Sprouts Farmers Market, Inc. · NASDAQ:SFM
Sprouts Farmers Market — Investor Presentation (March 2016)
22 slides from Sprouts Farmers Market's investor presentation, Mar 14, 2016
Slide 1: Investor Deck – March '16
INVESTOR DECK – MARCH ‘16 Exhibit 99.1
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
Forward-Looking Statements & 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 limited to, statements to the effect that Sprouts Farmers Marke
Slide 3: Overview of Sprouts
fie Si OVERVIEW OF SPROUTS
Slide 4: Sprouts Is Well Positioned to Meet the Needs of Today's Health Curious Shoppers
Pro Forma Net Sales1 Sprouts Is Well Positioned to Meet the Needs of Today’s Health Curious Shoppers Healthy grocery store rooted in fresh, natural and organic foods at affordable prices Broad consumer appeal One of the largest and fastest growing natural and organic retailers with significant white
Slide 5: A Grocery Shopping Experience that Makes Healthy Living Easy & Affordable
A Grocery Shopping Experience that Makes Healthy Living Easy & Affordable Differentiated Business Model Focused on Four Pillars Health Value Selection Engagement HEALTH SELECTION VALUE ENGAGEMENT
Slide 6: Sprouts – A Healthy Grocery Store that Flips the Conventional Model
Sprouts – A Healthy Grocery Store that Flips the Conventional Model Produce surrounded by a complete grocery offering Promote value everyday Differentiated assortment of high-quality, healthy foods: High standard Private Label Fresh natural and organic offering Doesn’t sell most national branded pac
Slide 7: Proven Concept: 217 Stores in 13 States
37 7 3 27 7 29 82 5 5 2 2 3 8 TN GA AL MO KS OK TX NM AZ UT CO NV CA AR MS LA FL SC NC PROVEN CONCEPT: 217 STORES IN 13 STATES AS OF DECEMBER 31, 2015 Sprouts’ footprint and near-term expansion covers high growth areas Demographics allows for deep penetration in markets Model works well in densely p
Slide 8: Reaching a Broad Base of Consumers Through Traditional & Digital Mediums
Reaching a Broad Base of Consumers Through Traditional & Digital MEDIUMS ¹ Represents actual promotions at each store during FY 2015. BROAD CUSTOMER DEMOGRAPHICS Middle income and higher Medium to above average education Boomers, Gen-X and rising Millennial demographic Diverse ethnic background Valu
Slide 9: Sprouts' Consumers are at Different Stages of Adoption
Sprouts’ Consumers are at Different Stages of Adoption ¹ Company consumer insight study Follows a specific diet because they have to (medical reasons) or they want to (weight management / ingredient avoidance) DIET FOLLOWER Does not follow a strict or specific diet, but health / wellness is importan
Slide 10: Sprouts' Main Competitor is the Traditional Grocery Store
Sprouts’ Main Competitor is the Traditional Grocery Store More than 50% of Sprouts’ consumers are coming from traditional grocers Our average consumer’s monthly spending will increase nearly 3x from their initial experimentation phase Significant opportunity to increase trial visits and basket size
Slide 11: Increase Relevance with Priorities for 2016
INCREASE RELEVANCE WITH PRIORITIES FOR 2016 SALES DRIVERS INFRASTRUCTURE WORKFORCE Deli expansion rollout Continue to build Private Label rooted in health, innovation and value Enhance partnerships Invest in technology to support growth Build on promotional effectiveness and pricing Improve operatio
Slide 12: Responsible Retailing for Sprouts
RESPONSIBLE RETAILING FOR SPROUTS IS COMPRISED OF FOUR MAIN FOCUS AREAS Food Rescue Program—donated approximately 14M pounds of food in 2015 Composting at 50 stores diverted 5.5 million pounds from the landfill in 2015 Recycled 60M pounds of cardboard in 2015 In-store “Green Leaders” engaged to impl
Slide 13: Business & Financial Performance
BUSINESS & FINANCIAL PERFORMANCE
Slide 14: Powerful Growth Business – Results Driven
POWERFUL GROWTH BUSINESS – RESULTS DRIVEN GROWTH RESULTS 9% Natural and Organic Sector Growth1 One of the Best White Space Opportunities in Retail 14% Unit Growth Compelling Store-Level Economics Mid to High Teens Sales Growth with Industry Leading Comps Deleveraged Capital Structure Ideal Free Cash
Slide 15: Balanced Sales Growth Across Comp Store Sales Growth & New Store Openings
BALANCED SALES GROWTH ACROSS COMP STORE SALES GROWTH & NEW STORE OPENINGS ¹ Pro forma net sales reflect the net sales of our predecessor entity, Henry’s and Sunflower as if the Transactions had been consummated on the first day of fiscal 2008. 2 “Comparable store sales growth” refers to the percenta
Slide 16: Comp Store Sales Growth Highlights
COMP STORE SALES GROWTH1 COMPS accelerated throughout the year HIGHLIGHTS Q4 Comps positively impacted by: Solid sales growth across departments Increased Holiday sales leading to strong traffic to the stores 27% Q4 2015 sales growth, 17% on a comparable 13 week basis 27 new stores in 2015 1,800 ite
Slide 17: A History of Strong Earnings Performance
A HISTORY OF STRONG EARNINGS PERFORMANCE Note: Financial information on this slide for fiscal 2012 gives pro forma effect to the Sunflower Transaction as if it had been consummated on the first day of fiscal 2012. ¹ See the Appendix to this presentation for a reconciliation of adjusted EBTIDA to net
Slide 18: Compelling Unit Economics
COMPELLING UNIT ECONOMICS TARGET NEW STORE ECONOMICS Store Size Net Cash Investment1 First Year Sales Initial Sales Growth ¹ Includes store build-out (net of contributions from landlords), inventory (net of payables) and cash pre-opening expenses. Average 28k to 30k square feet $3.1 million ~$12 to
Slide 19: Financial Priorities and Capital Structure
FINANCIAL PRIORITIES CAPITAL STRUCTURE Utilize strong free cash flow to self fund 14% unit growth and achieve strategic objectives Opportunistically employ $150 million share repurchase over next two years Preserve financial flexibility for opportunistic growth prospects $160 million outstanding on
Slide 20: Why Sprouts Is a Compelling Investment
WHY SPROUTS IS A COMPELLING INVESTMENT Authentic Fresh, Natural & Organic Food Offering at Great Value Fast Growing Segment of the U.S. Supermarket Industry with Strong Macro Tailwinds Significant New Store Growth Opportunity Supported by Broad Demographic Appeal Resilient Business Model with Compel
Slide 21: Appendix: Supplemental Materials
APPENDIX: SUPPLEMENTAL MATERIALS
Slide 22: Appendix: Reconciliation of Adjusted Net Income and Adjusted EBITDA
Appendix The following table shows a reconciliation of adjusted net income and adjusted EBITDA to net income and adjusted earnings per share to net income per share for the fourteen and fifty-three weeks ended January 3, 2016 and for thirteen and fifty-two weeks ended December 28, 2014: (a)Store clo
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