Sprouts Farmers Market, Inc. Files 2023 Annual Report (10-K)

TL;DR

<b>Sprouts Farmers Market, Inc. has filed its 2023 10-K report detailing financial performance, assets, liabilities, and executive compensation.</b>

AI Summary

Sprouts Farmers Market, Inc. (SFM) filed a Annual Report (10-K) with the SEC on February 22, 2024. Sprouts Farmers Market, Inc. filed its 10-K report for the fiscal year ending December 31, 2023. The filing includes information on property, plant, and equipment, as well as long-term debt and finance lease liabilities. Details on interest income and expense net are provided for the fiscal years. Fair value measurements for recurring items, particularly those categorized under Level 2 inputs, are detailed as of December 31, 2023. The report references awards granted under the 2022 Incentive Plan, including performance shares and restricted stock units.

Why It Matters

For investors and stakeholders tracking Sprouts Farmers Market, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Sprouts Farmers Market's financial health and operational status for the fiscal year 2023, crucial for investors assessing the company's performance and future prospects. The detailed breakdown of assets, liabilities, and executive compensation offers insights into the company's strategic financial management and its commitment to shareholder value.

Risk Assessment

Risk Level: medium — Sprouts Farmers Market, Inc. shows moderate risk based on this filing. The company operates in the highly competitive grocery store sector, facing risks from other retailers and changing consumer preferences, as indicated by the 'RETAIL-GROCERY STORES [5411]' SIC code.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand Sprouts Farmers Market's competitive position and potential challenges in the grocery retail market.

Key Numbers

• 2023-12-31 — Fiscal Year End (The report covers the fiscal year ending on this date.)
• 2024-02-22 — Filing Date (The date the 10-K was filed with the SEC.)
• 5411 — SIC Code (Standard Industrial Classification for Grocery Stores.)

Key Players & Entities

• Sprouts Farmers Market, Inc. (company) — Filer of the 10-K report.
• 2023-12-31 (date) — Fiscal year end date for the report.
• 2024-02-22 (date) — Filing date of the 10-K report.
• Phoenix, AZ (location) — Business and mailing address of the company.
• 480-814-8016 (phone_number) — Business phone number.
• Ronald Cohn Inc. (company) — Mentioned in relation to common stock on March 20, 2023.

FAQ

Risk Factors

• Competition [high — market]: The company operates in a highly competitive grocery retail market, facing competition from national, regional, and local retailers, as well as online grocers.
• Supply Chain and Sourcing [medium — operational]: Disruptions in the supply chain or issues with sourcing fresh produce and other goods could impact the company's ability to meet customer demand and maintain product quality.
• Interest Rate Risk [medium — financial]: Changes in interest rates can affect the cost of borrowing and the company's net interest expense, particularly given its outstanding debt.

Key Dates

• 2023-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K.
• 2024-02-22: 10-K Filing Date — Official date the annual report was submitted to the SEC.

Glossary

10-K

An annual report required by the U.S. Securities and Exchange Commission (SEC), which gives a comprehensive summary of a company's financial performance. (This is the primary document filed by Sprouts Farmers Market, Inc. to report its annual financial results and business operations.)

Key Financial Figures

• $0.001 — nge on Which Registered Common Stock, $0.001 par value SFM Nasdaq Global Select

Filing Documents

• sfm-20231231.htm (10-K) — 3265KB
• sfm-ex21_1.htm (EX-21.1) — 35KB
• sfm-ex23_1.htm (EX-23.1) — 4KB
• sfm-ex31_1.htm (EX-31.1) — 14KB
• sfm-ex31_2.htm (EX-31.2) — 11KB
• sfm-ex32_1.htm (EX-32.1) — 11KB
• sfm-ex32_2.htm (EX-32.2) — 11KB
• sfm-ex97_1.htm (EX-97.1) — 46KB
• img144119217_0.jpg (GRAPHIC) — 18KB
• img144119217_1.jpg (GRAPHIC) — 89KB
• img144119217_2.jpg (GRAPHIC) — 91KB
• img144119217_3.jpg (GRAPHIC) — 54KB
• 0000950170-24-018768.txt (&nbsp;) — 15964KB
• sfm-20231231.xsd (EX-101.SCH) — 2159KB
• sfm-20231231_htm.xml (XML) — 3046KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 15 Item 1B. Unresolved Staff Comments 30 Item 1C. Cybersecurity 30 Item 2.

Properties

Properties 32 Item 3.

Legal Proceedings

Legal Proceedings 33 Item 4. Mine Safety Disclosures 33 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 34 Item 6. Reserved 36 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 37 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 54 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 55 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 95 Item 9A.

Controls and Procedures

Controls and Procedures 95 Item 9B. Other Information 96 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 96 PART III Item 10. Directors, Executive Officers and Corporate Governance 97 Item 11.

Executive Compensation

Executive Compensation 97 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 97 Item 13. Certain Relationships and Related Transactions, and Director Independence 97 Item 14. Principal Accountant Fees and Services 97 PART IV Item 15. Exhibits and Financial Statement Schedules 97 Item 16. Form 10-K Summary 100

Signatures

Signatures 101 Table of Contents As used in this Annual Report on Form 10-K, unless the context otherwise requires, references to the "Company," "Sprouts," "we," "us" and "our" refer to Sprouts Farmers Market, Inc., a Delaware corporation, and, where appropriate, its subsidiaries. The inclusion of our website addresses in this Annual Report on Form 10-K does not include or incorporate by reference the information on or accessible through our websites herein. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains "forward-looking statements" that involve substantial risks and uncertainties. The statements contained in this Annual Report on Form 10-K that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (referred to as the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (referred to as the "Exchange Act"), including, but not limited to, statements regarding our growth strategy, expectations, beliefs, intentions, future operations, future financial position, future revenue, projected expenses, and plans and objectives of management. In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "estimate," "expect," "intend," "may," "might," "plan," "project," "will," "would," "should," "could," "can," "predict," "potential," "continue," "objective," or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements reflect our current views about future events and involve known risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievement to be materially different from those expressed or implied by the forward-looking statements. Factors that could cause or co

Business

Item 1. Business Sprouts Farmers Market offers a unique specialty grocery experience featuring an open layout with fresh produce at the heart of the store. Sprouts inspires wellness naturally with acarefully curatedassortment of better-for-you products paired with purpose-driven people. We continue to bring the latest in wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based and gluten-free. From our founding in 2002, we have grown rapidly, significantly increasing our sales, store count and profitability. Headquartered in Phoenix with 407 stores in 23 states as of December 31, 2023, we are one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States. Our Growth Strategy Since 2020, we have focused on our long-term growth strategy that we believe is transforming our company and driving profitable growth. We continue to execute on this strategy, focusing on the following areas: Win with Target Customers . We are focusing attention on our target customers, identified through research as health enthusiasts' and selective shoppers', where there is ample opportunity to gain share within these customer segments. We believe our business can continue to grow by leveraging existing strengths in a unique assortment of better-for-you, quality products and by providing a full omnichannel offering through delivery or pickup via our website or the Sprouts app. Update Format and Expand in Select Markets. We are delivering unique smaller stores with expectations of stronger returns, while maintaining the approachable, fresh-focused farmer's market heritage Sprouts is known for. From 2021 through 2023, we have opened 42 new stores and remodeled one store featuring our new format. Our geographic store expansion and new store placement will intersect where our target customers live, in markets with growth potential and supply chain support, which we believe will provide a long