Hi team,

I want to start by acknowledging the incredible work of our team members at stores, DCs, and the support office as we have navigated the crazy environment over the past year. Your dedication to provide our customers with the healthy products they’re looking for continues to drive fantastic results.

Financial Results
Keep in mind we were up against the period from last March when customers rushed the stores to stock up on groceries during the initial days of the pandemic. I know you all remember that time! That was unusual customer behavior no one could have anticipated, and sales soared as a result. Importantly, when you look at our sales on a two-year basis, our net sales were up 11% compared to Q1 2019 and our two-year comparable store sales were up 2.2%.

Our ecommerce sales remain solid, representing 12.5% of total sales, with sales up 221% compared to last year, as customers continue to shop online or through curbside pickup, trends that we are confident will continue going forward. Ultimately, we produced strong financial results with our operating profit up over 40% versus Q1 2019, setting us up to invest in our people, infrastructure, and growing Sprouts across the country.

Our full results can be found here.

Going forward, we’ll build on the success and momentum of 2020 and continue executing our strategy as planned.

Strategy: Winning with our Target Customers

Marketing and Merchandising
Innovation continues to be a top priority at Sprouts. We introduced more than 400 new attribute-based products in Q1. The plant-based trend continues to be strong, as well as the fresh produce we are known for, with produce representing 22% of our business.

As customers begin returning to more regular shopping, we’ll be highlighting new items in innovation centers in our new stores as well as through the “Find a New Favorite” merchandising displays. And we’ll continue to bring in new products to create that treasure hunt shopping experience our target customers enjoy.

While we still have work to do with our brand recognition, we’ve made progress! I’m confident our “Where Goodness Grows” campaign that launched last year online and through TV and radio will begin to come alive through more physical assets like store signage and in the layout of our five new format stores we’ll open this year.

Supply Chain 
We successfully opened our new fresh distribution center in Aurora, Colorado in March. On top of the challenges of a global pandemic, 23 inches of snow fell on Aurora the weekend before the opening, yet the team opened under budget and on time. We were fully supplying our Colorado, Utah, and New Mexico stores within a few weeks, which is a testament to the strength of our team.

The Aurora DC, along with our new Florida DC opening in Q2, will allow us to serve more stores and customers with fresher produce, increase our local and seasonal produce assortments, and support more local farmers. The new DCs will help us fulfill our goal of having our stores within 250 miles of a DC, helping to decrease the number of miles our trucks travel and reduce greenhouse gas emissions, our stores’ shrink, and food waste. All huge wins for customers, for Sprouts, and for the planet!

Unit Growth
Our store growth is on track as we move forward with our plan to open 20 new stores this year, five of which will be in our new store format. We’ll have more to share about this in the coming months. I’m excited that there will be great opportunities for all of us as our business continues to grow.

Sustainability and Community Support
Our environmental impact is increasingly important to our customers and our communities and I’m happy that we’ve made great progress on our journey to improve our sustainability program. Be sure to check out our Environmental, Social, and Governance (ESG) Report we released last month, which includes our highlights for 2020. Some of the progress includes decreasing our carbon footprint by moving from print to digital and diverting waste at a rate of 60%. Additionally, we donated the equivalent of 23 million meals to local food banks in 2020 to help those most in need in our communities.

While there’s still much to do to continue to protect our planet, I am confident we are on the right path! I am proud of all the hard work you’re doing to demonstrate respect for the planet and care for the communities we serve.

Going Forward
We’re still in the early stages of our strategy, but the progress we’re making is admirable. I have confidence in this great brand and our amazing team members, and I know focusing on innovation, driving sales, and taking care of our customers will continue to prove successful.

Hello Team,

2020 was a year like no other and Sprouts emerged stronger than ever. On behalf of the entire leadership team, thank you for your tireless work serving our customers and our communities. Your dedication throughout 2020 ensured our customers had access to healthy food to feed their families through challenging times while placing us on an even stronger foundation for future success.

Our Performance
We had a fantastic 2020! Our results are as follows: net sales grew 15% to $6.5 billion, and we had comparable-store sales of 6.9%, compared to 2019. Clearly, we have had some tailwinds from COVID, however, executing our strategic initiatives at a more rapid pace than we originally planned is fueling these encouraging results and establishing a solid base from which we can invest and grow.

For the fourth quarter 2020, our net sales grew 17% to $1.6 billion, and comparable-store sales were up 3.7%, compared to the same period last year.

Our shift from print to digital marketing advertising during the year not only had a positive environmental impact by averting 60,000 metric tons of carbon dioxide, it helped draw customers to shop.sprouts.com and continues to gain traction as we meet our customer in whatever way they like to shop, whether in-store, pick-up, or through home delivery. As a result, e-commerce sales remain strong, growing nearly 15% of our total sales, up more than 290% compared to last year.

Your efforts encouraging customers to sign up for the Sprouts app through the Sign-Up Showdown Contest increased downloading of the app by nearly 60% and helped grow our customer database, which will allow us to better share our great brand with more people.

Maintaining a healthy lifestyle is critical for our target customers, now more than ever, and this resulted in a 45% increase in alternative meat sales from brands like Beyond Meat, Impossible, and Daring—a trend that is likely to continue going forward. We saw customers putting more in their basket with strong trends through the year in frozen, dairy, meat, bakery, and grocery.

Innovation remains a top priority at Sprouts, as we position ourselves to be the leader for carrying and developing new natural and organic products. We successfully highlighted our own products during the holidays like pumpkin spice almond butter and dark coco kettle corn. Overall, 2020 brought more than 5,100 new brand and private label items that contributed more than 35% of our sales growth.

Looking Forward
This year, we will continue to deliver on our strategy of evolving our marketing program to increase our brand awareness, opening new stores to bring healthy food to more communities, and opening two new fresh distribution centers to bring fresher produce to our customers.

The marketing campaign that we launched last August continues to be a focus as we aim to increase brand awareness and reach more of our target customer base. Our focus on digital-driven communications will help us maximize customer data and reach our target customer.

We plan to open approximately 20 new stores, some of which will be in our new format with a smaller footprint of 25,000 square feet or less. We’ll continue highlighting our open layout and farmers market experience with produce at the center of the store, while providing expanded departments meaningful to our target customers, new signage to draw attention to our differentiated products, and an in-store innovation center.

We’re adding two new fresh DCs in Colorado and Florida, getting us closer to our goal of having our stores within 250 miles of our DCs, reducing the distance our produce travels to get to our shelves to keep our produce as fresh as possible and reduce greenhouse gas emissions. Local DCs also help us reach our goal to expand the selection of unique seasonal produce and offer more local produce offerings.

We’ve made great strides in our strategy, and while we still have much to do, 2021 is off to a great start. I am excited about all that we are building on this great brand!

Thank you all again, and please take care of yourselves and take care of your families.

Hello Team,

I want to start by saying thank you for your efforts to serve our customers and remind you how much you mean to Sprouts and to the communities we serve. I’m proud of how far we’ve come this year and inspired by how well you’ve adapted to changes. Above all, I want to thank you for your hard work during this pandemic and for your service to the community. The entire leadership team remains focused on the health and wellbeing of our team members and our customers.

Third Quarter Results & Updates
Our results are as follows: net sales grew 9.5% to $1.6 billion and comparable store sales were up 4.2%, compared to the same period last year. Our ecommerce business grew 337%, outpacing most ecommerce growth rates in the industry. In fact, we ended the quarter with ecommerce representing 11% of our sales!

In the third quarter, we launched delivery and curbside pickup through shop.sprouts.com so customers can order directly from Sprouts, either through our website or the Sprouts app. While this service utilizes Instacart order management technology, this improvement keeps the customer in the Sprouts ecosystem, which allows us to gain customer insights and does not require the customer to have an Instacart account to place an order, creating a more seamless experience.

In August, we launched new branding through TV, social, digital and radio under the campaign: Sprouts, Where Goodness Grows. The campaign, which includes our first mainstream commercial, drives home our farmers market experience by highlighting produce, the heart of our store. To date, the new brand has been well received.

Looking Forward
Innovation is what will help move our business forward. Our non-perishable departments, like Grocery and Frozen, are really resonating with our customers. In 2020, we’ve launched more than 3,500 new and unique products, focused purely on innovation and taste. We’re working through a deep dive of all our categories to understand the needs and wants of our target customers and ensure we can bring even more new, innovative offerings to our customers in every department.

Our produce business is also a differentiator for Sprouts. We’ll continue to have attractive everyday prices, supported by meaningful deals through great sourcing practices and relationships. The addition of our two new DCs in Colorado and Florida in 2021 will allow us to take advantage of local and seasonal buying not available today and will produce a better presentation to our customers with fresher product.

In the first few months of 2020, we were focused on executing our 5-year strategy of becoming a highly profitable, differentiated specialty grocer with a long growth runway. Overall, the COVID-19 environment has allowed us to fast-forward our strategic plan. We pivoted quickly to eliminate all print ads and moved our marketing to digital channels. These changes, along with shrink benefits, have helped us achieve many structural and sustainable improvements—and we couldn’t have done it without team members like you. While we still have plenty of work to do to realize our 5-year vision, I am more convinced than ever of our potential, and I’m excited for the opportunity and the growth we have ahead of us. What we have accomplished so far in our strategy is just the beginning of all the great work—and results—to come.

As we approach the holidays, I want to thank each and every one of you for the important part you play in the success of our business. This year has been challenging, and I’m so proud of the Sprouts team. I have high hopes this will be a great holiday season!

Thanks for all you do and stay safe,
Jack

Hello Team,

I want to express my thanks to each and every one of you who have worked so hard during the challenges this year has presented so far. What I’ve seen from our team is a true demonstration of the Sprouts culture, rooted in respect, inclusion and caring for one another. This culture shines through in everything you do for our customers and for each other. You’ve all adapted to a new way of operating and you remain Everyday Heroes as you serve our customers and our communities, ensuring they have healthy food for their families.

Our second quarter results are in large part due to our team members on the front-line. The entire leadership team remain focused on continuing to support you with enhanced compensation and a safe environment to work.

Second Quarter Results
Our results are as follows: net sales grew 16% to $1.6 billion and comparable store sales were up 9.1%, compared to the same period last year. Sales for the second quarter were very strong, as the demand from COVID-19 continues to favorably impact the grocery industry. Customers continued to consolidate trips to avoid social contact, which resulted in a reduction in traffic but with increased basket size.

As the country continues to practice social distancing, our positive ecommerce trends have remained elevated, up more than 500% from last year in the second quarter. Our rollout of pickup services to all our stores was successfully implemented by early May and grew rapidly throughout the quarter.

Looking Forward
As I mentioned last quarter, our strategy work has already begun and we are continuing to identify and deepen our understanding of our target customer, refine our promotional strategy and marketing approach, and accelerate our ecommerce business. Starting in June, we began to vastly adapt our marketing spend to focus on more digital, social, radio and for the first time, TV, allowing us to target our core customers. This pivot has led to an increase greater than 1,800% across all our digital impressions. Our messaging and promotions are evolving as well to become less about price and more around storytelling. The products we carry are unique and our marketing stories will bring them to life! We’re reaching more customers and this new media strategy will continue to evolve.

From an operations standpoint, we continue to evolve and improve as a company. We’ve already begun to experience shrink improvements from the implementation of Fresh Item Management. For the first time, the Meat Department had a clear line of sight for how to reduce over-production and what products really are the best sellers from an overall cost perspective. Reducing the complexity of stores, merchandising appropriately with the right number of SKUs, and minor fixture changes will result in further savings in the years to come.

The future at Sprouts remains bright, and I look forward to continued improvement as we scale and grow our business together. I want to thank you all again for the work you’re doing to support each other and our communities, from the stores to the distribution centers to the support office. Every role is critical to the success of our business. I’m proud to be part of this Sprouts family and we will all get through this together.

Thank you all again, and please take care of yourselves and take care of your families.

Q2 2020 Fact Sheet
Click here or on the image below to view the Q2 2020 Fact Sheet.

Hello Team,

I want to thank all of you for your efforts to serve our customers and remind you how much you mean to Sprouts and to the communities we serve. Food is critical to America’s survival, and this crisis has shone a bright light on the critical role you all play. It takes a community of dedicated individuals to keep our stores running smoothly during challenging times.

First Quarter Results
The first two months of the quarter were ahead of our 2020 budget due to the changes made in how we promote, price and source, focusing more on differentiation and less on competitor pricing. The environment shifted dramatically in early March with a substantial increase in the demand for food, resulting in additional sales as customers opted for healthier foods, and focused on eating out less and filling up their pantries.

Our results are as follows: we announced net sales of $1.6 billion, up 16% from Q1 2019. Comparable store sales increased 10.6% and online sales were up more than 160%. Stay-at-home orders and social distancing meant customers were cooking more at home, limiting the number of trips to the grocery store by purchasing online and putting more items in their basket each trip.  We will use our learnings from this altered consumer behavior along with our strategy work to continue to successfully implement positive changes in our business. We believe the shifts in customer behavior bode well for us long term.

Looking Forward
Though it’s important we continue to focus on the constantly evolving situation at hand, COVID-19 has provided us the opportunity to create and capture awareness of our brand and capture new customer loyalty. Much of our strategy work has already begun and we will continue to identify and deepen our understanding of our target customer, refine our brand and marketing approach, and accelerate our ecommerce business. We will also focus on additional strategic pillars to move our business forward. We’ll update our store format and prioritize expansion in select markets, and we’ll improve our supply chain to ensure the food delivered to stores is as fresh as possible.

Our future stores will be smaller, with a footprint of 21,000 to 25,000 square feet, and they will be less expensive to build and maintain. We will not eliminate any category and the farmers market feel will remain, all in a smaller, more affordable space. We’ll create a larger concentration of stores, expanding into markets where our target customers live, and where our current and future DCs will be located with the intent of no store being outside of a 250-mile radius of a DC. The fresh produce we offer will truly be the freshest, traveling shorter distances from farm to DC to store. We’re confident that these focus areas along with other work that is already underway will allow us to deliver future earnings growth through the completion of these strategies.

I’m humbled by the team’s response to this crisis, from the stores to the distribution centers to the support office. I am very proud of the quick and decisive actions we took to ensure our stores remained open to serve our communities; it is a testament to the strong values of all our team members. I’m excited about the future as we implement our long-term strategy to build on this great brand that is good for you, good for your family, and good for the planet.

Thank you all again, and please take care of yourselves and take care of your families.

Dear Team,

Across the country we’re experiencing extraordinary demand for our products and an extremely heavy workload for our team members. The dedication you are showing in support of one another, our customers, and our communities is exceptional. What you do matters, especially now, and I thank you for your continued support.

Thank you for your service,

Jack Sinclair,
Chief Executive Officer