Sprouts Farmers Market 2013 Annual Report Download - page 65

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Table of Contents
Stores added through the Transactions contributed $514.7 million, or 75%, of the increase in net sales during fiscal 2012.
Stores acquired in the Sunflower Transaction contributed $280.3 million in net sales during fiscal 2012 and stores acquired in the
Henry’s Transaction contributed an incremental $234.4 million in net sales during fiscal 2012 compared to fiscal 2011.
New store openings during fiscal 2012 contributed $52.2 million, or 8%, of the increase in net sales during fiscal 2012. New
store openings during fiscal 2011 contributed an incremental $49.6 million, or 7%, of the increase in net sales during fiscal 2012
compared to fiscal 2011. The remaining $72.4 million, or 10%, of the increase in net sales during fiscal 2012 resulted from net sales
growth at stores operated prior to fiscal 2011.
On a pro forma basis, net sales increased during fiscal 2012 primarily as a result of fiscal 2012 pro forma comparable store
sales growth and new store openings during fiscal 2012. Pro forma comparable store sales growth of 9.7% during fiscal 2012
contributed $161.7 million, or 60%, of the increase in pro forma net sales during fiscal 2012. New store openings during fiscal 2012
contributed $64.9 million, or 24%, of the increase in pro forma net sales during fiscal 2012. The remaining $41.7 million, or 16%, of
the increase in pro forma net sales during fiscal 2012 was attributable to new store openings during fiscal 2011 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 fiscal 2012 primarily due to the increase in sales following the
Transactions, new store openings and sales growth, as discussed above. During fiscal 2012, gross profit increased $193.7 million
as a result of increased sales volume and $25.6 million as a result of improved gross margin. The 140 basis point increase in gross
margin during fiscal 2012 reflects (i) produce cost deflation in the first half of 2012, (ii) synergies from integration of the
Transactions, including consolidation of certain buying costs, and (iii) improved leverage of occupancy costs, principally resulting
from comparable store sales growth.
On a pro forma basis, cost of sales, buying and occupancy increased during fiscal 2012 primarily due to the increase in pro
forma net sales, driven by pro forma comparable store sales growth and new store openings. During fiscal 2012, pro forma gross
profit increased $76.1 million as a result of increased pro forma sales volume and $23.2 million as a result of improved pro forma
gross margin. The 110 basis point increase in pro forma gross margin during fiscal 2012 reflects produce cost deflation in the first
half of fiscal 2012, synergies realized following the Transactions and improved leverage of occupancy costs as a result of pro forma
comparable store sales growth.
60
Fiscal 2012
Fiscal 2011
Change
% Change
(dollars in thousands)
As reported:
Net sales
$
1,794,823
$
1,105,879
$
688,944
62
%
Cost of sales, buying and occupancy
1,264,514
794,905
469,609
59
%
Gross profit
530,309
310,974
219,335
71
%
Gross margin
29.5
%
28.1
%
1.4
%
Pro forma:
Net sales
$
1,990,963
$
1,722,655
$
268,308
16
%
Cost of sales, buying and occupancy
1,403,158
1,234,166
168,992
14
%
Gross profit
587,805
488,489
99,316
20
%
Gross margin
29.5
%
28.4
%
1.1
%