Sprouts Farmers Market, Inc. · NASDAQ:SFM
Sprouts Farmers Market — FY2020 Earnings Presentation
24 slides from Sprouts Farmers Market's earnings presentation, Feb 25, 2021
Slide 1: Q4 & Full-Year 2020 Earnings
Q4 & Full-Year 2020 Earnings February 2021 Exhibit 99.2
Slide 2: Forward-Looking Statements
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 i
Slide 3: Jack Sinclair, CEO
3 Jack Sinclair CEO
Slide 4: Record Earnings & Robust Cash Flow in 2020
4 Record Earnings & Robust Cash Flow in 2020 Earnings Growth Cash Generation 99% EPS Percentage increase presented on 53-week basis, adjusted EPS. (1) $494M Cash from Operations
Slide 5: Innovative & Differentiated Products with Lifestyle Friendly Ingredients
5 Innovative & Differentiated Products with Lifestyle Friendly Ingredients Attributes include(1): Organics, Paleo, Keto, Plant Based, Non-GMO, Gluten Free, Vegan, Dairy-free, Grass Fed, Raw Organics represent 23% of total sales (1) Includes all produce
Slide 6: Good value every day, convenient omnichannel offerings
6 Good value every day, complemented by meaningful basket-driving promotions Convenient omnichannel offerings Delivery in every market Pick-up in every single store Owned Shop.sprouts.com Amplified fresh produce heritage - through better buying & smarter promotions Greatly increased our reach throug
Slide 7: Sprouts' Multi-Year Business Strategy
7 7 Sprouts’ Multi-Year Business Strategy Win with Target Customer Create an Advantaged Fresh Supply Chain Deliver Financial Targets and Box Economics Update Format and Expand in Select Markets Refine Brand and Marketing Approach Shifted media mix dramatically from print to digital Relaunched the br
Slide 8: Tremendous Opportunity to Gain Share in Winning Target Customer Segments
8 Tremendous Opportunity to Gain Share in Winning Target Customer Segments 8 Consumers Spend $1.2T on Food at Home Sprouts’ Share Today We still have Significant Opportunity to Introduce Target Customers to Sprouts Note: Aided Awareness represents awareness in Sprouts’ trade area zip codes only
Slide 9: Once Acquired, Sprouts' Customer Affinity is Very Strong
Once Acquired, Sprouts’ Customer Affinity is Very Strong and Inline with Best-in-Class Peers Source: Sprouts NPS study, September 2020
Slide 10: Pivoting Our Marketing Strategy to Drive More Profitable Growth
10 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
Slide 11: Providing Value to our Customers, Building the Sprouts Brand
11 Providing Value to our Customers, but in a Way that Builds the Sprouts Brand in a More Meaningful Way NEW OLD
Slide 12: High Growth Retailer - Annual Unit Growth Target of 10% or More
12 Unit growth (1) 12 High Growth Retailer - Annual Unit Growth Target of 10% or More Beyond 2021 300 – 400 New Stores in Expansion Markets 2019 & 2020 actual unit growth, 2021 outlook, 2022 and beyond represent a range of potential growth Expansion Markets Existing DCs Future DCs Existing Markets D
Slide 13: Creating an Advantaged Fresh Supply Chain
13 13 Savings of nearly 3000 Metric Tons of Carbon Dioxide Equivalent Creating an Advantaged Fresh Supply Chain within 250 Miles of the Majority of Stores 2 New DCs - CO & FL Transportation & Shrink Freshness & Local Produce In 2021…
Slide 14: Denise Paulonis, CFO
14 Denise Paulonis CFO
Slide 15: Sprouts is on a Stronger Foundation than Beginning of 2020
NET SALES $6.5B +15% YoY NET CASH PROVIDED by OPERATIONS $494M + 39% YOY ADJUSTED DILUTED Earnings Per Share $2.49 + 99% YOY 15 Sprouts is on a Stronger Foundation than Beginning of 2020 15 ($ in mm) ($ in mm) (1) See the Appendix to this presentation for a reconciliation of adjusted diluted EPS to
Slide 16: One of the Best Grocery Ecommerce Growth Stories
16 One of the Best Grocery Ecommerce Growth Stories 340% YoY Ecommerce Growth Ecommerce Penetration 9.5% Fiscal year 2020 period Customers can now shop how they like – In-Store, Pick-up, or Delivery
Slide 17: Structurally Changed Gross Margin
17 Structurally Changed Gross Margin Modest Give back from: Buying/cost benefits from abrupt restaurant closures Shrink leverage from faster moving product during COVID Short-term shrink benefit from extreme out-of-stocks early in pandemic Strategic investments In 2021… 2020 GM Improvement
Slide 18: Structurally Improved Margin Profile
18 Structurally Improved Margin Profile 18 ADJUSTED EBIT & Adjusted EBIT Margin(1) See the Appendix to this presentation for a reconciliation of EBIT to adjusted EBIT. For 2016-2017, adjustments to EBIT were immaterial; thus only EBIT is presented. 2020 is presented on a 53-week basis 2021E represen
Slide 19: In-line with Strategic Goals…Improving ROIC
19 In-line with Strategic Goals…Improving ROIC 19 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.
Slide 20: 2021 Outlook
20 2021 Outlook 20 Flat to up Slightly Sales Growth Approximately 20 New Stores Down Low to Mid Single Digit Comps Adjusted EBIT $295M to $315M Adjusted EPS $1.78 to $1.91 Capex $140M to $160M Approximately 26% Corporate Tax Rate
Slide 21: Appendix
21 Appendix
Slide 22: Non-GAAP Measure Reconciliation
22 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 adju
Slide 23: Appendix
23 Appendix Income tax provision (benefit) includes approximately $12 million (or $0.10 per diluted share) benefit during the fifty-two weeks ended December 30, 2018 and $10 million (or $0.08 per diluted share) in the fifty-two weeks ended December 31, 2017, in excess federal and state tax benefits
Slide 24: Reconciliation of ROIC to Net Income
24 Appendix The following table shows a reconciliation of ROIC to net income for the Company’s 2017, 2018, 2019 and 2020 fiscal years. SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES NON-GAAP MEASURE RECONCILIATION (UNAUDITED) (IN THOUSANDS)
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