Sprouts Farmers Market, Inc. (SFM) Bundle
A Brief History of Sprouts Farmers Market
Company Overview
Founded in 2002, Sprouts Farmers Market, Inc. operates as a grocery retailer, specializing in fresh, natural, and organic foods. As of 2024, the company has expanded its footprint significantly, with a focus on providing high-quality products at competitive prices.
Financial Performance
For the thirty-nine weeks ended September 29, 2024, Sprouts reported:
| Financial Metric | 2024 Amount (in thousands) | 2023 Amount (in thousands) | % Change |
|---|---|---|---|
| Net Sales | $5,723,062 | $5,138,839 | 11% |
| Cost of Sales | $3,541,461 | $3,237,371 | 9% |
| Gross Profit | $2,181,601 | $1,901,468 | 15% |
| Net Income | $300,999 | $208,807 | 44% |
| Diluted Earnings Per Share | $2.97 | $2.01 | 48% |
Operational Highlights
Sprouts' comparable store sales growth for the thirty-nine weeks ended September 29, 2024, was reported at 6.4%, compared to 3.4% in the previous year. The company opened 21 new stores during this period, bringing the total number of stores to 428.
Cash Flow and Capital Expenditures
During the thirty-nine weeks ended September 29, 2024, Sprouts generated:
| Cash Flow Activity | 2024 Amount (in thousands) | 2023 Amount (in thousands) |
|---|---|---|
| Cash Flows from Operating Activities | $520,351 | $409,025 |
| Cash Flows Used in Investing Activities | $(161,687) | $(178,048) |
| Cash Flows Used in Financing Activities | $(250,809) | $(272,320) |
Share Repurchase Program
As of September 29, 2024, Sprouts had a new share repurchase program authorized for $600 million, with $559.4 million available for future repurchases. The company repurchased 1,861,453 shares during the thirty-nine weeks ended September 29, 2024, at an average price of $70.22 per share, totaling $130.7 million.
Long-Term Debt and Financial Obligations
As of September 29, 2024, Sprouts reported no long-term debt, a significant reduction from $125 million as of December 31, 2023. This marks a strategic shift towards a debt-free structure, enhancing financial flexibility.
Market Position and Strategy
Sprouts continues to focus on expanding its market presence through new store openings and enhancing its product offerings. The company aims to leverage its strong brand recognition and customer loyalty to drive future growth.
Recent Acquisitions
In 2023, Sprouts completed the acquisition of Ronald Cohn, Inc., which included two stores in California, for a total consideration of approximately $31.1 million, including both cash and stock.
A Who Owns Sprouts Farmers Market, Inc. (SFM)
Major Shareholders
As of 2024, the ownership of Sprouts Farmers Market, Inc. (SFM) is comprised of various institutional and individual shareholders. The largest institutional shareholders include:
| Institution | Shares Owned | Percentage of Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 10,345,000 | 10.2% |
| BlackRock, Inc. | 9,760,000 | 9.6% |
| State Street Corporation | 7,200,000 | 7.1% |
| Wellington Management Group LLP | 5,800,000 | 5.7% |
| Invesco Ltd. | 4,500,000 | 4.4% |
Executive Ownership
Key executives of Sprouts Farmers Market also hold significant shares in the company:
| Name | Position | Shares Owned | Percentage of Ownership |
|---|---|---|---|
| Jack Sinclair | CEO | 200,000 | 0.2% |
| Timmi Zalatoris | Chief Human Resources Officer | 50,000 | 0.05% |
| Other Executives | Various | 350,000 | 0.35% |
Shareholder Composition
The shareholder composition of Sprouts Farmers Market as of September 29, 2024, indicates a mix of institutional and retail ownership:
| Type of Shareholder | Percentage of Total Shares |
|---|---|
| Institutional Investors | 70% |
| Retail Investors | 30% |
Recent Share Repurchase Activity
Sprouts Farmers Market has engaged in share repurchase activities, reflecting a commitment to returning value to shareholders:
| Period | Total Shares Repurchased | Average Price per Share | Total Cost (in millions) |
|---|---|---|---|
| Q3 2024 | 264,135 | $96.60 | $25.5 |
| 2024 YTD | 1,861,453 | $70.22 | $130.7 |
Stock Performance
As of September 29, 2024, Sprouts Farmers Market's stock performance has shown significant growth compared to previous years:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Stock Price (End of Q3) | $102.88 | $38.89 | +164.4% |
| Market Capitalization | $10.3 billion | $4.2 billion | +145.2% |
Conclusion of Ownership Structure
In summary, Sprouts Farmers Market is primarily owned by institutional investors, with significant executive ownership. The company's active share repurchase program and strong stock performance further highlight its commitment to enhancing shareholder value.
Sprouts Farmers Market, Inc. (SFM) Mission Statement
Sprouts Farmers Market, Inc. (SFM) articulates its mission as providing customers with healthy, fresh, and affordable food options. The company emphasizes a commitment to sustainability, community engagement, and the promotion of healthy lifestyles. As of 2024, Sprouts aims to create an open and inviting shopping experience centered around fresh produce and natural foods.
Financial Overview
For the thirty-nine weeks ended September 29, 2024, Sprouts reported:
- Net Sales: $5,723,062,000
- Cost of Sales: $3,541,461,000
- Gross Profit: $2,181,601,000
- Gross Margin: 38.1%
- Selling, General and Administrative Expenses: $1,676,470,000
- Net Income: $300,999,000
- Diluted Earnings Per Share: $2.97
| Metric | Amount ($000) |
|---|---|
| Net Sales | 5,723,062 |
| Cost of Sales | 3,541,461 |
| Gross Profit | 2,181,601 |
| Gross Margin | 38.1% |
| Selling, General and Administrative Expenses | 1,676,470 |
| Net Income | 300,999 |
| Diluted Earnings Per Share | 2.97 |
Store Operations
As of September 29, 2024, Sprouts operates a total of 428 stores across 23 states. The company continues to focus on increasing its footprint by opening new stores, contributing to its sales growth.
- Stores at Beginning of Period: 407
- Stores Opened: 21
- Stores Closed: 0
- Stores at End of Period: 428
| Store Metrics | Count |
|---|---|
| Stores at Beginning of Period | 407 |
| Stores Opened | 21 |
| Stores Closed | 0 |
| Stores at End of Period | 428 |
Sales Performance
Sprouts has demonstrated robust sales growth, with a significant increase in comparable store sales.
- Comparable Store Sales Growth: 6.4%
- Net Sales for Thirteen Weeks Ended September 29, 2024: $1,945,735,000
- Net Sales for Thirteen Weeks Ended October 1, 2023: $1,713,282,000
| Period | Net Sales ($000) |
|---|---|
| Thirteen Weeks Ended September 29, 2024 | 1,945,735 |
| Thirteen Weeks Ended October 1, 2023 | 1,713,282 |
Community Commitment
Sprouts Farmers Market is dedicated to fostering community well-being through various initiatives, including partnerships with local organizations and sustainable sourcing of products. The company promotes a health-focused lifestyle, aligning with its mission statement.
Recent Developments
In May 2024, Sprouts authorized a new $600 million share repurchase program, replacing the previous authorization. This move reflects the company’s strong financial position and commitment to returning value to shareholders.
| Authorization Details | Amount ($000) |
|---|---|
| New Share Repurchase Program | 600,000 |
| Previous Authorization Remaining | 119,300 |
| Cost of Repurchases (as of September 29, 2024) | 40,602 |
How Sprouts Farmers Market, Inc. (SFM) Works
Business Model
Sprouts Farmers Market, Inc. (SFM) operates as a specialty grocery retailer focused on fresh, natural, and organic products. The company emphasizes a farm-to-table approach, offering a variety of products including fresh produce, bulk foods, vitamins, and supplements. As of September 29, 2024, Sprouts operates 428 stores across 23 states.
Financial Performance
For the thirty-nine weeks ended September 29, 2024, Sprouts reported:
| Financial Metric | 2024 | 2023 | Change ($) | % Change |
|---|---|---|---|---|
| Net Sales | $5,723,062,000 | $5,138,839,000 | $584,223,000 | 11% |
| Cost of Sales | $3,541,461,000 | $3,237,371,000 | $304,090,000 | 9% |
| Gross Profit | $2,181,601,000 | $1,901,468,000 | $280,133,000 | 15% |
| Net Income | $300,999,000 | $208,807,000 | $92,192,000 | 44% |
| Diluted Earnings per Share | $2.97 | $2.01 | $0.96 | 48% |
Comparable Store Sales Growth
Sprouts experienced a comparable store sales growth of 6.4% for the thirty-nine weeks ending September 29, 2024, compared to 3.4% for the same period in 2023.
Operating Expenses
During the same period, the company reported selling, general and administrative expenses of:
| Expense Type | 2024 | 2023 | Change ($) | % Change |
|---|---|---|---|---|
| Selling, General and Administrative Expenses | $1,676,470,000 | $1,486,961,000 | $189,509,000 | 13% |
| Depreciation and Amortization | $98,129,000 | $99,834,000 | ($1,705,000) | (2%) |
| Store Closure and Other Costs | $8,968,000 | $33,880,000 | ($24,912,000) | (74%) |
Liquidity and Capital Resources
As of September 29, 2024, Sprouts reported cash, cash equivalents, and restricted cash of $311,725,000, an increase from $253,849,000 in the previous year. Cash flows from operating activities increased to $520,351,000 from $409,025,000.
Share Repurchase Program
On May 22, 2024, the board of directors authorized a new $600 million share repurchase program. As of September 29, 2024, the following table summarizes the share repurchase activity:
| Effective Date | Expiration Date | Amount Authorized | Cost of Repurchases | Authorization Available |
|---|---|---|---|---|
| March 2, 2022 | December 31, 2024 | $600,000,000 | $480,715,000 | $0 |
| May 22, 2024 | May 22, 2027 | $600,000,000 | $40,602,000 | $559,398,000 |
Debt and Financing
As of September 29, 2024, Sprouts had no long-term debt outstanding, a significant reduction from $125 million as of December 31, 2023.
Return on Invested Capital (ROIC)
The ROIC for the trailing four quarters ended September 29, 2024, was 14.2%, compared to 12.9% in the previous year, indicating improved efficiency in generating returns from invested capital.
Store Growth
As of September 29, 2024, Sprouts opened 21 new stores, bringing the total number of stores to 428, compared to 401 stores at the end of the previous year.
Effective Tax Rate
The effective tax rate for the thirty-nine weeks ended September 29, 2024, was 24.5%, an increase from 24% in the previous year.
How Sprouts Farmers Market, Inc. (SFM) Makes Money
Revenue Generation
Sprouts Farmers Market, Inc. generates revenue primarily through the sale of grocery products, focusing on fresh, natural, and organic foods. In the thirty-nine weeks ended September 29, 2024, net sales totaled $5.72 billion, representing an increase of 11% compared to $5.14 billion for the same period in the prior year.
Product Categories
The company categorizes its products into perishable and non-perishable items. The breakdown is as follows:
- Perishable products: Produce, meat and meat alternatives, seafood, deli, bakery, floral, and dairy.
- Non-perishable products: Grocery, vitamins and supplements, bulk items, frozen foods, beer and wine, and natural health and body care.
Comparable Store Sales Growth
Sprouts reported a comparable store sales growth of 6.4% for the thirty-nine weeks ended September 29, 2024, compared to 3.4% for the same period in the prior year.
Gross Profit and Margin
Gross profit for the thirty-nine weeks ended September 29, 2024, was $2.18 billion, which is an increase of 15% from $1.90 billion in the previous year. The gross margin improved to 38.1% from 37.0%.
Operating Expenses
Selling, general and administrative expenses totaled $1.68 billion for the thirty-nine weeks ended September 29, 2024, an increase of 13% compared to $1.49 billion in the prior year. This increase was primarily due to the expansion of new stores and higher incentive compensation costs.
Net Income and Earnings Per Share
Net income for the thirty-nine weeks ended September 29, 2024, reached $301 million, a significant increase of 44% from $209 million in the previous year. The diluted earnings per share were $2.97, up from $2.01.
Store Expansion
As of September 29, 2024, Sprouts operated 428 stores, up from 401 stores a year earlier. During this period, they opened 21 new stores.
Cash Flow and Liquidity
Cash flows from operating activities were $520 million for the thirty-nine weeks ended September 29, 2024, compared to $409 million in the prior year. Cash, cash equivalents, and restricted cash at the end of the period totaled $312 million, up from $254 million a year earlier.
| Financial Metric | 2024 (39 weeks) | 2023 (39 weeks) | Change |
|---|---|---|---|
| Net Sales | $5.72 billion | $5.14 billion | $584.2 million (11%) |
| Gross Profit | $2.18 billion | $1.90 billion | $280.1 million (15%) |
| Net Income | $301 million | $209 million | $92.2 million (44%) |
| Diluted EPS | $2.97 | $2.01 | $0.96 (48%) |
| Stores Operated | 428 | 401 | 27 (6.7%) |
| Cash Flow from Operations | $520 million | $409 million | $111 million (27%) |
| Cash at End of Period | $312 million | $254 million | $58 million (23%) |
Interest Expense and Tax Provision
For the thirty-nine weeks ended September 29, 2024, net interest expense decreased to $382,000, down from $6.06 million in the previous year. The effective tax rate for the same period was 24.5%, compared to 24.0% in 2023.
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Article updated on 8 Nov 2024
Resources:
- Sprouts Farmers Market, Inc. (SFM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Sprouts Farmers Market, Inc. (SFM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Sprouts Farmers Market, Inc. (SFM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.