SFMMEDIUM SIGNALOPERATIONAL10-K

SFM executed aggressive expansion with 37 new stores while substantially improving profitability and reducing debt burden by half.

The company's ability to grow both revenue and margins simultaneously while expanding its footprint demonstrates strong operational execution and market positioning. The 50% debt reduction alongside expansion suggests robust cash generation and disciplined capital allocation, though rising current liabilities warrant monitoring for working capital pressures.

Comparing 2026-02-19 vs 2025-02-20View on EDGAR →
FINANCIAL ANALYSIS

SFM delivered strong financial performance with net income growing notably to $524M and operating income expanding meaningfully to $686M, reflecting improved operational efficiency. The company simultaneously reduced total debt by half to $125M while funding expansion, though current liabilities rose 28% to $871M, likely reflecting increased working capital needs from rapid store growth. Overall, the financial picture signals a company successfully scaling operations while maintaining margin discipline and reducing leverage.

FINANCIAL STATEMENT CHANGES
Total Debt
Balance Sheet
-50%
$250.0M→$125.0M

Debt reduced 50% — deleveraging strengthens balance sheet and reduces financial risk.

Net Income
P&L
+37.6%
$380.6M→$523.7M

Net income grew 37.6% — bottom-line growth signals improving overall business health.

Operating Income
P&L
+36%
$504.5M→$686.2M

Operating leverage kicking in — revenue growth outpacing cost growth, a hallmark of scaling businesses.

Interest Expense
P&L
+29.6%
$21.2M→$27.4M

Interest costs rose 29.6% — monitor debt levels and coverage ratio in rising rate environment.

Current Liabilities
Balance Sheet
+28.1%
$680.0M→$870.8M

Current liabilities rose 28.1% — increased short-term obligations, watch current ratio.

Inventory
Balance Sheet
+24.4%
$343.3M→$427.1M

Inventory built 24.4% — monitor whether demand supports this build or if write-downs may follow.

Current Assets
Balance Sheet
+19.9%
$675.5M→$809.9M

Current assets grew 19.9% — improving short-term liquidity or inventory/receivables build.

Total Liabilities
Balance Sheet
+18.8%
$2.3B→$2.8B

Liabilities increased 18.8% — monitor debt-to-equity ratio and interest coverage.

Gross Profit
P&L
+16.1%
$2.9B→$3.4B

Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.

Total Assets
Balance Sheet
+14.2%
$3.6B→$4.2B

Asset base grew 14.2% — expansion through organic growth, acquisitions, or capital deployment.

LANGUAGE CHANGES
NEW — 2026-02-19
PRIOR — 2025-02-20
ADDED
As of February 17, 2026, there were 94,576,393 outstanding shares of the registrant s common stock, $0.001 par value per share.
Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant s fiscal year ended December 28, 2025.
Headquartered in Phoenix with 477 stores in 24 states as of December 28, 2025, we are one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States.
From 2021 through 2025, we have opened 112 new stores and remodeled one store featuring our updated format.
As a step to improve our fresh supply chain, in 2025 we began the transition to a self-distribution model for meat and seafood through our fresh distribution centers.
As a result, we are better leveraging our existing distribution center capacity, and approximately 80% of our stores were within 250 miles of a distribution center as of December 28, 2025.
We are increasing our use of data analytics and insights, including through the nationwide launch of our Sprouts Rewards loyalty program in 2025.
We are intentional about our company culture, rooted in our purpose, with a dedication to developing team members throughout the organization.
We believe each of our departments provides high-quality, differentiated and value-oriented offerings for our customers which we continuously refine with our customers' preferences in mind.
Our broad assortment features differentiated, attribute driven products that create an engaging and exploratory shopping experience for our customers.
REMOVED
As of February 18, 2025, there were 98,585,382 outstanding shares of the registrant s common stock, $0.001 par value per share.
Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant s fiscal year ended December 29, 2024.
Headquartered in Phoenix with 440 stores in 24 states as of December 29, 2024, we are one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States.
From 2021 through 2024, we have opened 75 new stores and remodeled one store featuring our updated format.
Following the opening of two fresh distribution centers in fiscal 2021 and the relocation of our Southern California distribution center, closure of our Georgia distribution center and partnership with a third-party fresh distribution center in the Northeast in fiscal 2023, we are better leveraging our existing distribution center capacity, and approximately 80% of our stores were within 250 miles of a distribution center as of December 29, 2024.
We strive to create a strong and unified company culture, rooted in our purpose, with a dedication to developing team members throughout the entire organization.
Sprouts Brand We continue to expand the breadth of our Sprouts branded products with a dedicated product development team focused on continuing this growth.
We sell a broad assortment of products that are differentiated, attribute focused and fun to explore, offer incredible taste, quality, value and experience, and are only available at Sprouts.
Our program to update and redesign all Sprouts branded products is over 90% complete, and we expect to complete the refresh and redesign of our Vitamins and Supplements in 2025.
We have experienced and expect to continue to see positive impact in terms of sales and recognition from our new food and beverage design.
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