Financial Analysis

"Commitments and Contingencies The Company is exposed to claims and litigation matters arising in the ordinary course of business and uses various methods to resolve these matters that are believed to best serve the interests of the Companys stakeholders. The Companys primary contingencies are associated with self-insurance obligations and litigation matters. Self-insurance liabilities require significant judgment and actual claim settlements and associated expenses may differ from the Companys current provisions for loss. The Company records an accrual for legal contingencies when it determines that it is probable that the Company has incurred a liability and can reasonably estimate the amount of the loss. However, predicting the outcomes of legal matters involves substantial uncertainties. While management currently believes that estimated liabilities recorded are reasonable and not material to the Company, differences in actual outcomes or changes in management's evaluation of estimated liabilities could arise that could be material to the Company's results of operations. Litigation Harvest Sherwood In February 2025, the Company terminated its agreement with Harvest Sherwood Food Distributors, Inc. (Harvest Sherwood) for the distribution of certain meat and seafood products to the Company due to, among other things, Harvest Sherwoods failure to pay the Companys vendors for these products. Subsequently, on February 24, 2025, Harvest Sherwood filed a complaint against the Co …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

In accordance with ASC 606, the following table represents a disaggregation of revenue for the thirteen and twenty-six weeks ended June 28, 2026 and June 29, 2025: Thirteen weeks ended June 28, 2026 June 29, 2025 Perishables $ 1,329,582 57.2 % $ 1,271,145 57.2 % Non-Perishables 996,222 42.8 % 949,457 42.8 % Net Sales $ 2,325,804 100.0 % $ 2,220,602 100.0 % Twenty-six weeks ended June 28, 2026 June 29, 2025 Perishables $ 2,646,166 56.8 % $ 2,540,877 57.0 % Non-Perishables 2,008,817 43.2 % 1,916,161 43.0 % Net Sales $ 4,654,983 100.0 % $ 4,457,038 100.0 %

DisaggregationOfRevenueTableTextBlock

"Share-Based Compensation 2022 Incentive Plan In March 2022, the Board adopted the Sprouts Farmers Market, Inc. 2022 Omnibus Incentive Compensation Plan (the 2022 Incentive Plan), which became effective May 25, 2022, upon approval by the Companys stockholders. The 2022 Incentive Plan provides team members of the Company, certain consultants and advisors who perform services for the Company, and non-employee members of the Board with the opportunity to receive grants of equity awards, including stock options, RSUs, PSAs, and other stock-based awards. The 2022 Incentive Plan replaced the 2013 Incentive Plan (as defined below). Awards Granted under the 2022 Incentive Plan During the twenty-six weeks ended June 28, 2026, the Company granted the following share-based compensation awards under the 2022 Incentive Plan: Grant Date RSUs PSAs Options March 12, 2026 335,408 119,012 112,765 April 30, 2026 7,395 2,125 2,798 June 4, 2026 9,469 Total 352,272 121,137 115,563 Weighted average grant date fair value $ 78.94 $ 78.89 $ 30.33 Weighted average exercise price $ $ $ 78.91 The aggregate number of shares of common stock that may be issued to team members and directors under the 2022 Incentive Plan may not exceed 6,600,000, subject to the following adjustments. If any awards granted under the 2022 Incentive Plan, terminate, expire, or are cancelled, forfeited, exchanged, or surrendered without having been exercised, vested or paid in shares, the shares will again be available for purpos …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements The Company records its financial assets and liabilities in accordance with the framework for measuring fair value in accordance with GAAP. This framework establishes a fair value hierarchy that prioritizes the inputs used to measure fair value: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Fair value measurements of nonfinancial assets and nonfinancial liabilities are primarily used in the impairment analysis of goodwill, intangible assets and long-lived assets. The Company did not have any financial liabilities measured at fair value on a recurring basis as of June 28, 2026 and December 28, 2025. The determination of fair values of certain tangible and intangible assets for purposes of the Companys goodwill or long-lived asset impairment evaluation is based upon Level 3 inputs. When necessary, the Company uses third party market data and market participant assumptions to derive the fair value of its asset groupings, which primarily include right-of-use lease assets and property and equipment. Cash, cash equivalents, restr …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The Companys effective tax rate increased to 25.8% for the thirteen weeks ended June 28, 2026, compared to 25.6% for the thirteen weeks ended June 29, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for share-based compensation in the current year and amended return true up in the prior year quarter partially offset by a decrease in non-deductible executive compensation. The income tax effect resulting from excess tax benefits of share-based payment awards was $0.4 million and $1.5 million for the thirteen weeks ended June 28, 2026 and June 29, 2025, respectively. The Companys effective tax rate increased to 24.8% for the twenty-six weeks ended June 28, 2026, compared to 22.9% for the twenty-six weeks ended June 29, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for share-based compensation in the current year partially offset by a decrease in non-deductible executive compensation. The income tax effect resulting from excess tax benefits of share-based payment awards was $4.6 million and $14.3 million for the twenty-six weeks ended June 28, 2026 and June 29, 2025, respectively. The Company files income tax returns for federal purposes and in many states. The Companys tax filings remain subject to examination by applicable tax authorities for a certain length of time, generally three years, following the tax year to which those filings relate. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Recently Issued Accounting Pronouncements Not Yet Adopted Disaggregation of Income Statement Expenses In November 2024, the Financial Accounting Standards Board (the ""FASB"") issued Accounting Standards Update (""ASU"") no. 2024-03, ""Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses"". The standard requires public entities to disclose additional disaggregation of expense in the notes to the financial statements for interim and annual reporting periods. The guidance is effective for the Company for its fiscal year 2027. Early adoption is permitted, and the guidance should be applied prospectively, with an option to apply it retrospectively. The Company is currently evaluating the potential impact of this ASU on its consolidated financial statements and disclosures. Intangibles Goodwill and Other Internal-Use Software In September 2025, the FASB issued ASU no. 2025-06, ""IntangiblesGoodwill and OtherInternal-Use Software (Subtopic 350-40)"". The standard clarifies and modernizes the accounting for costs related to the internal-use software in Accounting Standards Codification (""ASC"") 350-40. The guidance removes all references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. The guidance is effective for the Company for its fiscal year 2028. Early adoption is permitted, as of the beginning of an annual reporting peri …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Segments The Company has one operating segment and, therefore, one reportable segment: healthy grocery stores. The Company derives all its revenues from the sale of products at its various store locations across the United States. The accounting policies of the segment are the same as described in the summary of significant accounting policies. The Companys chief operating decision maker (CODM) is the chief executive officer. The CODM assesses performance and allocates resources based on consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. The following table represents the significant expense and key metrics reviewed by the CODM: Thirteen weeks ended Twenty-six weeks ended June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net Sales $ 2,325,804 $ 2,220,602 $ 4,654,983 $ 4,457,038 Less: Cost of sales 1,425,156 1,358,002 2,837,059 2,708,075 Direct store expenses 596,556 552,027 1,167,151 1,086,824 Other segment items (1) 129,918 131,217 261,292 256,451 Interest expense/(income), net 68 (431) (61) (1,355) Income tax provision 44,911 46,084 96,623 93,314 Net income $ 129,195 $ 133,703 $ 292,919 $ 313,729 (1) Other segment items include non-store selling, general, and administrative expenses, depreciation and amortization, store closure costs, and other overhead expenses. The Company categorizes the varieties of products it sells as perishable and non-perishable. Perishable product categories include produce, m …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"Summary of Significant Accounting Policies Revenue Recognition The Companys performance obligations are satisfied upon the transfer of goods to the customer, which occurs at the point of sale, and payment from customers is also due at the time of sale. Proceeds from the sale of gift cards are recorded as a liability at the time of sale and recognized as sales when they are redeemed by the customer, and the performance obligation is satisfied by the Company. The Companys gift cards do not expire. Based on historical redemption rates, a small and relatively stable percentage of gift cards will never be redeemed, referred to as ""breakage."" Estimated breakage revenue is recognized over time in proportion to actual gift card redemptions and was not material in any period presented. The outstanding gift card liability balance is included within accrued liabilities on the Company's consolidated balance sheets. Beginning in July 2025, the Company implemented a customer loyalty program under which customers earn points on qualifying purchases. Points may be redeemed in future periods for rewards to be used for discounts on the Company's products. The loyalty points represent a material right to the customer and are accounted for as a separate performance obligation. At the time of purchase, the Company allocates a portion of the transaction price to a deferred loyalty liability based on the products' estimated standalone selling price, net of estimated breakage. Revenue allocated t …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"Stockholders Equity Share Repurchases On August 13, 2025, the Company's board of directors (the ""Board"") authorized a new $1 billion share repurchase program for its common stock. The new authorization replaced the Company's then-existing share repurchase authorization of $600 million that was due to expire on May 22, 2027, of which $142.6 million remained available upon its replacement, and under which no further shares may be repurchased. The new repurchase authorization does not have an expiration date; however, the Board expects to periodically review the authorization to assess its continued appropriateness in light of the Company's capital allocation priorities, market conditions, alternative investment opportunities, and other factors. The following table outlines the common stock share repurchase programs authorized by the Board and the related repurchase activity and available authorization as of June 28, 2026: Effective date Expiration date Amount authorized Cost of repurchases Authorization available May 22, 2024 May 22, 2027 $ 600,000 $ 457,408 $ August 13, 2025 N/A $ 1,000,000 $ 373,994 $ 626,006 The shares under the Companys current repurchase program may be purchased on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. The Boards authorization of the share r …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing