News Details

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

March 2, 2023

PHOENIX, Ariz., March 02, 2023 (GLOBE NEWSWIRE) -- 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 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


    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  


    January 1, 2023     January 2, 2022  
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  
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  


    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:


    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

Investor Contact: Media Contact:  
Susannah Livingston   
(602) 682-1584     

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Source: SFM, LLC d/b/a Sprouts Farmers Market