Sprouts Farmers Market 2013 Annual Report Download - page 25

Table of Contents
2013, and we intend to achieve 12% or more annual new store growth over at least the next five years. However, we cannot assure
you that we will achieve this expected level of new store growth. We may not have the level of cash flow or financing necessary to
support our growth strategy. Additionally, our proposed expansion will place increased demands on our operational, managerial
and administrative resources. These increased demands could cause us to operate our existing business less effectively, which in
turn could cause deterioration in the financial performance of our existing stores. Further, new store openings in markets where we
have existing stores may result in reduced sales volumes at our existing stores in those markets. If we experience a decline in
performance, we may slow or discontinue store openings, or we may decide to close stores that we are unable to operate in a
profitable manner. If we fail to successfully implement our growth strategy, including by opening new stores, our financial condition
and operating results may be adversely affected.
On many of our projects, including build-to-suit and existing repurposed locations, we have received landlord contributions for
leasehold improvements and other build-out costs. We cannot guarantee that we will be able to continue to receive landlord
contributions at the same levels or at all. Any reductions of landlord contributions could have an adverse impact on our new store
cash-on-cash returns and our operating results.
We may be unable to maintain or increase comparable store sales, which could negatively impact our business and stock
price.
We may not be able to maintain or improve the levels of comparable store sales that we have experienced in the past. Our
comparable store sales growth could be lower than our historical average for many reasons, including:
These factors may cause our comparable store sales results to be materially lower than in recent periods, which could harm
our business and result in a decline in the price of our common stock.
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• general economic conditions;
•
slowing in the natural and organic retail sector;
• the impact of new and acquired stores entering into the comparable store base;
•
the opening of new stores that cannibalize store sales in existing areas;
• increased competitive activity;
• price changes in response to competitive factors;
•
possible supply shortages;
• consumer preferences, buying trends and spending levels;
• product price inflation and deflation;
•
the number and dollar amount of customer transactions in our stores;
• cycling against any year of above-average sales results;
•
our ability to provide product offerings that generate new and repeat visits to our stores; and
• the level of customer service that we provide in our stores.