To: Paul Senior who wrote (78044 ) 12/15/2025 11:20:52 AM From: E_K_S Read Replies (2) | Respond to Re: Sprouts Farmers Market (SFM) 80.67 +1.13 (+1.42%) FCF Growth: The average Free Cash Flow per Share Growth Rate has been strong, with a 3-year average of 21.9% per year.New Stores as Growth Driver: Management is committed to achieving 10% annual unit growth (new store openings) by 2027. They planned to open 37 new stores in 2025.The new stores use a smaller, more efficient format which is designed to de-risk growth and deliver stronger returns on invested capital (ROIC) . The new stores are contributing to the overall net sales growth. Profitability: The business model exhibits high profitability metrics, including a trailing twelve-month (TTM) Gross Profit Margin of around 38.9% and a high Return on Equity (ROE) of over 38%. The combination of FCF generation, high-ROIC new stores, and an aggressive share repurchase program suggests a strategy for compounding EPS growth . Strategic ShiftSFM has pivoted away from its legacy 30,000 to 32,000 sq. ft. format to a more efficient 20,000 to 25,000 sq. ft. prototype.Cost Efficiency: The smaller stores are 20% less expensive to build (partially due to reduced costs for deli and protein fixtures) and 20% less expensive to operate (due to lower rent and labor costs, including the addition of self-checkout).
