Sprouts Farmers Market 2013 Annual Report Download - page 57

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Table of Contents
Net sales increased during 2013 as compared to 2012, primarily as a result of (i) stores added through the Sunflower
Transaction in fiscal 2012, (ii) sales growth at stores operated prior to 2013 and (iii) new store openings.
Stores added through the Sunflower Transaction contributed $252.5 million, or 39%, of the increase in net sales for 2013. Net
sales growth at stores operated prior to December 30, 2012 contributed $206.4 million, or 32% of the increase in net sales for
2013. New store openings during 2013 contributed $186.1 million, or 29%, of the increase in net sales during 2013. These
increases were partially offset by $2.0 million of net sales related to a store closed in 2012.
Comparing 2013 to pro forma 2012, net sales increased primarily as a result of pro forma comparable store sales growth and
new store openings. Pro forma comparable store sales growth of 10.7% during 2013 contributed $206.4 million, or 46% of the
increase in pro forma net sales during 2013. New store openings during 2013 contributed $186.1 million, or 42%, of the increase in
net sales during 2013. The remaining $54.4 million, or 12%, of the increase in net sales during 2013 was attributable to new store
openings during fiscal 2012 not yet reflected in pro forma comparable store sales growth.
Cost of sales, buying and occupancy and gross profit
Cost of sales, buying and occupancy increased during 2013 compared to 2012, primarily due to the increase in sales following
the Sunflower Transaction, comparable store sales growth and new store openings, as discussed above. During 2013, gross profit
increased $190.0 million as a result of increased sales volume and $5.0 million as a result of an increase in gross margin. Gross
margin for 2013 increased 20 basis points. This improvement was driven by leverage in occupancy, promotional and buying costs.
This leverage was partially offset by lower margins in produce driven by inflation in certain commodity items when compared to the
exceptional produce growing season in 2012. In addition, we experienced lower margins in the vitamin, supplement and body care
departments as a result of mark downs from merchandise alignment.
Comparing 2013 to pro forma 2012, cost of sales, buying and occupancy and gross margin increased primarily due to the
factors noted above.
52
Fiscal 2013
Fiscal 2012
Change
% Change
(dollars in thousands)
As reported:
Net sales
$
2,437,911
$
1,794,823
$
643,088
36
%
Cost of sales, buying and occupancy
1,712,644
1,264,514
448,130
35
%
Gross profit
725,267
530,309
194,958
37
%
Gross margin
29.7
%
29.5
%
0.2
%
Pro forma:
Net sales
$
2,437,911
$
1,990,963
$
446,948
22
%
Cost of sales, buying and occupancy
1,712,644
1,403,158
309,486
22
%
Gross profit
725,267
587,805
137,462
23
%
Gross margin
29.7
%
29.5
%
0.2
%