Sprouts Farmers Market 2013 Annual Report Download - page 41

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Table of Contents
Determining market values using a discounted cash flow method requires that we make significant estimates and
assumptions, including long-term projections of cash flows, market conditions and appropriate market rates. Our judgments are
based on historical experience, current market trends and other information. In estimating future cash flows, we rely on internally
generated forecasts for operating profits and cash flows, including capital expenditures. Based on our annual impairment test
during fiscal 2011, 2012 and 2013, no goodwill impairment charge was required to be recorded. Changes in estimates of future
cash flows caused by items such as unforeseen events or changes in market conditions could negatively affect our reporting unit’s
fair value and result in an impairment charge. Factors that could cause us to change our estimates of future cash flows include a
prolonged economic crisis, successful efforts by our competitors to gain market share in our core markets, our inability to compete
effectively with other retailers or our inability to maintain price competitiveness. An impairment of a significant portion of our goodwill
could materially adversely affect our financial condition and results of operations.
Risks Related to Ownership of our Common Stock
Our stock price may be volatile, and you may not be able to resell your shares at or above the price you paid for them
or at all.
Prior to our IPO, there had been no public market for our common stock. An active public market for our common stock may
not be sustained. If an active public market is not sustained, it may be difficult for you to sell your shares of our common stock at a
price that is attractive to you, or at all. The price of our common stock in any such market may be higher or lower than the price that
you paid.
There is no guarantee that our common stock will appreciate in value or even maintain the price at which our stockholders
have purchased their shares. The trading price of our common stock may be volatile and subject to wide price fluctuations in
response to various factors, many of which are beyond our control, including the following:
36
• actual or anticipated fluctuations in our quarterly or annual financial results;
•
the financial guidance we may provide to the public, any changes in such guidance, or our failure to meet such guidance;
• failure of industry or securities analysts to maintain coverage of our company, changes in financial estimates by any
industry or securities analysts that follow our company, or our failure to meet such estimates;
• various market factors or perceived market factors, including rumors, whether or not correct, involving us or our
competitors;
• fluctuations in stock market prices and trading volumes of securities of similar companies;
•
sales, or anticipated sales, of large blocks of our stock;
• short selling of our common stock by investors;
• additions or departures of key personnel;
•
new store openings or entry into new markets by us or by our competitors;
• regulatory or political developments;
• changes in accounting principles or methodologies;
• litigation and governmental investigations;
• acquisitions by us or by our competitors; and
•
general financial market conditions or events.