Sprouts Farmers Market 2014 Annual Report Download - page 45

efforts and our in-store education. We believe our operating margins will continue to benefit from scale
efficiencies, information technology systems, continued cost discipline and enhancements to our
merchandise offerings. We are committed to growing the Sprouts brand by supporting our stores, product
offerings and corporate partnerships, including the expansion of innovative marketing and promotional
strategies through print, digital and social media platforms, all of which promote our mission of “Healthy
Living for Less.”
Components of Operating Results
We report our results of operations on a 52- or 53-week fiscal year ending on the Sunday closest to
December 31, with each fiscal quarter generally divided into three periods consisting of two four-week
periods and one five-week period. Fiscal 2014, 2013 and 2012 were 52-week years ending on
December 28, 2014, December 29, 2013, and December 30, 2012, respectively.
Net Sales
We recognize sales revenue at the point of sale, with discounts provided to customers reflected as a
reduction in sales revenue. Proceeds from sales of gift cards are recorded as a liability at the time of sale,
and recognized as sales when they are redeemed by the customer. We do not include sales taxes in net
sales.
We monitor our comparable store sales growth to evaluate and identify trends in our sales
performance. Pro forma comparable store sales growth reflects comparable store sales growth on a pro
forma basis calculated including all stores acquired in the Transactions. Our practice is to include sales
from a store in comparable store sales beginning on the first day of the 61st week following the store’s
opening and to exclude sales from a closed store from comparable store sales beginning on the day of
closure. We include sales from an acquired store in comparable store sales on the later of (i) the day of
acquisition or (ii) the first day of the 61st week following the store’s opening. This practice may differ from
the methods that other retailers use to calculate similar measures. We use pro forma comparable store
sales to calculate pro forma comparable store sales growth. See the table titled “Supplemental Pro Forma
Data—Net Sales” in Item 6. Selected Financial Data.
Our net sales have increased as a result of new store openings, comparable store sales growth and
the full integration of Sunflower stores. Factors that influence comparable store sales growth and other
sales trends include:
• general economic conditions and trends, including levels of disposable income and consumer
confidence;
• consumer preferences and buying trends;
• our ability to identify market trends, and to source and provide product offerings that promote
customer traffic and growth in average ticket;
• the number of customer transactions and average ticket;
• the prices of our products, including the effects of inflation and deflation;
• opening new stores in the vicinity of our existing stores;
• advertising, in-store merchandising and other marketing activities; and
• our competition, including competitive store openings in the vicinity of our stores and competitor
pricing and merchandising strategies.
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