Sprouts Farmers Market, Inc. Reports Fourth Quarter and Full Year 2019 Results

Nachrichtenquelle: globenewswire
20.02.2020, 22:01  |  125   |   |   

PHOENIX, Ariz., Feb. 20, 2020 (GLOBE NEWSWIRE) -- Sprouts Farmers Market, Inc. (Nasdaq: SFM) today reported results for the 13-week fourth quarter and 52-week year ended December 29, 2019. 

Fourth Quarter Highlights:

  • Net sales of $1.4 billion; an 8% increase from the same period in 2018
  • Comparable store sales growth of 1.5% and two-year comparable store sales growth of 3.8%
  • Net income of $32 million; compared to net income of $13 million and adjusted net income of $24 million from the same period in 2018
  • Diluted earnings per share of $0.27; compared to diluted earnings per share of $0.10 and adjusted diluted earnings per share of $0.19 from the same period in 2018

Fiscal Year 2019 Highlights:

  • Net sales of $5.6 billion; an 8% increase from 2018
  • Comparable store sales growth of 1.1% and two-year comparable store sales growth of 3.2%
  • Net income and adjusted net income of $150 million; compared to net income of $159 million and adjusted net income of $168 million in 2018
  • Diluted earnings and adjusted diluted earnings per share of $1.25; compared to diluted earnings per share of $1.22 and adjusted diluted earnings per share of $1.29 in 2018

“During the fourth quarter, I was encouraged by the Sprouts team’s dedication to driving same store sales growth, while we simultaneously delivered positive margins,” said Jack Sinclair, chief executive officer of Sprouts Farmers Market.   “We remain engaged in developing a long-term strategy and are optimistic about the future of Sprouts rooted in a brand that is good for you, good for your family and good for the planet.”

2020 First Quarter and Full Year Outlook

The following provides information on our outlook for 2020, which does not factor in any strategic changes. In addition, the Company notes the fiscal year 2020 will be a 53-week year, with the extra week falling in the fourth quarter.  We estimate the impact from the 53rd week to be approximately $120 million in sales, $9 million in income before income taxes, and $0.06 in diluted earnings per share:

        Full year 2020 Outlook  
    Q1 2020 Outlook   (52-Week)  
Net sales growth   5.5% to 6.5%   5.5% to 6.5%  
Comparable store sales growth   0% to 1%   0% to 1%  
Unit growth       Approximately 20  
Diluted earnings per share   $0.45 to $0.47   $1.17 to $1.23  
Earnings before taxes ("EBT") Growth       $187M to $197M  
Effective tax rate       Approximately 26%  
Capital expenditures (net of landlord reimbursements)       $120M to $130M  

Fourth Quarter and Full Year 2019 Conference Call

We will hold a conference call at 3 p.m. Mountain Standard Time (5 p.m. Eastern Standard Time) on Thursday, February 20, 2020 during which Sprouts executives will further discuss our fourth quarter and fiscal year 2019 financial results.

A webcast of the conference call will be available through Sprouts’ investor webpage located at investors.sprouts.com. Participants should register on the website approximately 10 minutes prior to the start of the webcast.

The conference call will be available via the following dial-in numbers:

  • U.S. Participants: 877-398-9481
  • International Participants: +1-408-337-0130
  • Conference ID: 9977410

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:  9977410.

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 guidance, outlook, 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 release. These risks and uncertainties include, without limitation, risks associated with the company’s ability to successfully compete in its intensely 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; 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. 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

About Sprouts Farmers Market
Sprouts Farmers Market, Inc., one of the fastest-growing retailers in the country, has made healthy living accessible to shoppers for nearly two decades by offering affordable, fresh, natural and organic products. True to its farmers market heritage, Sprouts is known for pioneering its unique grocery model by offering a welcoming store layout featuring fresh produce at the center of the store, an expansive bulk foods section, and a vitamin department focused on overall wellness. Sprouts also offers a unique assortment of healthier products with special attributes, such as plant-based, gluten-free, keto-friendly, and grass-fed, to meet the growing and diverse needs of today’s consumer. Headquartered in Phoenix, Ariz., Sprouts employs more than 30,000 team members and operates over 340 stores in 22 states from coast to coast. Visit about.sprouts.com for more information.


SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                 
    Thirteen weeks ended   Fifty-two weeks ended
    December 29,
2019
  December 30,
2018
  December 29,
2019
  December 30,
2018
Net sales   $ 1,364,991   $ 1,269,338   $ 5,634,835   $ 5,207,336
Cost of sales     896,028     848,369     3,740,017     3,459,861
Gross profit     468,963     420,969     1,894,818     1,747,475
Selling, general and administrative expenses     387,481     352,672     1,549,707     1,404,443
Depreciation and amortization (exclusive of depreciation included in cost of sales)     30,703     27,966     120,491     108,045
Store closure and other costs     3,864     11,579     7,260     12,076
Income from operations     46,915     28,752     217,360     222,911
Interest expense, net     5,195     7,420     21,192     27,435
Other income                 320
Income before income taxes     41,720     21,332     196,168     195,796
Income tax provision     10,086     8,629     46,539     37,260
Net income   $ 31,634   $ 12,703   $ 149,629   $ 158,536
Net income per share:                
Basic   $ 0.27   $ 0.10   $ 1.25   $ 1.23
Diluted   $ 0.27   $ 0.10   $ 1.25   $ 1.22
Weighted average shares outstanding:                
Basic     117,934     126,574     119,368     128,827
Diluted     118,219     127,398     119,742     129,776
                 

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

         
    December 29,
2019
  December 30,
2018
ASSETS        
Current assets:        
Cash and cash equivalents   $ 85,314     $ 1,588  
Accounts receivable, net     15,713       40,564  
Inventories     275,979       264,366  
Prepaid expenses and other current assets     10,833       27,323  
Total current assets     387,839       333,841  
Property and equipment, net of accumulated depreciation     741,508       766,429  
Operating lease assets     1,028,436        
Intangible assets, net of accumulated amortization     185,395       194,803  
Goodwill     368,078       368,078  
Other assets     11,727       12,463  
Total assets   $ 2,722,983     $ 1,675,614  
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Accounts payable   $ 261,326     $ 253,969  
Accrued salaries and benefits     48,579       48,603  
Current portion of capital and financing lease obligations           7,428  
Current portion of operating lease liabilities     106,153        
Current portion of finance lease liabilities     754        
Total current liabilities     416,812       310,000  
Long-term capital and financing lease obligations           119,642  
Long-term operating lease liabilities     1,078,927        
Long-term debt and finance lease liabilities     549,419       453,000  
Other long-term liabilities     41,517       153,377  
Deferred income tax liability     54,356       50,399  
Total liabilities     2,141,031       1,086,418  
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, 117,543,668 shares issued and outstanding, December
29, 2019; 124,975,691 shares issued and outstanding, December 30, 2018
    117       124  
Additional paid-in capital     670,966       657,140  
Accumulated other comprehensive (loss) income     (4,682 )     1,134  
Accumulated deficit     (84,449 )     (69,202 )
Total stockholders' equity     581,952       589,196  
Total liabilities and stockholders' equity   $ 2,722,983     $ 1,675,614  
         

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (IN THOUSANDS)

         
    Fifty-two weeks ended
    December 29, 2019   December 30, 2018
Cash flows from operating activities        
Net income   $ 149,629     $ 158,536  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization expense     122,804       110,749  
Operating lease asset amortization     81,842        
Store closure and other costs     4,113       4,115  
Share-based compensation     8,949       14,512  
Deferred income taxes     (216 )     23,333  
Other non-cash items     4,136       1,482  
Changes in operating assets and liabilities:        
Accounts receivable     36,062       (7,666 )
Inventories     (11,612 )     (34,824 )
Prepaid expenses and other current assets     19,208       (2,908 )
Other assets     (1,275 )     (5,086 )
Accounts payable and other accrued liabilities     28,699       4,366  
Accrued salaries and benefits     295       3,039  
Operating lease liabilities     (88,002 )      
Other long-term liabilities     578       24,731  
   Cash flows from operating activities     355,210       294,379  
Cash flows used in investing activities        
Purchases of property and equipment     (183,232 )     (177,082 )
   Cash flows used in investing activities     (183,232 )     (177,082 )
Cash flows used in financing activities        
Proceeds from revolving credit facilities     265,405       233,000  
Payments on revolving credit facilities     (180,405 )     (128,000 )
Payments on capital and financing lease obligations           (4,517 )
Payments on finance lease obligations     (690 )      
Payments of deferred financing costs           (2,131 )
Cash from landlords related to capital and financing lease obligations           3,643  
Repurchase of common stock     (176,310 )     (258,307 )
Proceeds from exercise of stock options     4,878       21,843  
Other     (319 )     (59 )
   Cash flows used in financing activities     (87,441 )     (134,528 )
   Increase / (Decrease) in cash, cash equivalents, and restricted cash     84,537       (17,231 )
Cash, cash equivalents, and restricted cash at beginning of the period     2,248       19,479  
Cash, cash equivalents, and restricted cash at the end of the period   $ 86,785     $ 2,248  
         

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 income before income taxes (adjusted EBT), 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 EBT, 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 you should not consider them 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 and adjusted EBITDA to net income for the thirteen and fifty-two weeks ended December 29, 2019 and December 30, 2018 and a reconciliation of EBT, net income and diluted earnings per share to adjusted EBT, adjusted net income and adjusted diluted earnings per share for the thirteen and fifty-two weeks ended December 29, 2019 and December 30, 2018:

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES
NON-GAAP MEASURE RECONCILIATION
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                 
    Thirteen weeks ended   Fifty-two weeks ended
    December 29,
2019
  December 30,
2018
  December 29,
2019
  December 30,
2018
Net income   $ 31,634   $ 12,703   $ 149,629   $ 158,536  
Income tax provision (1)     10,086     8,629     46,539     37,260  
Income before income taxes (Earnings before taxes "EBT")     41,720     21,332     196,168     195,796  
Special Items:                
Executive Compensation (2)         3,618     508     3,618  
Store closures (3)         7,961         7,961  
Total Special Items - pre-tax         11,579     508     11,579  
Adjusted EBT   $ 41,720   $ 32,911   $ 196,676   $ 207,375  
Net income   $ 31,634   $ 12,703   $ 149,629   $ 158,536  
Income tax provision (1)     10,086     8,629     46,539     37,260  
Interest expense, net     5,195     7,420     21,192     27,435  
Earnings before interest and taxes (EBIT)     46,915     28,752     217,360     223,231  
Depreciation, amortization and accretion     31,258     28,571     122,804     110,749  
Earnings before interest, taxes, depreciation and amortization (EBITDA)   $ 78,173   $ 57,323   $ 340,164   $ 333,980  
Special Items:                
Executive Compensation (2)         3,618     508     3,618  
Store closures (3)         7,961         7,961  
Total Special Items - pre-tax         11,579     508     11,579  
 Adjusted EBITDA   $ 78,173   $ 68,902   $ 340,672   $ 345,559  
Net income   $ 31,634   $ 12,703   $ 149,629   $ 158,536  
Special Items:                
Executive compensation, net of tax (2)         5,652         5,652  
Store closures, net of tax (3)         5,921     377     5,921  
Adjusted Net income before one-time tax benefit     31,634     24,276     150,006     170,109  
Income tax benefit related to Tax Act and other one-time tax benefits (4)                 (2,573 )
Adjusted Net income   $ 31,634   $ 24,276   $ 150,006   $ 167,536  
Diluted earnings per share   $ 0.27   $ 0.10   $ 1.25   $ 1.22  
Adjusted diluted earnings per share   $ 0.27   $ 0.19   $ 1.25   $ 1.29  
Diluted weighted average shares outstanding     118,219     127,398     119,742     129,776  
  1. Income tax provision includes approximately a $12 million (or $0.10 per diluted share) benefit during the fifty-two weeks ended December 30, 2018 in excess federal and state tax for share based compensation primarily associated with the exercise of expiring pre-IPO options.
  2. During the thirteen and fifty-two weeks ended December 30, 2018, the Company recorded one-time pre-tax 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.
  3. During the thirteen and fifty-two weeks ended December 30, 2018, in connection with the closure to 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.
  4. 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.

Source: Sprouts Farmers Market, Inc.
Phoenix, AZ
2/20/2020

 

   
Investor Contact: Media Contact:
Susannah Livingston Diego Romero
(602) 682-1584 (602) 682-3173
susannahlivingston@sprouts.com media@sprouts.com

 

Sprouts Farmers Market Aktie jetzt über den Testsieger (Finanztest 11/2020) handeln, ab 0 € auf Smartbroker.de



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Disclaimer

Sprouts Farmers Market, Inc. Reports Fourth Quarter and Full Year 2019 Results PHOENIX, Ariz., Feb. 20, 2020 (GLOBE NEWSWIRE) - Sprouts Farmers Market, Inc. (Nasdaq: SFM) today reported results for the 13-week fourth quarter and 52-week year ended December 29, 2019.  Fourth Quarter Highlights: Net sales of $1.4 billion; an …

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