Sprouts Farmers Market, Inc (SFM) has reported 39.73 percent plunge in profit for the quarter ended Jan. 01, 2017. The company has earned $17 million, or $0.12 a share in the quarter, compared with $28.22 million, or $0.18 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $17 million, or $0.12 a share compared with $28.43 million or $0.18 a share, a year ago. Revenue during the quarter grew 5.95 percent to $985.70 million from $930.30 million in the previous year period. Gross margin for the quarter contracted 67 basis points over the previous year period to 28.22 percent. Total expenses were 96.94 percent of quarterly revenues, up from 94.87 percent for the same period last year. That has resulted in a contraction of 207 basis points in operating margin to 3.06 percent.
Operating income for the quarter was $30.19 million, compared with $47.73 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $50.80 million compared with $66.71 million in the prior year period. At the same time, adjusted EBITDA margin contracted 202 basis points in the quarter to 5.15 percent from 7.17 percent in the last year period.
“The Sprouts team delivered industry leading 15% sales growth for the year and positive same store sales in a year significantly impacted by deflationary pressures,” said Amin Maredia, chief executive officer of Sprouts Farmers Market. “While the environment remains challenging, we remain confident in our business fundamentals, team and long-term growth opportunities for the brand.”
For fiscal year 2017, Sprouts Farmers Market expects revenue to grow in the range of 12 percent to 13 percent and it's projects diluted earnings per share to be in the range of $0.85 to $0.90.
Operating cash flow improves
Sprouts Farmers Market, Inc has generated cash of $254.35 million from operating activities during the year, up 6.02 percent or $14.45 million, when compared with the last year. The company has spent $180.80 million cash to meet investing activities during the year as against cash outgo of $128.31 million in the last year. It has incurred net capital expenditure of $180.31 million on net basis during the year, up 47.07 percent or $57.71 million from year ago.
The company has spent $197.15 million cash to carry out financing activities during the year as against cash outgo of $106.03 million in the last year period.
Cash and cash equivalents stood at $12.46 million as on Jan. 01, 2017, down 90.84 percent or $123.60 million from $136.07 million on Jan. 03, 2016.
Working capital drops significantly
Sprouts Farmers Market, Inc has witnessed a decline in the working capital over the last year. It stood at $4.87 million as at Jan. 01, 2017, down 95.76 percent or $109.92 million from $114.79 million on Jan. 03, 2016. Current ratio was at 1.02 as on Jan. 01, 2017, down from 1.50 on Jan. 03, 2016.
Cash conversion cycle (CCC) was almost stable at 4 days for the quarter, when compared with the last year period. Days sales outstanding were almost stable at 1 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 13 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 10 days for the quarter, when compared with the previous year period.
Debt increases substantially
Sprouts Farmers Market, Inc has witnessed an increase in total debt over the last one year. It stood at $384.74 million as on Jan. 01, 2017, up 32.45 percent or $94.26 million from $290.47 million on Jan. 03, 2016. Total debt was 26.72 percent of total assets as on Jan. 01, 2017, compared with 20.36 percent on Jan. 03, 2016. Debt to equity ratio was at 0.57 as on Jan. 01, 2017, up from 0.35 as on Jan. 03, 2016. Interest coverage ratio deteriorated to 7.93 for the quarter from 12.79 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
