Sprouts Farmers Market, Inc. · NASDAQ:SFM
Sprouts Farmers Market — ICR Xchange 2014
24 slides from Sprouts Farmers Market's conference presentation, Jan 13, 2014
Slide 1: Overview of Sprouts
ICR Xchange January 2014 Exhibit 99.1
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non- GAAP Financial Measures Forward-Looking Statements and Non- GAAP Financial Measures 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
Slide 3: Overview of Sprouts
Slide 4: Sprouts at a Glance
Sprouts at a Glance High-growth, value-oriented natural and organic food retailer Broad consumer appeal One of the largest natural and organic retailers Significant momentum Significant white space opportunity
Slide 5: Benefitting from Long-Term Macro Trends
Benefitting from Long-Term Macro Trends Strong Market Opportunity 1 Supported by Strong Macro Tailwinds Sprouts is Outpacing Relevant Segments 2 Sprouts growing at 7x U.S. Supermarkets 2008-2012 CAGR: 2.4% 6.1% 8.6% 10.3% 17.1% U.S. Supermarkets Vitamins & Supplements Natural & Organic Value Health
Slide 6: Sprouts has a Differentiated Go-to-Market Strategy
Sprouts has a Differentiated Go-to-Market Strategy Complete Natural & Organic Offering HEALTH SELECTION VALUE SERVICE An Engaged, Loyal Customer Base Leading to Strong Financial Performance and Significant New Unit Growth Opportunity
Slide 7: Sprouts "Flips" the Conventional Grocery Store Model
Sprouts “Flips” the Conventional Grocery Store Model Produce surrounded by a complete grocery offering Differentiated assortment of high- quality, healthy alternatives Farmers market inspired, open store layout with low profile displays Convenient, small-box: 25 – 28k sq. ft. Comfortable, easy to sh
Slide 8: Sprouts Targets the Conventional Supermarket Customer
Sprouts Targets the Conventional Supermarket Customer Broad Customer Demographics Successful Across Markets Middle income and up Educated Wide spectrum of demographic and ethnic makeups Wanting to eat healthier Looking for value “Natural / lifestyle” markets and more “traditional” states Densely pop
Slide 9: Reaching a Broad Base of Consumers in Both Traditional and Digital Mediums
Reaching a Broad Base of Consumers in Both Traditional and Digital Mediums More than 10 million weekly circulars Reinforces value offering 25+ annual department promotions ¹ , which drive transition to increased basket size and higher margin Digital platform for relevance today and tomorrow ¹ Repres
Slide 10: Slide 10
Slide 11: Estimated 15+ Years of New Store Growth Potential
Estimated 15+ Years of New Store Growth Potential U.S. Store Count¹ New Mexico Texas Colorado Utah Arizona Nevada California Oklahoma 1 Based on an assumed new store growth rate of 12% per year and research conducted by Buxton Company in 2012. Proven Concept: 167 stores in eight states Strong perfor
Slide 12: Business & Financial Performance
Business & Financial Performance
Slide 13: A Powerful Long-Term Growth Engine
A Powerful Long-Term Growth Engine High, balanced sales growth Margin expansion in existing stores Operating leverage from scale and infrastructure Deleverage capital structure Long-Term Net Earnings Growth Target of 20%+
Slide 14: Compelling Unit Economics
Compelling Unit Economics Target New Store Economics Pre-Tax Cash-on-Cash Returns 35%-40% within 3-4 years ¹ Includes store build-out (net of contributions from landlords), inventory (net of payables) and cash pre-opening expenses. Store Size 25 – 28k sq. ft. Net Cash Investment¹ $2.8 million First
Slide 15: History of Organic Growth
History of Organic Growth Pro Forma Comparable Store Sales Growth 2 Pro Forma Net Sales 1 Balanced Sales Growth Across Comparable Store Sales Growth and New Store Openings ¹ Pro forma net sales reflect the net sales of our predecessor entity and Sunflower as if the Henry’s Transaction and Sunflower
Slide 16: 2013 Growth Guidance
2013 Growth Guidance Unit Growth 19 New Stores Comparable Store Sales Growth 9.0% - 9.5% Total Sales Growth 20% - 21% Adjusted EBITDA Growth 28% - 31%
Slide 17: Long-Term Financial Targets
Long-Term Financial Targets Unit Growth ~12% Comparable Store Sales Growth 6%+ Total Sales Growth ~15% EBIT Growth 17 – 20% Net Income Growth 20%+
Slide 18: Why Sprouts is a Compelling Investment
Why Sprouts is a Compelling Investment Significantly lower prices 9% CAGR to $98B in 2020 1,200 potential stores (7.2x current base) Target 35 – 40% cash-on- cash returns 20% 2-year comps Authentic Natural and Organic Food Offering at Great Value Fast Growing Segment of the U.S. Supermarket Industry
Slide 19: Appendix: Supplemental Materials
Appendix: Supplemental Materials
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation (a) See “Unaudited Supplemental Pro Forma Condensed Consolidated Financial Information” for a reconciliation of pro forma net income to net income for the thirteen and thirty-nine weeks ended September 30, 2012. (b) Store closure and exit costs have been excluded from adjuste
Slide 21: Pro Forma Reconciliation
Pro Forma Reconciliation SPROUTS FARMERS MARKET, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Thirteen Weeks Ended September 30, 2012 (in thousands, except per share amounts)
Slide 22: Pro Forma Reconciliation
Pro Forma Reconciliation SPROUTS FARMERS MARKET, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Thirty-nine Weeks Ended September 30, 2012 (in thousands, except per share amounts)
Slide 23: Pro Forma Reconciliation
Pro Forma Reconciliation SPROUTS FARMERS MARKET, INC. NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION 1. Basis of Presentation and Description of Transactions Effective May 29, 2012, the Company acquired all of the outstanding common and preferred stock of Sunflower in the
Slide 24: Farmers Market
FARMERS MARKET