8-K
Sprouts Farmers Market, Inc. (SFM)
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) February 24, 2022
Sprouts Farmers Market, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36029 | 32-0331600 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation or organization) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>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 February 24, 2022, 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 2, 2022. 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.
The text of this Current Report on Form 8-K is 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 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<br><br>Number | Description |
|---|---|
| 99.1 | Press release of Sprouts Farmers Market, Inc., dated February 24, 2022, entitled “Sprouts Farmers Market, Inc. Reports Fourth Quarter and Full Year 2021 Results” |
| 99.2 | Sprouts Farmers Market, Inc. Presentation, dated February 24, 2022, entitled “Q4 & Full Year 2021 Earnings” |
| 99.3 | Sprouts Farmers Market, Inc. Presentation, dated February 24, 2022, 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: February 24, 2022 | By: | /s/ Brandon F. Lombardi |
| Name: | Brandon F. Lombardi | |
| Title: | Chief Legal Officer and Corporate Secretary |
EX-99.1
Exhibit 99.1
| 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 2021 Results
PHOENIX, Ariz. – (Globe Newswire) – February 24, 2022 – Sprouts Farmers Market, Inc. (Nasdaq: SFM) today reported results for the 13-week fourth quarter and 52-week year ending January 2, 2022.Period-over-period comparison stated herein reflect 13 and 52 weeks in the fourth quarter and fiscal year 2021 to 14 and 53 weeks in the fourth quarter and fiscal year 2020, respectively, unless otherwise noted(1).
"We are pleased that results for both sales and earnings exceeded our expectations for the quarter and are encouraged by the fact that we experienced quarterly positive comp transactions,” said Jack Sinclair, chief executive officer of Sprouts Farmers Market. "We made progress in 2021 on our strategic roadmap, which sets us up for continued growth and financial success in the years to come. More importantly, I am amazed each and every day by the incredible contribution and dedication of our approximately 31,000 team members, who are committed to providing a broad array of healthy options at great prices for Sprouts' customers."
Fourth Quarter Highlights(2):
• Net sales totaled $1.49 billion; a 7% decrease from the same period in 2020, primarily due to the $122 million in sales during the extra week of the fourth quarter of 2020. Net sales increased 9% from the same period in 2019
• Comparable store sales growth of -1.1% and two-year comparable store sales growth of 2.7%(3)
• Gross margin of 35.7%, a decrease of approximately 100 basis points to the same period in 2020 and an increase of approximately 135 basis points from the same period in 2019
• Selling, general and administrative expenses ("SG&A") totaled $449 million, a decrease of $15 million primarily due to the $29 million of SG&A costs for the extra week in 2020. SG&A increased 15.8% compared to the same period in 2019
• Net income of $36 million; compared to net income of $68 million and adjusted net income(4) of $70 million in the same period in 2020; and compared to net income of $32 million from the same period in 2019
• Diluted earnings per share of $0.32; compared to $0.58 diluted earnings per share and adjusted diluted earnings per share(4) of $0.59 in the same period in 2020; and compared to $0.27 diluted earnings per share from the same period in 2019
Fiscal Year 2021 Highlights(2):
• Net sales of $6.1 billion; a 6% decrease from 2020, primarily due to cycling the demand from the COVID-19 pandemic, as well as the 53rd week in 2020. Net sales increased 8% from the same period 2019
• Comparable store sales growth of -6.7% and two-year comparable store sales growth of 0.4%(3)
• Gross margin of 36.2%, a decrease of approximately 55 basis points compared to the same period in 2020 and an increase of approximately 260 basis points from the same period in 2019
• SG&A totaled $1.75 billion, a decrease of $116 million, reflective of lower COVID-19 pandemic response costs in 2021 and the 53rd week in 2020. SG&A increased 12.8% compared to the same period in 2019
• Net income of $244 million; compared to net income of $287 million and adjusted net income(4) of $294 million in 2020; and compared to net income of $150 million in 2019
• Diluted earnings per share of $2.10; compared to $2.43 diluted earnings per share and adjusted diluted earnings per share(4) of $2.49 in 2020; and compared to $1.25 diluted earnings per share in 2019
• Sprouts opened 12 new stores and relocated one, resulting in 374 stores in 23 states as of January 2, 2022
Leverage and Liquidity in 2021
• Generated cash from operations of $365 million
• Invested $81 million in capital expenditures net of landlord reimbursement, primarily for new stores
• Repurchased 7.4 million shares of common stock for a total investment of $188 million.
• Sprouts ended the year with:
o $250 million balance on its revolving credit facility
o $28 million of letters of credit outstanding under the facility
o $245 million in cash and cash equivalents
o $112 million available under the current share repurchase authorization.
1 2020 included a 14th week in the fourth quarter. This extra week added approximately $122 million to sales, $16 million to EBIT and $0.10 to diluted earnings per share in the fourth quarter of 2020.
2 The Company’s results for the fourth quarter of 2020 and FY 2020 were significantly impacted by the COVID-19 pandemic. Accordingly, this presentation also includes certain comparisons to results in the fourth quarter of 2019 and FY 2019.
3 To account for the 53rd week in fiscal 2020 we shifted each week back one week, thereby ignoring the first week of fiscal 2020 to better align holidays for comparison purposes. More information can be found at investors.sprouts.com under additional reports.
4 Adjusted net income and adjusted diluted earnings per share, non-GAAP financial measures, exclude the impact of certain special items. There were no such adjustments for the quarter or fiscal year ended January 2, 2022 or the quarter ended December 29, 2019. See the “Non-GAAP Financial Measures” section of this release for additional information about these items.
Outlook
The following provides our expected outlook for first quarter and full-year 2022:
| First Quarter and Full Year 2022 Outlook | ||
|---|---|---|
| Q1 2022 | Full-Year 2022 Outlook | |
| Net sales growth | 4.0% to 6.0% | |
| Unit growth | 15 to 20 new stores | |
| Comparable store sales growth | 0.0% to 2.0% | 0.0% to 2.0% |
| Adjusted EBIT | $330M to $345M | |
| Adjusted diluted earnings per share | $0.69 to $0.73 | $2.14 to $2.24 |
| Effective tax rate | Approximately 25% | |
| Capital expenditures | $150M to $170M | |
| (net of landlord reimbursements) |
Fourth Quarter and Full Year 2021 Conference Call
Sprouts will hold a conference call at 3 p.m. Mountain Standard Time (5 p.m. Eastern Standard Time) on Thursday, February 24, 2022, during which Sprouts executives will further discuss fourth quarter and fiscal year 2021 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 15 minutes prior to the start of the webcast.
The audio replay will remain available for 72 hours and can be accessed by dialing 855-859-2056 (toll-free) or 404-537-3406 (international) and entering the confirmation code: 6589237.
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, risks associated with the impact of the COVID-19 pandemic; 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; accounting standard changes; 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
Sprouts is the place where goodness grows. 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 fastest-growing retailers in the country, Sprouts employs approximately 31,000 team members and operates more than 370 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 | Fourteen weeks ended | Fifty-two weeks ended | Fifty-three weeks ended | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| January 2,<br>2022 | January 3,<br>2021 | January 2,<br>2022 | January 3,<br>2021 | |||||||
| Net sales | $ | 1,492,796 | $ | 1,601,834 | $ | 6,099,869 | $ | 6,468,759 | ||
| Cost of sales | 959,568 | 1,013,805 | 3,890,657 | 4,089,470 | ||||||
| Gross profit | 533,228 | 588,029 | 2,209,212 | 2,379,289 | ||||||
| Selling, general and administrative expenses | 448,707 | 463,635 | 1,748,205 | 1,863,869 | ||||||
| Depreciation and amortization (exclusive of depreciation included<br> in cost of sales) | 30,222 | 31,487 | 122,258 | 124,124 | ||||||
| Store closure and other costs, net | 2,916 | (25 | ) | 4,673 | (369 | ) | ||||
| Income from operations | 51,383 | 92,932 | 334,076 | 391,665 | ||||||
| Interest expense, net | 2,844 | 3,106 | 11,684 | 14,787 | ||||||
| Income before income taxes | 48,539 | 89,826 | 322,392 | 376,878 | ||||||
| Income tax provision | 12,311 | 21,429 | 78,235 | 89,428 | ||||||
| Net income | $ | 36,228 | $ | 68,397 | $ | 244,157 | $ | 287,450 | ||
| Net income per share: | ||||||||||
| Basic | $ | 0.32 | $ | 0.58 | $ | 2.12 | $ | 2.44 | ||
| Diluted | $ | 0.32 | $ | 0.58 | $ | 2.10 | $ | 2.43 | ||
| Weighted average shares outstanding: | ||||||||||
| Basic | 112,019 | 117,951 | 115,377 | 117,821 | ||||||
| Diluted | 112,786 | 118,315 | 116,077 | 118,224 |
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| January 3,<br>2021 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 245,287 | $ | 169,697 | ||
| Accounts receivable, net | 21,574 | 14,815 | |||
| Inventories | 265,387 | 254,224 | |||
| Prepaid expenses and other current assets | 35,468 | 27,224 | |||
| Total current assets | 567,716 | 465,960 | |||
| Property and equipment, net of accumulated depreciation | 716,029 | 726,500 | |||
| Operating lease assets, net | 1,072,019 | 1,045,408 | |||
| Intangible assets, net of accumulated amortization | 184,960 | 184,960 | |||
| Goodwill | 368,878 | 368,878 | |||
| Other assets | 13,513 | 14,698 | |||
| Total assets | 2,923,115 | $ | 2,806,404 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | 145,901 | $ | 139,337 | ||
| Accrued liabilities | 155,996 | 143,402 | |||
| Accrued salaries and benefits | 58,743 | 76,695 | |||
| Current portion of operating lease liabilities | 151,755 | 135,739 | |||
| Current portion of finance lease liabilities | 1,078 | 959 | |||
| Total current liabilities | 513,473 | 496,132 | |||
| Long-term operating lease liabilities | 1,095,909 | 1,069,535 | |||
| Long-term debt and finance lease liabilities | 259,656 | 260,459 | |||
| Other long-term liabilities | 36,306 | 40,912 | |||
| Deferred income tax liability | 57,895 | 58,073 | |||
| Total liabilities | 1,963,239 | 1,925,111 | |||
| 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,111,114,374 shares issued and outstanding, January 2, 2022; 117,953,435 shares issued and outstanding, January 3, 2021 | 111 | 118 | |||
| Additional paid-in capital | 704,701 | 686,648 | |||
| Accumulated other comprehensive loss | (3,758 | ) | (8,474 | ) | |
| Retained earnings | 258,822 | 203,001 | |||
| Total stockholders’ equity | 959,876 | 881,293 | |||
| Total liabilities and stockholders’ equity | 2,923,115 | $ | 2,806,404 |
All values are in US Dollars.
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
| Fifty-two<br>weeks ended | Fifty-three<br>weeks ended | |||||
|---|---|---|---|---|---|---|
| January 2,<br>2022 | January 3,<br>2021 | |||||
| Operating activities | ||||||
| Net income | $ | 244,157 | $ | 287,450 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation and amortization expense | 125,541 | 126,507 | ||||
| Operating lease asset amortization | 108,517 | 99,276 | ||||
| Store closure and other costs, net | 4,762 | (321 | ) | |||
| Share-based compensation | 15,883 | 14,339 | ||||
| Deferred income taxes | (178 | ) | 3,717 | |||
| Other non-cash items | 1,167 | 3,683 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | 16,928 | 25,977 | ||||
| Inventories | (11,417 | ) | 21,754 | |||
| Prepaid expenses and other current assets | (5,879 | ) | (14,970 | ) | ||
| Other assets | (1,782 | ) | (5,461 | ) | ||
| Accounts payable | 4,523 | 20,184 | ||||
| Accrued liabilities | 610 | 4,296 | ||||
| Accrued salaries and benefits | (17,951 | ) | 28,116 | |||
| Accrued income tax | — | (2,005 | ) | |||
| Operating lease liabilities | (120,483 | ) | (120,085 | ) | ||
| Other long-term liabilities | 401 | 1,578 | ||||
| Cash flows from operating activities | 364,799 | 494,035 | ||||
| Investing activities | ||||||
| Purchases of property and equipment | (102,378 | ) | (121,968 | ) | ||
| Cash flows used in investing activities | (102,378 | ) | (121,968 | ) | ||
| Financing activities | ||||||
| Payments on revolving credit facilities | — | (288,000 | ) | |||
| Payments on finance lease obligations | (685 | ) | (754 | ) | ||
| Repurchase of common stock | (188,343 | ) | — | |||
| Proceeds from exercise of stock options | 2,170 | 1,343 | ||||
| Cash flows used in financing activities | (186,858 | ) | (287,411 | ) | ||
| Increase in cash, cash equivalents, and restricted cash | 75,563 | 84,656 | ||||
| Cash, cash equivalents, and restricted cash at beginning of the period | 171,441 | 86,785 | ||||
| Cash, cash equivalents, and restricted cash at the end of the period | $ | 247,004 | $ | 171,441 |
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, adjusted EBITDA, adjusted EBIT, adjusted net income and adjusted diluted earnings per share. 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 and adjusted EBITDA as EBITDA excluding the impact of special items. The company defines adjusted EBIT, adjusted net income and adjusted diluted earnings per share by adjusting the applicable GAAP measure to remove 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 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 adjusted EBITDA to net income for the thirteen and fifty-two weeks ended January 2, 2022 and for the fourteen and fifty-three weeks ended January 3, 2021 and a reconciliation of EBIT, net income and diluted earnings per share to adjusted EBIT, adjusted net income and adjusted diluted earnings per share for the thirteen and fifty-two weeks ended January 2, 2022 and for the fourteen and fifty-three weeks ended January 3, 2021:
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NON-GAAP MEASURE RECONCILIATION
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| Thirteen <br>weeks ended | Fourteen <br>weeks ended | Fifty-two<br>weeks ended | Fifty-three<br>weeks ended | |||||
|---|---|---|---|---|---|---|---|---|
| January 2,<br>2022 | January 3,<br>2021 | January 2,<br>2022 | January 3,<br>2021 | |||||
| Net income | $ | 36,228 | $ | 68,397 | $ | 244,157 | $ | 287,450 |
| Income tax provision | 12,311 | 21,429 | 78,235 | 89,428 | ||||
| Interest expense, net | 2,844 | 3,106 | 11,684 | 14,787 | ||||
| Earnings before interest and taxes (EBIT) | 51,383 | 92,932 | 334,076 | 391,665 | ||||
| Special Items: | ||||||||
| Strategic initiatives (1) | — | 1,802 | — | 8,835 | ||||
| Adjusted EBIT | 51,383 | 94,734 | 334,076 | 400,500 | ||||
| Depreciation, amortization and accretion | 31,119 | 32,080 | 125,541 | 126,508 | ||||
| Adjusted EBITDA | $ | 82,502 | $ | 126,814 | $ | 459,617 | $ | 527,008 |
| Net income | 36,228 | 68,397 | 244,157 | 287,450 | ||||
| Special Items: | ||||||||
| Strategic initiatives, net of tax (1) | — | 1,339 | — | 6,565 | ||||
| Adjusted Net income | $ | 36,228 | $ | 69,736 | $ | 244,157 | $ | 294,015 |
| Diluted earnings per share | $ | 0.32 | $ | 0.58 | $ | 2.10 | $ | 2.43 |
| Adjusted diluted earnings per share | $ | 0.32 | $ | 0.59 | $ | 2.10 | $ | 2.49 |
| Diluted weighted average shares outstanding | 112,786 | 118,315 | 116,077 | 118,224 |
(1) Includes professional fees related to strategic initiatives. After-tax impact includes the tax benefit on the pre-tax charge.
Source: Sprouts Farmers Market, Inc
Phoenix, AZ
2/24/22
Q4 & Full Year 2021 Earnings February 2022 Exhibit 99.2
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, risks associated with the COVID-19 pandemic; 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; 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.
Jack Sinclair CEO
2021 Was a Year of Meaningful Accomplishments Opened 2 new fresh Distribution Centers Opened 12 new stores & one relocation Launched 4 new format stores, including one remodel Launched over 5,700 new products Greatly improved our ESG reporting, resulting in AAA rating from MSCI Encouraged that 4th quarter traffic was positive EPS up 68% over 2019 baseline
Chip Molloy CFO
6 NET SALES $6.1B + 8% vs 2019 NET CASH PROVIDED by OPERATIONS $365M + 3% vs 2019 ADJUSTED DILUTED Earnings Per Share $2.10 + 68% vs 2019 ($ in mm) ($ in mm) (1) (3) (3) (3) See the Appendix to this presentation for a reconciliation of adjusted diluted EPS to net income The Company’s results for FY2020 were significantly impacted by the Covid-19 pandemic. Accordingly, this presentation also includes comparisons to result in FY 2019 2020 is presented on a 53-week basis Sprouts is on a Stronger Foundation with Strategic Initiatives Beginning to Take Hold in 2021 (2) (2) (2)
Ecommerce Remains Here to Stay and Sales are Settling at New Levels Ecommerce Penetration > 50% of online orders can be identified to a customer In store Pick-up & Delivery available to all customers in all stores & markets
Maintained a Structurally Improved Margin Profile 8 ($ in mm) ADJUSTED EBIT & Adjusted EBIT Margin(1) See the Appendix to this presentation for a reconciliation of EBIT to adjusted EBIT 2020 is presented on a 53-week basis (2)
In 2021 we repurchased 7.4 million shares for a total investment of $188M $112M remaining on our share repurchase authorization* $0 ($ in mm) Total Annual Share Repurchases * As of January 2, 2022 In Addition to Investing in Growth, We Drive Shareholder Value Through an Ongoing Share Repurchase Program
2022 Annual Outlook 10 Net sales growth 4% to 6% 15-20 new stores Comps of 0% to 2% Adjusted EBIT $330M to $345M Adjusted EPS $2.14 to $2.24 Capex $150M to $170M Approximately 25% Corporate Tax Rate
2022 First Quarter Outlook 11 Adjusted EPS $0.69 to $0.73 Comps 0% to 2%
Jack Sinclair CEO
Fourth Quarter Sales Highlights Released new deli meals created by our in-house chef as well as other attribute focused items Bakery continues to see year over year growth supported by seasonal events and innovation Vitamins benefited from immunity boosting products Grocery benefited from a strong holiday program, innovation and the 250 bulk tables we have converted to innovation displays
Successfully Launched 2 Additional New Format Stores in Q4 with Similar Results EARLY DAYS… 2 more New Format stores FL (1) and GA (1) - 4 in total for 2021 Phoenix relocation – sales up significantly despite new store being 23% smaller Frozen sales up dramatically Protein sales above company average with the emphasis on center of plate in the front of the store Deli sales above company average with more grab and go items Total of 4 New Format stores for 2021
Growing our Customer Engagement Currently “speaking” to more than 5 million customers via multiple digital platforms +26% + 76% +36% (1) Growth rate is 2021 vs. 2020 (1) (1) (1)
Appendix
SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES NON-GAAP MEASURE RECONCILIATION (UNAUDITED) (IN THOUSANDS) Appendix The following table shows a reconciliation of EBITDA and adjusted EBITDA 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 January 2, 2022, January 3, 2021 (53 weeks), December 29, 2019, and December 30, 2018:
Appendix Income tax provision includes approximately $12 million (or $0.10 per diluted share) benefit during the fifty-two weeks ended December 30, 2018 in excess federal and state tax benefits for share based compensation primarily associated with the exercise of expiring pre-IPO options. Includes professional fees related to strategic initiatives. After-tax impact includes the tax benefit on the pre-tax charge. During the fifty-two weeks ended December 30, 2018, the Company recorded one-time pretax compensation charges of $4 million, associated with the resignation of the former CEO. The after-tax impact includes incremental tax expense associated with certain nondeductible executive compensation costs. Includes the direct costs associated with store closures and relocation. During the fifty-two weeks ended December 30, 2018, in connection with the closure of two stores, the Company recorded one-time non-cash pre-tax charges of $8 million primarily related to the estimated fair value of the lease termination obligations and asset impairments. After-tax impact includes the tax benefit on the pre-tax charge. During the fifty-two weeks ended December 30, 2018, the Company adopted a tax calculation method change for the accelerated deduction of certain items, resulting in a discrete tax benefit of $3 million.
INVESTOR DECK February 2022 Exhibit 99.3
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, risks associated with the COVID-19 pandemic; 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; 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.
A farmers market experience – open layout of fresh produce at the heart of the store, community feel, treasure hunt for unique products Intentional curation of responsibly and locally sourced products A place with happy, helpful team members Culture (care, own it, be different) The right assortment of healthy alternatives and good-for-you options Making the highest quality fresh foods accessible to all WHAT DEFINES SPROUTS AND WHAT MAKES US DIFFERENT
Targeted 10%+ annual unit growth beyond 2022 and incredible white space Strong and improving unit economics Sustainable robust cash flows with shareholder friendly capital allocation Building an advantaged fresh supply chain Unique farmers market experience Innovative & differentiated products with lifestyle friendly ingredients WHY INVEST IN SPROUTS? A POWERFUL GROWTH BUSINESS
ESG Activities are Improving our Bottom Line and the Planet! Transitioned 100% of pork supply to be sourced from suppliers that utilize open-pen or group-housed facilities Safe, Healthy Food and Responsible Sourcing Environment & Climate overall landfill diversion rate by repurposing and recycling nearly 78,000 tons of food and waste 58% Reduced Scope 1 emissions 16% driven by reduction in fugitive refrigeration emissions. Achieved Scope 2 emissions slightly below unit growth rate. Reduced Scope 3 waste-related emissions by sending less waste to landfills. 68% of food waste recovered, and donated equivalent to 23 million meals Committed to sustainable palm oil in Sprouts Brand products by 2022 22% sales increase of products that promote health and nutrition 20% sales increase of products with a sustainable attribute, representing nearly $3.5 billion or more than 50% in sales 100% of Sprouts Brand eggs are now cage free 23% of total sales are from organically grown products 2020 Highlights
We Put Customers, Team Members, and Local Communities First! Awarded $1.6 million in grants and donations to programs supporting youth nutrition education and academic support, and food system equity Supported an estimated 350,000 students with nutrition programs, taught virtually, during school closures Community Engagement Team Members 87% of Sprouts’ board members were independent 25% of Sprouts’ board members are female and 13% were ethnically diverse Corporate Governance 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. 7,200 promotions! Paid $100+ million in team member bonuses and covered 100% of the costs for testing Paying up to 4 hours of paid sick time off to receive the vaccine COVID-19 Response 55% were female 49% were ethnically diverse Filled 72% of store manager positions with internal candidates Team members received 475,000 hours of in-store training $17.42/hour average store team member pay Workforce Diversity: 48% ethnically diverse and 51% female 2020 Highlights
Sprouts’ Five Pillar 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 CONNECTING WITH TARGET CUSTOMERS ROBUST OMNICHANNEL EXPERIENCE PRODUCTS STEEPED IN INNOVATION SMALLER STORES HIGHER RETURNS FOCUSED ON BUILDING SCALE FRESHER PRODUCTS AND INCREASED LOCAL OFFERING Starting in 2023 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)
WE EXIST FOR THE HEALTH ENTHUSIASTS WE EXIST FOR THE EXPERIENCE SEEKERS What brings them together is simple: They’re into their food – like, really into it. Cover a wide range of income Age demographics - Gen Z to Baby Boomers Healthy and organic options, better for you, quality products Innovative and differentiated products Great store experience They are engaged and connected to the what they eat – how it makes them feel, where it comes from, the role it can play in their lives. Focusing on Sprouts’ Target Customers
Continue to Expand Customer Engagement 10 Currently “speaking” to more than 5M customers via multiple digital platforms +26% + 76% +36% (1) Growth rate is 2021 vs. 2020 (1) (1) (1)
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 2021 +53 +22 +27 NPS +52 +54 +35 +66 +43 +46 +69 +48 +44 +80 +66
Pivoting Our Marketing Strategy to Drive More Profitable Growth with a Broader Reach OUR DIGITAL-FIRST MARKETING PLATFORM IS FOCUSED ON CONNECTING WITH OUR MOST IMPORTANT CUSTOMERS Target Audience: Connect with Health Enthusiasts and Experience Seekers Geo-Targeting: Align media investments with our most valuable trading zone zip codes Continuous Optimization: Improve customer connections in real-time across all their screens Personal Relevance: Employ data-driven comms addressing target audience’s needs and affinities HIGHER VALUE CUSTOMERS TAPPING INTO CONSUMER NEEDS PRECISION TARGETING DATA-DRIVEN MEDIA Layered with Mass Media Calls-to-Action and Seasonal “Story Telling” Mailers to Drive more Immediate Transactions
Ecommerce Remains Here to Stay and Sales Appear to be Settling at New Levels 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
Produce Remains the Heart of the Store and Priced Well 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 which deliver new varietals and favorable pricing to our customers through spot buys New distribution channels will allow for increased local buying and deliver fresher products to our customers Building a path forward to grow with farmers as we grow
15 Sprouts’ Stores are Filled with a Curation of Differentiated Good-For-You Products 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
16 Sprouts Aims To Grow and Establish a Differentiated Private Label Private Label Sales Penetration
17 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 New store size to decrease from 30K To 23K square feet
18 Small Store Benefits Reduce Operating Cost Lower Cost to Build Reduce Non-Selling Space Decrease Occupancy Cost Sales to Remain Flat Strong Returns & Ability to Accelerate Growth
High Growth Retailer – Annual Unit Growth Target of 10% or More Beyond 2022 Unit growth (1) 300-400 New Stores in Expansion Markets 2019, 2020, 2021 actual unit growth, 2022 outlook, 2023 and beyond represent a 10% unit growth subject to equipment delays Expansion Markets Existing DCs Future DCs Existing Markets
20 Creating an Advantaged Fresh Supply Chain within 250 Miles of the Majority of Stores DCs Focused on Fresh, Local and Organic Offerings Meet our Local Farmer Partners
21 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 (2) 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.” Starting in 2023
22 New Store Four Wall Box Target Economics Sales EBITDA Margins 20% to 25% sales growth in 4 years $16M - $18M annual Sales per Box in year 4 Blended 8% EBITDA Margins in year 4 Cash on Cash Return ~40% by year 4, continues to grow in year 5 Cash Investment $3.2M average new store build including CapEx, Inventory and Pre-opening expenses
23 Low Single Digit Comps Target Key Comp Drivers Low Single Digit Comps Brand and marketing Innovative, differentiated products Omnichannel offering Better new store ramp with smarter promotional approach
24 Stable to Expanding EBIT Margins Stable to Expanding EBIT Margins All Stores New Stores Smarter Promotions Improved Buying Supply Chain Optimization Labor Productivity Improving Shrink Headwinds from Labor & Benefit Costs Reduction in Cost to Build (Improved DA) Lower Rents driven by Smaller Boxes Less Efficient Operations during Maturity ramp-up
25 NET SALES $6.1B + 8% vs 2019 NET CASH PROVIDED by OPERATIONS $365M + 3% vs 2019 ADJUSTED DILUTED Earnings Per Share $2.10 + 68% vs 2019 ($ in mm) ($ in mm) (1) (3) (3) (3) See the Appendix to this presentation for a reconciliation of adjusted diluted EPS to net income The Company’s results for FY2020 were significantly impacted by the Covid-19 pandemic. Accordingly, this presentation also includes comparisons to result in FY 2019 2020 is presented on a 53-week basis Sprouts is on a Stronger Foundation with Strategic Initiatives Beginning to Take Hold in 2021 (2) (2) (2)
Gross Margin Has Increased and Structurally Changed Since 2019 Gross Margin Driven By: Promotional strategy changes Differentiated products Operational improvements Addition of two new distribution centers in FL & CO Annual Gross Margin %
Maintained a Structurally Improved Margin Profile 27 ($ in mm) ADJUSTED EBIT & Adjusted EBIT Margin(1) See the Appendix to this presentation for a reconciliation of EBIT to adjusted EBIT 2020 is presented on a 53-week basis (2)
In-line with Strategic Goals…Improving ROIC 28 ROIC (1) ROIC is a non-GAAP measure that we define 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)
Capital Expense Driven by New Stores Capex Spend as % of Sales 3.0% 1.5% ~2.5% to 3.5% 2.8% Capital Expenditures is net of landlord reimbursement 2022 and beyond are estimates 1.3% 2.4%
From 2015 through 2021: Repurchased 51 million shares Reduced shares outstanding 33% Purchased $1.1B to date $112M remaining on our share repurchase authorization* $0 Total Annual Share Repurchase * As of January 2, 2022 In Addition To Investing In Growth, We Drive Shareholder Value Through An Ongoing Share Repurchase Program
DELIGHT IN THE GOODNESS OF FRESH, HEALTHY FOODS… Sprouts delivers a unique farmers market experience that brings together passionate, knowledgeable team members and the best assortment of high-quality food that is good for us, and good for the world.
APPENDIX
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 Fresh Merchandising Officer since 2020 Dan Sanders Chief Operations Officer since 2016 Gil Phipps Senior VP, Chief Marketing Officer since 2020 Dave McGlinchey Chief Format Officer since 2020 (joined SFM in 2017) Brandon Lombardi Chief Legal Officer since 2012 Kim Coffin Senior VP, Non- Perishable since 2020 (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)
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, 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 January 2, 2022, January 3, 2021 (53 weeks), December 29, 2019, and December 30, 2018: Appendix
Appendix Income tax provision includes approximately $12 million (or $0.10 per diluted share) benefit during the fifty-two weeks ended December 30, 2018 in excess federal and state tax benefits for share based compensation primarily associated with the exercise of expiring pre-IPO options. Includes professional fees related to strategic initiatives. After-tax impact includes the tax benefit on the pre-tax charge. During the fifty-two weeks ended December 30, 2018, the Company recorded one-time pretax compensation charges of $4 million, associated with the resignation of the former CEO. The after-tax impact includes incremental tax expense associated with certain nondeductible executive compensation costs. Includes the direct costs associated with store closures and relocation. During the fifty-two weeks ended December 30, 2018, in connection with the closure of two stores, the Company recorded one-time non-cash pre-tax charges of $8 million primarily related to the estimated fair value of the lease termination obligations and asset impairments. After-tax impact includes the tax benefit on the pre-tax charge. During the fifty-two weeks ended December 30, 2018, the Company adopted a tax calculation method change for the accelerated deduction of certain items, resulting in a discrete tax benefit of $3 million.
Appendix The following table shows a reconciliation of ROIC to net income for the Company’s 2018, 2019 , 2020 and 2021 fiscal years. SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES NON-GAAP MEASURE RECONCILIATION (UNAUDITED) (IN THOUSANDS)