010

)

 

 

(102,378

)

Cash flows used in investing activities

 

 

(124,010

)

 

 

(102,378

)

Financing activities

 

 

 

 

 

 

Proceeds from revolving credit facilities

 

 

62,500

 

 

 

 

Payments on revolving credit facilities

 

 

(62,500

)

 

 

 

Payments on finance lease liabilities

 

 

(819

)

 

 

(685

)

Payments of deferred financing costs

 

 

(3,373

)

 

 

 

Repurchase of common stock

 

 

(199,980

)

 

 

(188,343

)

Proceeds from exercise of stock options

 

 

5,041

 

 

 

2,170

 

Cash flows used in financing activities

 

 

(199,131

)

 

 

(186,858

)

Increase in cash, cash equivalents, and restricted cash

 

 

48,188

 

 

 

75,563

 

Cash, cash equivalents, and restricted cash at beginning of the period

 

 

247,004

 

 

 

171,441

 

Cash, cash equivalents, and restricted cash at the end of the period

 

$

295,192

 

 

$

247,004

 

 

 


 

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 EBITDA and EBIT. 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.

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 EBITDA to net income for the thirteen and fifty-two weeks ended January 1, 2023 and January 2, 2022:

 


 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

NON-GAAP MEASURE RECONCILIATION

(UNAUDITED)

(IN THOUSANDS)

 

 

 

Thirteen Weeks Ended

 

 

Fifty-Two Weeks Ended

 

 

 

January 1, 2023

 

 

January 2, 2022

 

 

January 1, 2023

 

 

January 2, 2022

 

Net income

 

$

45,120

 

 

$

36,228

 

 

$

261,164

 

 

$

244,157

 

Income tax provision

 

 

15,351

 

 

 

12,311

 

 

 

88,149

 

 

 

78,235

 

Interest expense, net

 

 

1,399

 

 

 

2,844

 

 

 

9,047

 

 

 

11,684

 

Earnings before interest and taxes (EBIT)

 

 

61,870

 

 

 

51,383

 

 

 

358,360

 

 

 

334,076

 

Depreciation, amortization and accretion

 

 

31,010

 

 

 

31,119

 

 

 

127,067

 

 

 

125,541

 

EBITDA

 

$

92,880

 

 

$

82,502

 

 

$

485,427

 

 

$

459,617

 

 

 

 

###

 

Source: Sprouts Farmers Market, Inc

Phoenix, AZ

3/2/23

 


Slide 1

Q4 & Full-Year 2022 Earnings March 2023 Exhibit 99.2


Slide 2

Forward-Looking Statements Certain statements in this presentation are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein (including, but not limited to, statements to the effect that Sprouts Farmers Market, Inc. (the “Company”) or its management "anticipates," "plans," "estimates," "expects," "believes," or the negative of these terms and other similar expressions) that are not statements of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the Company’s guidance, outlook, strategy, financial targets, growth and opportunities. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this presentation. 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 rapid growth; the Company’s ability to maintain or improve its comparable store sales and operating margins; the Company’s ability to identify and react to trends in consumer preferences; product supply disruptions; equipment supply disruptions; general economic conditions; accounting standard changes; the current inflationary environment and future potential inflationary and/or deflationary trends; risks associated with the COVID-19 pandemic; and other factors as set forth from time to time in the Company’s Securities and Exchange Commission filings. The Company intends these forward-looking statements to speak only as of the date of this presentation and does not undertake to update or revise them as more information becomes available, except as required by law. Non-GAAP Financial Measures We refer to EBIT, adjusted EBIT, adjusted EBIT Margin, and adjusted diluted earnings per share, each of which is a Non-GAAP Financial Measure. These measures are not prepared in accordance with, and are not intended as alternatives to, generally accepted accounting principles in the United States, or GAAP. The Company's management believes that such measures provide 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 EBIT, as net income before interest expense and provision for income tax, and adjusted EBIT as EBIT, excluding the impact of special items. Adjusted EBIT Margin reflects adjusted EBIT, divided by net sales for the applicable period. The Company defines adjusted diluted earnings per share as diluted earnings per share excluding the impact of special items. 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 you should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. To the extent forward looking non-GAAP financial measures are provided herein, they are not reconciled to comparable forward-looking GAAP measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation.


Slide 3

Sprouts 2022 Accomplishments Sprouts Brand reached $1billion in sales Opened 16 new stores, with 9 in the new format Launched approximately 8,400 differentiated products Increased sales of local produce by over 100% Diluted EPS up 14% Created 1,600 new jobs, promoted 24% of our team members, and filled 64% of store manager positions with internal candidates Ranked among Corporate Knights’ 100 Most Sustainable Corporations in the World


Slide 4

Q4 2022 Highlights Net Sales +6% Comps (1) +2.9% Diluted EPS $0.42 Diluted EPS Growth 31% New Stores 7 Cash Generation $65M From Operations Share Repurchases $45M Comparable Store Sales


Slide 5

Fourth Quarter Sales Drivers Continued strength in convenient deli grab-and-go meals Differentiated departments (e.g. Dairy, Bakery, and Frozen) continue to see year-over-year growth Ecommerce grew 17% and remains elevated


Slide 6

Ecommerce Remains Here to Stay; Adding DoorDash Marketplace to our Omni Channel In-store Pick-up & Delivery available to all customers in all stores Ecommerce Penetration 50% of online orders can be identified to a customer


Slide 7

Full-Year 2022 Highlights Net Sales +5% Comps (1) +2.2% Diluted EPS $2.39 EPS Growth 14% New Stores 16 Cash Generation $371M From Operations Share Repurchases $200M Comparable Store Sales


Slide 8

Maintaining a Structurally Improved Margin Profile 8 ($ in mm) (2) ADJUSTED EBIT & Adjusted EBIT Margin(1) See the Appendix to this presentation for a reconciliation of EBIT to adjusted EBIT – for 2021 and 2022, adjustments to EBIT were immaterial; thus, only EBIT is presented. 2020 is presented on a 52-week basis


Slide 9

From 2015 through 2022: Repurchased 57 million shares Reduced shares outstanding by 37% $412M remaining on our share repurchase authorization* $0 Total Annual Share Repurchase Driving Shareholder Value Through An Ongoing Share Repurchase Program ($ in mm) * As of Jan 1, 2023


Slide 10

Full-Year 2023 Outlook Approximately 30 new stores, closing 11 Capex $210M to $230M First Quarter, 2023: Comparable sales growth between 1.5% and 2.5% and Adjusted EPS $0.83 to $0.87 Total sales growth between 4% and 6% Comp sales growth in the low single digits Adjusted earnings before interest & taxes $355M to $370M Adjusted earnings per share (EPS) $2.41 to $2.53


Slide 11

Appendix


Slide 12

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES NON-GAAP MEASURE RECONCILIATION (UNAUDITED) (IN THOUSANDS) The following table shows a reconciliation of EBIT and adjusted EBIT to net income, as well as a reconciliation of net income and diluted earnings per share to adjusted net income and adjusted diluted earnings per share for the fifty-two weeks ended Jan 1, 2023, Jan 2, 2022, Jan 3, 2021 (53 weeks), and Dec 29, 2019: Appendix Includes professional fees related to strategic initiatives. After-tax impact includes the tax benefit on the pre-tax charge. Includes the direct costs associated with store closures and relocation.

Slide 1

INVESTOR DECK March 2023 Exhibit 99.3


Slide 2

Forward-Looking Statements Certain statements in this presentation are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein (including, but not limited to, statements to the effect that Sprouts Farmers Market, Inc. (the “Company”) or its management "anticipates," "plans," "estimates," "expects," "believes," or the negative of these terms and other similar expressions) that are not statements of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the Company’s guidance, outlook, strategy, financial targets, growth and opportunities. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this presentation. 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 rapid growth; the Company’s ability to maintain or improve its comparable store sales and operating margins; the Company’s ability to identify and react to trends in consumer preferences; product supply disruptions; equipment supply disruptions; general economic conditions; accounting standard changes; risks associated with the COVID-19 pandemic; 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. The Company intends these forward-looking statements to speak only as of the date of this presentation and does not undertake to update or revise them as more information becomes available, except as required by law. Non-GAAP Financial Measures We refer to EBIT, adjusted EBIT, adjusted EBIT Margin, adjusted EBITDA, adjusted net income, adjusted diluted earnings per share and ROIC, each of which is a Non-GAAP Financial Measure. These measures are not prepared in accordance with, and are not intended as alternatives to, generally accepted accounting principles in the United States, or GAAP. The Company's management believes that such measures provide 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 EBIT, as net income before interest expense and provision for income tax, and adjusted EBIT as EBIT, excluding the impact of special items. Adjusted EBIT Margin reflects adjusted EBIT, divided by net sales for the applicable period. The Company defines adjusted EBITDA as net income before interest expense, provision for income tax, and depreciation, amortization and accretion, excluding the impact of special items. The Company defines adjusted net income and adjusted diluted earnings per share as net income and diluted earnings per share, respectively, excluding the impact of special items. The Company defines ROIC as net operating profit after tax (“NOPAT”), including the effect of capitalized operating leases, divided by average invested capital. 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 you should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. To the extent forward looking non-GAAP financial measures are provided herein, they are not reconciled to comparable forward-looking GAAP measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation.


Slide 3

FIND YOUR HEALTHY 3


Slide 4

A farmers market experience – open layout of fresh produce at the heart of the store, community feel, treasure hunt for unique products A differentiated assortment of healthy alternatives and good-for-you options Purposeful curation of responsibly and locally sourced products Happy, helpful team members Culture (care, own it, love being different) Making the highest quality fresh foods accessible to all Owned, integrated fresh produce distribution channel WHAT DEFINES SPROUTS AND WHAT MAKES US DIFFERENT


Slide 5

Targeting at least 30 stores in 2023 with 10%+ annual unit growth beyond 2023 and incredible white space Strong and improving store unit economics Sustainable, robust cash flows with shareholder-friendly capital allocation Building an advantaged fresh supply chain Innovative & differentiated products with lifestyle-friendly ingredients Unique farmers market experience WHY INVEST IN SPROUTS? A POWERFUL GROWTH BUSINESS


Slide 6

CO 2021 Environment, Social, & Governance Highlights At the core of our identity is a genuine commitment to environmental sustainability. We are taking steps to reduce our carbon footprint and our natural resource intake while providing our customers with local, organic, and other sustainable food choices. We are diverting food from landfills and providing it to those in need. MTCO2e averted through food recovery programs CLIMATE 172 Sprouts brand products launched with How2Recycle logo reusable bags were used at checkout tons of plastic film recycled from customer and in-store use of our stores do not use single-use plastic bags at checkout PACKAGING & PLASTICS 11M landfill diversion rate 60% WASTE FOOD WASTE RECOVERY 78% of food waste recovered, and donated equivalent to 26 million meals 80% 60% 40% 20% 0% 2019 2020 2021 Food waste recovery rate 2 500 39% 49k tons of food and recyclables diverted from landfill 79k reduction in carbon emissions per sq. ft. over a 2019 baseline 10%


Slide 7

Millions of customers choose Sprouts because they can find products that are grown and produced in ways that are healthier for the planet and people. Our stores are stocked with a wide variety of organically grown, non-GMO, and plant-based options that lower the environmental impact of the food consumed. 100% of Sprouts Butcher Shop chicken and pork are raised without antibiotics 100% cage-free, organic, or free-range eggs Committed to improving chicken welfare in providing environmental enrichments by 2024, reduced stocking density by 2025, and allow for more humane processing, through CAS (controlled-atmosphere stunning), by 2026 $2.7B in sales of products with a social or environmental attribute 24% of total sales from organic products totaling nearly $1.5B in sales 100% of Sprouts Butcher Shop pork is from suppliers that utilize open-pen or group-housed facilities 7 2021 Sustainable & Responsible Sourcing 250 local growers provide fresh seasonally grown produce 25% increase in plant-based product sales 100% responsibly sourced seafood


Slide 8

Providing safe and healthy food is at the core of our commitment to health and well-being. We collaborate with our team members, supply chain partners, community organizations, and industry experts to promote food safety, support workers’ rights, source responsibly, and develop a diverse and inclusive workplace. 5,180 safety audits completed 21,000 safety training hours completed 22% reduction in workers’ safety claims over the prior year TEAM MEMBER SAFETY $3M awarded local programs supporting youth nutrition education and food system equity 120 local non-profit partners supported in the communities we serve $3.1B in sales of products labeled to promote health and nutrition attributes 6,567 food safety audits completed Over 1M temperature checks conducted on sales floor COMMUNITY IMPACT 1,300 new jobs created 22% of team members promoted 51% female and 48% racially/ethnically diverse workforce 585,000 hours of in-store training delivered SAFE AND HEALTHY FOOD TEAM MEMBER DEVELOPMENT & INCLUSION 8 2021 Social


Slide 9

We pride ourselves on operating with integrity, accountability, and transparency. Our ESG goals and initiatives are integrated throughout our business strategy, and strong oversight by our executive leadership team and Board of Directors ensures that the long-term interests of our stakeholders are factored into our decision making. 88% of board members are independent 25% of board members are female and 25% are racially/ethnically diverse Formed a board-level Risk Committee to monitor enterprise risk management program and provide oversight of our risks related to cybersecurity, critical systems, and environmental and social matters among others. RISK MANAGEMENT Maintaining our customers’ and team members’ trust by safeguarding their personal data and respecting their privacy decisions is critical to our success. We did not experience any data breaches during 2021 due to our cybersecurity best practices. DATA PRIVACY & CYBER SECURITY COPORATE GOVERNANCE (1) Acting ethically and with integrity helps us maintain our reputation with our customers as a preferred shopping destination, as a safe and welcoming place to work with our team members, and as a responsible corporate citizen with our communities and stakeholders. Established Commitment to Human Rights with Board oversight that sets forth our high standards and expectations for human rights and fair labor in our operations and supply chain. 19433 ETHICS AND COMPLIANCE 9 2021 Governance As of June 1, 2022


Slide 10

Sprouts’ Long- Term Strategy 10+% UNIT GROWTH (1) LOW DOUBLE- DIGIT EARNINGS GROWTH EXPANDING ROIC REFINE BRAND AND MARKETING APPROACH WIN WITH TARGET CUSTOMERS UPDATE FORMAT AND EXPAND IN SELECT MARKETS CREATING ADVANTAGED SUPPLY CHAIN DIGITAL-FIRST MARKETING PROGRAM FOCUSED ON BUILDING RELATIONSHIPS ROBUST OMNICHANNEL EXPERIENCE PRODUCTS STEEPED IN INNOVATION SMALLER STORES FOCUSED ON HIGHER RETURNS & DE-RISKING OUR GROWTH FRESHER PRODUCTS AND INCREASED LOCAL OFFERING Open at least 30 stores in 2023 with 10%+ unit growth starting in 2024 These are targets and not projections; they are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based on assumptions with respect to future decisions, which may be subject to change. Actual results may vary and the variances may be material. Nothing in this presentation should be regarded as a representation that these targets will be achieved and the Company undertakes no duty to update its targets. See “Forward-Looking Statements.” DELIVER ON FINANCIAL TARGETS (2) INSPIRE & ENGAGE OUR TALENT TO CREATE A BEST PLACE TO WORK CULTURE, TALENT, DEVELOPMENT, AND REWARDS


Slide 11

Sprouts Shopper: Higher Income Consumer who Craves Health and Wellness $121K Avg. HHI 49% $100K + 46 Avg. Age 69% College/ Grad 57% Married/ Relationship 2.4 Avg. People in Household Demographics Over Index on Lifestyle Choices 32% committed to buying organic 30% committed to dietary lifestyle (vegan, gluten-free, pesca, etc.) 69% are concerned about the environment 41% review nutrition labels 28% are looking for fair trade / socially responsible 27% are looking to try new things 41% research recipes online 28% listen to podcasts Gen Z & Millennial opportunity Less susceptible to economic downturns Slightly higher educated Serving each family member’s need Typically dual income They are engaged and connected to what they eat – how it makes them feel, where it comes from, the role it can play in their lives. 11


Slide 12

Continuing to Expand Customer Engagement; “Speaking” to more than 6M Customers Across Digital Platforms 12 Digitally connected with 13% more customers in 2022 Active SMS Subscribers Active Email Subscribers Active Push Subscribers Identifiable Customers: 7% of customers can be linked back to a Sprouts Account Their frequency is up 6% 17% of transactions can be linked to a Sprouts account An increase of 68% compared to 2021


Slide 13

Once Acquired, Sprouts’ Customer Affinity is Very Strong and in-line with Best-in-Class Peers Net Promoter Score (NPS) – Among Frequent Shoppers Frequent as defined as in Respondent’s Top 3 Most Visited for Grocery Promoters Passives Detractors Source: Sprouts NPS study, September 2022 +55 +25 +27 NPS +71 +58 +57 +61 +43 +69 +41 +50 +60 +37 +73


Slide 14

Pivoting Our Marketing Strategy to Drive More Profitable Growth with More Meaningful Connections OUR DIGITAL-FIRST MARKETING PROGRAM IS FOCUSED ON BUILDING RELATIONSHIPS WITH OUR MOST IMPORTANT CUSTOMERS Target Audience: Connect with Health Enthusiasts and Selective Shoppers Personalization: Improve customer connections in real-time across all their screens Connective Relevance: Messaging and comms to answer target audience’s needs and affinities TARGET HIGH VALUE CUSTOMERS BUILD CUSTOMER RELATIONSHIPS DATA-DRIVEN MEDIA Drive Increased Brand Consideration with Personalization to Strengthen Customer Engagement and Drive Profitable Transactions MEET CUSTOMER NEEDS Performance: Optimize media investments to maximize customer engagement


Slide 15

Ecommerce Slightly Increasing; DoorDash Marketplace Available in all our Markets In store Pick-up & Delivery available to all customers in all stores & markets Ecommerce Penetration 50% of online orders can be identified to a customer


Slide 16

Produce Remains the Heart of the Store and Priced Below Most in the Marketplace Hybrid produce buying model: centralized and regional teams allow us to be flexible and react to the produce markets quickly Meaningful farmer partnerships: delivers new varietals and favorable pricing to our customers through spot buys New distribution channels: increase local buying, and deliver fresher products to our customers Building a path forward: expand our farmer network


Slide 17

17 Sprouts’ Stores are Filled with a Curation of Differentiated Good-For-You Products More than 70% of Products Sold in Sprouts are Attribute Driven: Organics, Paleo, Keto, Plant Based, Non-GMO, Gluten Free, Vegan, Dairy-free, Grass Fed, Raw Includes all produce


Slide 18

18 Sprouts Aims To Grow a Differentiated Sprouts Brand Sprouts Brand Sales Penetration


Slide 19

19 Deliver a Unique, Friendly Experience with Healthy, Innovative Products - in a Smaller Box with Higher Returns Format to Stay True to our Fresh-focused Farmers Market Heritage Prioritize Categories For Growth Potential Continue to Offer all Categories More Productive Store New store size to decrease from 30K to 23K square feet


Slide 20

High Growth Retailer Unit growth (1) 300-400 New Stores in Expansion Markets 2019, 2020, 2021, 2022 actual unit growth, 2023 outlook, & 10% unit growth in 2024 and thereafter Expansion Markets Existing DCs Future DCs Existing Markets


Slide 21

21 Creating an Advantaged Fresh Supply Chain of DCs within 250 Miles of the Majority of Stores Optimizing our Supply Chain ~100K store deliveries per year: Expand capabilities Connect supply chain to store operations via updated systems – DC replenishment and PI/CAO Set foundation for continued demand Replace SoCal & Expand TX Fresh DCs Add ripening rooms SoCal, AZ & TX - for fresher product and to control shrink Benefits of Closer DCs: Efficiency Reduced miles on the road & diesel costs by 9% in 2022 Reduction of freight shipping Service Reduced lead time 2 hr static delivery windows -- improving store labor planning Local farms Partnering with over 150 local farmers impacting 250 locally grown products throughout our 7 DCs


Slide 22

22 Long-Term Strategic Financial Targets (1) Low Double-Digit Earnings Growth and Expansion of ROIC Cost to Build Reduced & Attractive New Store Economics 10+% unit growth or more (2) Low single digit comps Stable to Expanding EBIT Margins These are targets and not projections; they are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based on assumptions with respect to future decisions, which may be subject to change. Actual results may vary and the variances may be material. Nothing in this presentation should be regarded as a representation that these targets will be achieved and the Company undertakes no duty to update its targets. See “Forward-Looking Statements.” Open at least 30 stores in 2023 with 10%+ unit growth starting in 2024


Slide 23

23 Low Single Digit Comps Targets with Stable to Expanding EBIT Margins(1) All Stores Smarter Promotions Improved Buying Supply Chain Optimization Labor Productivity Improving Shrink Headwinds from Labor & Benefit Costs Key Comp Drivers Brand and marketing Innovative, differentiated products Omnichannel offering Better new store ramp with smarter promotional approach New Stores Reduction in Cost to Build (improved DA) Lower Rents driven by Smaller Boxes Less Efficient Operations during maturity ramp These are targets and not projections; they are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based on assumptions with respect to future decisions, which may be subject to change. Actual results may vary and the variances may be material. Nothing in this presentation should be regarded as a representation that these targets will be achieved and the Company undertakes no duty to update its targets. See “Forward-Looking Statements.”


Slide 24

24 New Stores: Four-Wall Box Target Economics (1) Sales EBITDA Margins Box opens on average at $13M in year 1 annual sales Grows 20% to 25% over next the next 4 years Break even year 1 Grows to a blended ~8% EBITDA Margins over the next 4 years Cash on Cash Return Low to mid thirties by year 5 Cash Investment $3.8M average new store build including CapEx, Inventory and Pre-opening expenses (2) These are targets and not projections; they are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based on assumptions with respect to future decisions, which may be subject to change. Actual results may vary and the variances may be material. Nothing in this presentation should be regarded as a representation that these targets will be achieved and the Company undertakes no duty to update its targets. See “Forward-Looking Statements.” Reflective of inflationary environment


Slide 25

25 ($ in mm) ($ in mm) (2) (2) (2) See the Appendix to this presentation for a reconciliation of adjusted diluted EPS to net income 2020 is presented on a 52-week basis for Net Sales and Adjusted Diluted Earnings Per Share and on 53-week basis for Net Cash Provided by Operations Sprouts is on a Stronger Foundation: Strategic Initiatives Beginning to Take Hold NET SALES NET CASH PROVIDED by OPERATIONS ADJUSTED DILUTED Earnings Per Share (1)


Slide 26

Gross Margin Has Increased and Structurally Changed Structural Changes Driven By: Promotional strategy changes Differentiated products Operational & shrink improvements Addition of two new distribution centers in FL & CO An income statement recast in 2018 moved buying and occupancy from Cost of Sales to SG&A – revising gross margin up more than 400 bps


Slide 27

Maintained a Structurally Improved Margin Profile 27 See the Appendix to this presentation for a reconciliation of EBIT to adjusted EBIT; For 2021 & 2022, adjustments to EBIT were immaterial; thus, only EBIT is presented. 2020 is presented on a 52- week basis ($ in mm) (2) ADJUSTED EBIT & Adjusted EBIT Margin(1)


Slide 28

In-line with Strategic Goals…Improving ROIC 28 ROIC (1) ROIC is a non-GAAP measure defined as net operating profit after taxes divided by average invested capital. See the Appendix to this presentation for a reconciliation of ROIC to net income 2020 is presented on a 53-week basis (2)


Slide 29

Capital Expense Driven by New Stores Capex Spend as % of Sales 1.5% ~3.5% 2.8% ~3.5% 2023 and beyond are estimates Capital expenditures are net of landlord reimbursement 1.3% 1.7% 29


Slide 30

From 2015 through 2022: Repurchased 57 million shares Reduced shares outstanding 37% $412M remaining on our share repurchase authorization* $0 Total Annual Share Repurchase ($ in mm) In Addition To Investing In Growth, We Drive Shareholder Value Through An Ongoing Share Repurchase Program * As of Jan 1, 2023


Slide 31

FIND YOUR HEALTHY IN OUR ASSORTMENT OF FRESH, HEALTHY FOODS Sprouts delivers a unique farmers market experience: bringing together passionate, knowledgeable team members, and the best assortment of high-quality food that is good for us and good for the world.


Slide 32

APPENDIX


Slide 33

Executive Management Team with Leading Grocery & Retail Experience Jack Sinclair Chief Executive Officer since 2019 Lawrence “Chip” Molloy Chief Financial Officer since 2021 Scott Neal Chief Merchandising Officer since 2022 (joined SFM in 2020) Dan Sanders Chief Store Operations Officer since 2022 (joined SFM in 2016) Dave McGlinchey Chief Strategy Officer since 2022 (joined SFM in 2017) Brandon Lombardi Chief Legal Officer since 2012 Kim Coffin Senior VP, Chief Forager since 2022 (joined SFM in 2012) Joe Hurley, Senior VP, Supply Chain since 2019 Hunter Bennett Senior VP, Information Technology since 2020 (joined SFM in 2014) Timmi Zalatoris Senior VP, Human Resources since 2020 (joined SFM in 2017) Nick Konat President & Chief Operating Officer since 2022 Alisa Gmlich Senior VP, Chief Marketing Officer since 2022


Slide 34

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES NON-GAAP MEASURE RECONCILIATION (UNAUDITED) (IN THOUSANDS) The following table shows a reconciliation of EBITDA and adjusted EBITDA to net income for the fifty-two weeks ended Jan 1, 2023, Jan 2, 2022, Jan 3, 2021 (53 weeks), and Dec 29, 2019: Appendix Includes professional fees related to strategic initiatives. After-tax impact includes the tax benefit on the pre-tax charge. Includes the direct costs associated with store closures and relocation.


Slide 35

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES NON-GAAP MEASURE RECONCILIATION (UNAUDITED) (IN THOUSANDS) The following table shows a reconciliation of EBIT and adjusted EBIT to net income, as well as a reconciliation of net income and diluted earnings per share to adjusted net income and adjusted diluted earnings per share for the fifty-two weeks ended Jan 1, 2023, Jan 2, 2022, Jan 3, 2021 (53 weeks), and Dec 29, 2019: Appendix Includes professional fees related to strategic initiatives. After-tax impact includes the tax benefit on the pre-tax charge. Includes the direct costs associated with store closures and relocation.


Slide 36

Appendix The following table shows a reconciliation of ROIC to net income for the Company’s 2019 , 2020, 2021 and 2022 fiscal years SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES NON-GAAP MEASURE RECONCILIATION (UNAUDITED) (IN MILLIONS)

v3.22.4
Document and Entity Information
Mar. 02, 2023
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Mar. 02, 2023
Entity Registrant Name Sprouts Farmers Market, Inc.
Entity Central Index Key 0001575515
Entity Emerging Growth Company false
Entity File Number 001-36029
Entity Incorporation, State or Country Code DE
Entity Tax Identification Number 32-0331600
Entity Address, Address Line One 5455 E. High Street
Entity Address, Address Line Two Suite 111
Entity Address, City or Town Phoenix
Entity Address, State or Province AZ
Entity Address, Postal Zip Code 85054
City Area Code 480
Local Phone Number 814-8016
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of Each Class Common Stock, $0.001 par value
Trading Symbol SFM
Security Exchange Name NASDAQ

{
 "instance": {
  "sfm-20230302.htm": {
   "axisCustom": 0,
   "axisStandard": 0,
   "baseTaxonomies": {
    "http://xbrl.sec.gov/dei/2022": 23
   },
   "contextCount": 1,
   "dts": {
    "inline": {
     "local": [
      "sfm-20230302.htm"
     ]
    },
    "labelLink": {
     "local": [
      "sfm-20230302_lab.xml"
     ]
    },
    "presentationLink": {
     "local": [
      "sfm-20230302_pre.xml"
     ]
    },
    "schema": {
     "local": [
      "sfm-20230302.xsd"
     ],
     "remote": [
      "http://www.xbrl.org/2003/xbrl-instance-2003-12-31.xsd",
      "http://www.xbrl.org/2003/xbrl-linkbase-2003-12-31.xsd",
      "http://www.xbrl.org/2003/xl-2003-12-31.xsd",
      "http://www.xbrl.org/2003/xlink-2003-12-31.xsd",
      "http://www.xbrl.org/2005/xbrldt-2005.xsd",
      "http://www.xbrl.org/2006/ref-2006-02-27.xsd",
      "https://www.xbrl.org/2020/extensible-enumerations-2.0.xsd",
      "https://www.xbrl.org/dtr/type/2020-01-21/types.xsd",
      "https://xbrl.fasb.org/srt/2022/elts/srt-2022.xsd",
      "https://xbrl.fasb.org/srt/2022/elts/srt-roles-2022.xsd",
      "https://xbrl.fasb.org/srt/2022/elts/srt-types-2022.xsd",
      "https://xbrl.fasb.org/us-gaap/2022/elts/us-gaap-2022.xsd",
      "https://xbrl.fasb.org/us-gaap/2022/elts/us-roles-2022.xsd",
      "https://xbrl.fasb.org/us-gaap/2022/elts/us-types-2022.xsd",
      "https://xbrl.sec.gov/country/2022/country-2022.xsd",
      "https://xbrl.sec.gov/dei/2022/dei-2022.xsd"
     ]
    }
   },
   "elementCount": 24,
   "entityCount": 1,
   "hidden": {
    "http://xbrl.sec.gov/dei/2022": 2,
    "total": 2
   },
   "keyCustom": 0,
   "keyStandard": 23,
   "memberCustom": 0,
   "memberStandard": 0,
   "nsprefix": "sfm",
   "nsuri": "http://www.sprouts.com/20230302",
   "report": {
    "R1": {
     "firstAnchor": {
      "ancestors": [
       "span",
       "p",
       "body",
       "html"
      ],
      "baseRef": "sfm-20230302.htm",
      "contextRef": "C_a509e44b-3da3-43ab-bc84-a20ea204fb0a",
      "decimals": null,
      "first": true,
      "lang": "en-US",
      "name": "dei:DocumentType",
      "reportCount": 1,
      "unique": true,
      "unitRef": null,
      "xsiNil": "false"
     },
     "groupType": "document",
     "isDefault": "true",
     "longName": "100000 - Document - Document and Entity Information",
     "menuCat": "Cover",
     "order": "1",
     "role": "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation",
     "shortName": "Document and Entity Information",
     "subGroupType": "",
     "uniqueAnchor": {
      "ancestors": [
       "span",
       "p",
       "body",
       "html"
      ],
      "baseRef": "sfm-20230302.htm",
      "contextRef": "C_a509e44b-3da3-43ab-bc84-a20ea204fb0a",
      "decimals": null,
      "first": true,
      "lang": "en-US",
      "name": "dei:DocumentType",
      "reportCount": 1,
      "unique": true,
      "unitRef": null,
      "xsiNil": "false"
     }
    }
   },
   "segmentCount": 0,
   "tag": {
    "dei_AmendmentFlag": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Boolean flag that is true when the XBRL content amends previously-filed or accepted submission.",
        "label": "Amendment Flag",
        "terseLabel": "Amendment Flag"
       }
      }
     },
     "localname": "AmendmentFlag",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "booleanItemType"
    },
    "dei_CityAreaCode": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Area code of city",
        "label": "City Area Code",
        "terseLabel": "City Area Code"
       }
      }
     },
     "localname": "CityAreaCode",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "normalizedStringItemType"
    },
    "dei_CoverAbstract": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Cover page.",
        "label": "Cover [Abstract]"
       }
      }
     },
     "localname": "CoverAbstract",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "xbrltype": "stringItemType"
    },
    "dei_DocumentPeriodEndDate": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "For the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period.  The format of the date is YYYY-MM-DD.",
        "label": "Document Period End Date",
        "terseLabel": "Document Period End Date"
       }
      }
     },
     "localname": "DocumentPeriodEndDate",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "dateItemType"
    },
    "dei_DocumentType": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.",
        "label": "Document Type",
        "terseLabel": "Document Type"
       }
      }
     },
     "localname": "DocumentType",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "submissionTypeItemType"
    },
    "dei_EntityAddressAddressLine1": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Address Line 1 such as Attn, Building Name, Street Name",
        "label": "Entity Address, Address Line One",
        "terseLabel": "Entity Address, Address Line One"
       }
      }
     },
     "localname": "EntityAddressAddressLine1",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "normalizedStringItemType"
    },
    "dei_EntityAddressAddressLine2": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Address Line 2 such as Street or Suite number",
        "label": "Entity Address, Address Line Two",
        "terseLabel": "Entity Address, Address Line Two"
       }
      }
     },
     "localname": "EntityAddressAddressLine2",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "normalizedStringItemType"
    },
    "dei_EntityAddressCityOrTown": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Name of the City or Town",
        "label": "Entity Address, City or Town",
        "terseLabel": "Entity Address, City or Town"
       }
      }
     },
     "localname": "EntityAddressCityOrTown",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "normalizedStringItemType"
    },
    "dei_EntityAddressPostalZipCode": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Code for the postal or zip code",
        "label": "Entity Address, Postal Zip Code",
        "terseLabel": "Entity Address, Postal Zip Code"
       }
      }
     },
     "localname": "EntityAddressPostalZipCode",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "normalizedStringItemType"
    },
    "dei_EntityAddressStateOrProvince": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Name of the state or province.",
        "label": "Entity Address, State or Province",
        "terseLabel": "Entity Address, State or Province"
       }
      }
     },
     "localname": "EntityAddressStateOrProvince",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "stateOrProvinceItemType"
    },
    "dei_EntityCentralIndexKey": {
     "auth_ref": [
      "r1"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.",
        "label": "Entity Central Index Key",
        "terseLabel": "Entity Central Index Key"
       }
      }
     },
     "localname": "EntityCentralIndexKey",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "centralIndexKeyItemType"
    },
    "dei_EntityEmergingGrowthCompany": {
     "auth_ref": [
      "r1"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Indicate if registrant meets the emerging growth company criteria.",
        "label": "Entity Emerging Growth Company",
        "terseLabel": "Entity Emerging Growth Company"
       }
      }
     },
     "localname": "EntityEmergingGrowthCompany",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "booleanItemType"
    },
    "dei_EntityFileNumber": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.",
        "label": "Securities Act File Number",
        "terseLabel": "Entity File Number"
       }
      }
     },
     "localname": "EntityFileNumber",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "fileNumberItemType"
    },
    "dei_EntityIncorporationStateCountryCode": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Two-character EDGAR code representing the state or country of incorporation.",
        "label": "Entity Incorporation, State or Country Code",
        "terseLabel": "Entity Incorporation, State or Country Code"
       }
      }
     },
     "localname": "EntityIncorporationStateCountryCode",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "edgarStateCountryItemType"
    },
    "dei_EntityRegistrantName": {
     "auth_ref": [
      "r1"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.",
        "label": "Entity Registrant Name",
        "terseLabel": "Entity Registrant Name"
       }
      }
     },
     "localname": "EntityRegistrantName",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "normalizedStringItemType"
    },
    "dei_EntityTaxIdentificationNumber": {
     "auth_ref": [
      "r1"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.",
        "label": "Entity Tax Identification Number",
        "terseLabel": "Entity Tax Identification Number"
       }
      }
     },
     "localname": "EntityTaxIdentificationNumber",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "employerIdItemType"
    },
    "dei_LocalPhoneNumber": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Local phone number for entity.",
        "label": "Local Phone Number",
        "terseLabel": "Local Phone Number"
       }
      }
     },
     "localname": "LocalPhoneNumber",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "normalizedStringItemType"
    },
    "dei_PreCommencementIssuerTenderOffer": {
     "auth_ref": [
      "r3"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.",
        "label": "Pre-commencement Issuer Tender Offer",
        "terseLabel": "Pre-commencement Issuer Tender Offer"
       }
      }
     },
     "localname": "PreCommencementIssuerTenderOffer",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "booleanItemType"
    },
    "dei_PreCommencementTenderOffer": {
     "auth_ref": [
      "r4"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.",
        "label": "Pre-commencement Tender Offer",
        "terseLabel": "Pre-commencement Tender Offer"
       }
      }
     },
     "localname": "PreCommencementTenderOffer",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "booleanItemType"
    },
    "dei_Security12bTitle": {
     "auth_ref": [
      "r0"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Title of a 12(b) registered security.",
        "label": "Title of 12(b) Security",
        "terseLabel": "Title of Each Class"
       }
      }
     },
     "localname": "Security12bTitle",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "securityTitleItemType"
    },
    "dei_SecurityExchangeName": {
     "auth_ref": [
      "r2"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Name of the Exchange on which a security is registered.",
        "label": "Security Exchange Name",
        "terseLabel": "Security Exchange Name"
       }
      }
     },
     "localname": "SecurityExchangeName",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "edgarExchangeCodeItemType"
    },
    "dei_SolicitingMaterial": {
     "auth_ref": [
      "r5"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.",
        "label": "Soliciting Material",
        "terseLabel": "Soliciting Material"
       }
      }
     },
     "localname": "SolicitingMaterial",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "booleanItemType"
    },
    "dei_TradingSymbol": {
     "auth_ref": [],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Trading symbol of an instrument as listed on an exchange.",
        "label": "Trading Symbol",
        "terseLabel": "Trading Symbol"
       }
      }
     },
     "localname": "TradingSymbol",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "tradingSymbolItemType"
    },
    "dei_WrittenCommunications": {
     "auth_ref": [
      "r6"
     ],
     "lang": {
      "en-us": {
       "role": {
        "documentation": "Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.",
        "label": "Written Communications"
       }
      }
     },
     "localname": "WrittenCommunications",
     "nsuri": "http://xbrl.sec.gov/dei/2022",
     "presentation": [
      "http://www.sprouts.com/20230302/taxonomy/role/Role_DocumentDocumentAndEntityInformation"
     ],
     "xbrltype": "booleanItemType"
    }
   },
   "unitCount": 0
  }
 },
 "std_ref": {
  "r0": {
   "Name": "Exchange Act",
   "Number": "240",
   "Publisher": "SEC",
   "Section": "12",
   "Subsection": "b",
   "role": "http://www.xbrl.org/2003/role/presentationRef"
  },
  "r1": {
   "Name": "Exchange Act",
   "Number": "240",
   "Publisher": "SEC",
   "Section": "12",
   "Subsection": "b-2",
   "role": "http://www.xbrl.org/2003/role/presentationRef"
  },
  "r2": {
   "Name": "Exchange Act",
   "Number": "240",
   "Publisher": "SEC",
   "Section": "12",
   "Subsection": "d1-1",
   "role": "http://www.xbrl.org/2003/role/presentationRef"
  },
  "r3": {
   "Name": "Exchange Act",
   "Number": "240",
   "Publisher": "SEC",
   "Section": "13e",
   "Subsection": "4c",
   "role": "http://www.xbrl.org/2003/role/presentationRef"
  },
  "r4": {
   "Name": "Exchange Act",
   "Number": "240",
   "Publisher": "SEC",
   "Section": "14d",
   "Subsection": "2b",
   "role": "http://www.xbrl.org/2003/role/presentationRef"
  },
  "r5": {
   "Name": "Exchange Act",
   "Number": "240",
   "Publisher": "SEC",
   "Section": "14a",
   "Subsection": "12",
   "role": "http://www.xbrl.org/2003/role/presentationRef"
  },
  "r6": {
   "Name": "Securities Act",
   "Number": "230",
   "Publisher": "SEC",
   "Section": "425",
   "role": "http://www.xbrl.org/2003/role/presentationRef"
  }
 },
 "version": "2.2"
}