Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 28, 2015 | Aug. 04, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 28, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | SFM | |
Entity Registrant Name | SPROUTS FARMERS MARKET, INC. | |
Entity Central Index Key | 1,575,515 | |
Current Fiscal Year End Date | --01-03 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 153,579,559 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 28, 2015 | Dec. 28, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 97,258 | $ 130,513 |
Accounts receivable, net | 18,722 | 14,091 |
Inventories | 158,179 | 142,793 |
Prepaid expenses and other current assets | 9,035 | 11,152 |
Deferred income tax asset | 34,898 | 35,580 |
Total current assets | 318,092 | 334,129 |
Property and equipment, net of accumulated depreciation | 474,949 | 454,889 |
Intangible assets, net of accumulated amortization | 193,530 | 194,176 |
Goodwill | 368,078 | 368,078 |
Other assets | 24,654 | 17,801 |
Total assets | 1,379,303 | 1,369,073 |
Current liabilities: | ||
Accounts payable | 138,032 | 112,877 |
Accrued salaries and benefits | 21,994 | 29,687 |
Other accrued liabilities | 39,348 | 41,394 |
Current portion of capital and financing lease obligations | 9,442 | 29,136 |
Current portion of long-term debt | 7,746 | |
Total current liabilities | 208,816 | 220,840 |
Long-term capital and financing lease obligations | 119,271 | 121,562 |
Long-term debt | 160,000 | 248,611 |
Other long-term liabilities | 89,804 | 74,071 |
Deferred income tax liability | 19,538 | 18,600 |
Total liabilities | $ 597,429 | $ 683,684 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Undesignated preferred stock; $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.001 par value; 200,000,000 shares authorized, 153,565,809 and 151,833,334 shares issued and outstanding, June 28, 2015 and December 28, 2014, respectively | $ 154 | $ 152 |
Additional paid-in capital | 570,742 | 543,048 |
Retained earnings | 210,978 | 142,189 |
Total stockholders' equity | 781,874 | 685,389 |
Total liabilities and stockholders' equity | $ 1,379,303 | $ 1,369,073 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 28, 2015 | Dec. 28, 2014 |
Statement of Financial Position [Abstract] | ||
Undesignated preferred stock, par value | $ 0.001 | $ 0.001 |
Undesignated preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Undesignated preferred stock, shares issued | 0 | 0 |
Undesignated preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 153,565,809 | 151,833,334 |
Common stock, shares outstanding | 153,565,809 | 151,833,334 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2015 | Jun. 29, 2014 | Jun. 28, 2015 | Jun. 29, 2014 | |
Income Statement [Abstract] | ||||
Net sales | $ 902,153 | $ 743,810 | $ 1,759,659 | $ 1,466,416 |
Cost of sales, buying and occupancy | 638,514 | 519,762 | 1,238,227 | 1,018,509 |
Gross profit | 263,639 | 224,048 | 521,432 | 447,907 |
Direct store expenses | 177,381 | 143,155 | 340,571 | 281,386 |
Selling, general and administrative expenses | 23,390 | 23,100 | 47,417 | 45,579 |
Store pre-opening costs | 2,507 | 2,420 | 5,280 | 3,367 |
Store closure and exit costs | 315 | (200) | 1,544 | 333 |
Income from operations | 60,046 | 55,573 | 126,620 | 117,242 |
Interest expense | (4,437) | (6,520) | (10,305) | (12,987) |
Other income | 112 | 100 | 174 | 196 |
Loss on extinguishment of debt | (5,481) | (5,481) | ||
Income before income taxes | 50,240 | 49,153 | 111,008 | 104,451 |
Income tax provision | (18,918) | (19,002) | (42,219) | (40,567) |
Net income | $ 31,322 | $ 30,151 | $ 68,789 | $ 63,884 |
Net income per share: | ||||
Basic | $ 0.20 | $ 0.20 | $ 0.45 | $ 0.43 |
Diluted | $ 0.20 | $ 0.20 | $ 0.44 | $ 0.42 |
Weighted average shares outstanding: | ||||
Basic | 153,393 | 149,681 | 152,814 | 148,720 |
Diluted | 155,949 | 154,039 | 155,728 | 153,670 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid In Capital [Member] | Retained Earnings [Member] |
Beginning Balance at Dec. 29, 2013 | $ 513,771 | $ 147 | $ 479,127 | $ 34,497 |
Beginning Balance, Shares at Dec. 29, 2013 | 147,616,560 | |||
Net income | 107,692 | 107,692 | ||
Issuance of shares under option plans | 11,312 | $ 5 | 11,307 | |
Issuance of shares under option plans, Shares | 4,216,774 | |||
Excess income tax benefit for exercise of options | 47,261 | 47,261 | ||
Tax effect of forfeiture of vested options in equity | (2) | (2) | ||
Equity-based compensation | 5,355 | 5,355 | ||
Ending Balance at Dec. 28, 2014 | 685,389 | $ 152 | 543,048 | 142,189 |
Ending Balance, Shares at Dec. 28, 2014 | 151,833,334 | |||
Net income | 68,789 | 68,789 | ||
Issuance of shares under option plans | 5,974 | $ 2 | 5,972 | |
Issuance of shares under option plans, Shares | 1,732,475 | |||
Excess income tax benefit for exercise of options | 19,288 | 19,288 | ||
Equity-based compensation | 2,434 | 2,434 | ||
Ending Balance at Jun. 28, 2015 | $ 781,874 | $ 154 | $ 570,742 | $ 210,978 |
Ending Balance, Shares at Jun. 28, 2015 | 153,565,809 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 28, 2015 | Jun. 29, 2014 | |
Cash flows from operating activities | ||
Net income | $ 68,789 | $ 63,884 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 32,816 | 26,071 |
Accretion of asset retirement obligation and closed facility reserve | 178 | 83 |
Amortization of financing fees and debt issuance costs | 501 | 785 |
Loss on disposal of property and equipment | 405 | 994 |
Equity-based compensation | 2,434 | 2,995 |
Loss on extinguishment of debt | 5,481 | |
Deferred income taxes | 1,620 | 11,025 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,874) | (1,860) |
Inventories | (15,386) | (16,399) |
Prepaid expenses and other current assets | 2,220 | 5,524 |
Other assets | (6,149) | (636) |
Accounts payable | 26,527 | 34,012 |
Accrued salaries and benefits | (7,694) | 859 |
Other accrued liabilities and income taxes payable | (2,079) | 594 |
Other long-term liabilities | 16,151 | 9,958 |
Net cash provided by operating activities | 120,940 | 137,889 |
Cash flows from investing activities | ||
Purchases of property and equipment | (74,541) | (57,793) |
Proceeds from sale of property and equipment | 2 | 115 |
Net cash used in investing activities | (74,539) | (57,678) |
Cash flows from financing activities | ||
Proceeds from revolving credit facility | 260,000 | |
Payments on revolving credit facility | (100,000) | |
Payments on term loan | (261,250) | (3,500) |
Payments on capital lease obligations | (316) | (244) |
Payments on financing lease obligations | (1,700) | (1,423) |
Payments of deferred financing costs | (1,896) | |
Cash from landlord related to financing lease obligations | 577 | |
Excess tax benefit for exercise of stock options | 19,288 | 26,214 |
Proceeds from the exercise of stock options | 6,218 | 4,786 |
Net cash (used in) provided by financing activities | (79,656) | 26,410 |
Net (decrease) increase in cash and cash equivalents | (33,255) | 106,621 |
Cash and cash equivalents at beginning of the period | 130,513 | 77,652 |
Cash and cash equivalents at the end of the period | 97,258 | 184,273 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 10,575 | 12,183 |
Cash paid for income taxes | 19,058 | 531 |
Supplemental disclosure of non-cash investing and financing activities | ||
Property and equipment in accounts payable | 12,662 | 21,969 |
Property acquired through capital and financing lease obligations | $ 5,373 | $ 5,746 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 28, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation Sprouts Farmers Market, Inc., a Delaware corporation, through its subsidiaries, operates as a healthy grocery store that offers fresh, natural and organic food that includes fresh produce, bulk foods, vitamins and supplements, grocery, meat and seafood, bakery, dairy, frozen foods, body care and natural household items catering to consumers’ growing interest in eating and living healthier. The “Company” is used to refer collectively to Sprouts Farmers Market, Inc. and unless the context otherwise requires, its subsidiaries. The accompanying unaudited consolidated financial statements include the accounts of the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission in instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the periods indicated. All material intercompany accounts and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results for any other interim period or for a full fiscal year. The information included in these consolidated financial statements and notes thereto should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included herein and Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto for the fiscal year ended December 28, 2014 included in the Company’s Annual Report on Form 10-K, filed on February 26, 2015. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The Company reports its results of operations on a 52- or 53-week fiscal calendar ending on the Sunday closest to December 31. Fiscal year 2015 is a 53-week year, and Fiscal year 2014 was a 52-week year. The Company reports its results of operations on a 13-week quarter, except for 53-week fiscal years. The fourth quarter of fiscal 2015 will include 14 weeks. The Company has one reportable and one operating segment. The Company’s business is subject to modest seasonality. Average weekly sales fluctuate throughout the year and are typically highest in the first half of the fiscal year. Produce, which contributed 25% of the Company’s net sales for the twenty-six weeks ended June 28, 2015, is generally more available in the first six months of the fiscal year due to the timing of peak growing seasons. During thirteen weeks ended June 28, 2015, the Company obtained sufficient historical redemption data for its gift card program to make a reasonable estimate of the ultimate redemption patterns and breakage rate. Accordingly, the Company recognized $0.8 million of gift card breakage income as a component of net sales in the accompanying Consolidated Statements of Operations for the thirteen and twenty-six weeks ended June 28, 2015. All dollar amounts are in thousands, unless otherwise noted. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Jun. 28, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | 2. Recently Issued Accounting Pronouncements In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU No. 2014-08 amends previous guidance related to the criteria for reporting a disposal as a discontinued operation by elevating the threshold for qualification for discontinued operations treatment to a disposal that represents a strategic shift that has a major effect on an organization’s operations or financial results. This guidance also requires expanded disclosures for transactions that qualify as a discontinued operation and requires disclosure of individually significant components that are disposed of or held for sale but do not qualify for discontinued operations reporting. This guidance is effective prospectively for all disposals or components initially classified as held for sale in periods beginning on or after December 15, 2014, with early adoption permitted. The Company’s adoption of this guidance did not have a material effect on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU No. 2014-09 provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. These may include identifying performance obligations in the contract, and estimating the amount of variable consideration to include in the transaction price attributable to each separate performance obligation. This guidance will be effective for the Company for its fiscal year 2017. The FASB recently announced a proposal to defer the effective date of this guidance by one year, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance. In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU No. 2014-15 requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. This guidance will be effective for the Company for its fiscal year 2017, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU No. 2015-03 requires an entity to present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. This guidance will be effective for the Company for its fiscal year 2017. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently evaluating the potential impact of this guidance. In April 2015, the FASB issued ASU No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” ASU No. 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. This guidance will be effective for the Company for its fiscal year 2016. Early adoption is permitted. The amendment may be adopted either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. The Company is currently evaluating the potential impact of this guidance. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 28, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. 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, indefinite-lived intangible assets, long-lived assets and in the valuation of store closure and exit costs. The determination of fair values of certain tangible and intangible assets for purposes of the Company’s goodwill impairment evaluation as described above was based upon a step zero assessment. Closed facility reserves are recorded at net present value to approximate fair value which is classified as Level 3 in the hierarchy. The estimated fair value of the closed facility reserve is calculated based on the present value of the remaining lease payments and other charges using a weighted average cost of capital, reduced by estimated sublease rentals. The weighted average cost of capital was estimated using information from comparable companies and management’s judgment related to the risk associated with the operations of the stores. Cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued salaries and benefits and other accrued liabilities approximate fair value because of the short maturity of those instruments. Based on open market transactions comparable to the Term Loan (as defined in Note 6, “Long-Term Debt”), the fair value of the long-term debt, including current maturities, approximates carrying value as of June 28, 2015 and December 28, 2014. The Company’s estimates of the fair value of long-term debt (including current maturities) were classified as Level 2 in the fair value hierarchy. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 28, 2015 | |
Receivables [Abstract] | |
Accounts Receivable | 4. Accounts Receivable A summary of accounts receivable is as follows: As Of June 28, 2015 December 28, Vendor $ 10,898 $ 8,246 Receivables from landlords 4,945 1,993 Other 2,879 3,852 Total $ 18,722 $ 14,091 The Company had recorded allowances for certain vendor receivables of $0.2 million and $0.3 million at June 28, 2015 and December 28, 2014, respectively. Other receivables at December 28, 2014 include amounts receivable for payroll taxes and exercise prices for options exercised but for which the cash was not received by the balance sheet date. |
Accrued Salaries and Benefits
Accrued Salaries and Benefits | 6 Months Ended |
Jun. 28, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Salaries and Benefits | 5. Accrued Salaries and Benefits A summary of accrued salaries and benefits is as follows: As Of June 28, 2015 December 28, 2014 Accrued payroll $ 9,324 $ 9,196 Vacation 8,877 7,476 Bonus 3,097 12,138 Other 696 877 Total $ 21,994 $ 29,687 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 28, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 6. Long-Term Debt A summary of long-term debt is as follows: As Of Facility Maturity Interest Rate June 28, 2015 December 28, 2014 Senior secured debt $450.0 million Revolving Credit Facility April 17, 2020 Variable $ 160,000 $ — Former Term Loan, net of original issue discount April 23, 2020 Variable — $ 256,357 Former Revolving Credit Facility April 23, 2018 Variable — — Total debt 160,000 256,357 Less current portion — (7,746 ) Long-term debt, net of current portion $ 160,000 $ 248,611 Current portion of long-term debt is presented net of issue discount of $1.0 million as of December 28, 2014. The non-current portion of long-term debt is presented net of issue discount of $3.9 million as of December 28, 2014. Senior Secured Revolving Credit Facility April 2015 Refinancing On April 17, 2015, the Company’s subsidiary, Sprouts Farmers Markets Holdings, LLC (“Intermediate Holdings”), as borrower, entered into a credit agreement (the “Credit Agreement”) to replace the Former Revolving Credit Facility and Former Term Loan (each as defined below). The Credit Agreement provides for a revolving credit facility with an initial aggregate commitment of $450.0 million (the “Credit Facility”), which may be increased from time to time pursuant to an expansion feature set forth in the Credit Agreement. Concurrently with the closing of the Credit Agreement, the Company borrowed $260.0 million to pay off its existing $257.8 million Former Term Loan (the “April 2015 Refinancing”), and to terminate all commitments under its existing senior secured credit facility, dated April 23, 2013 (the “Former Credit Facility”) and to pay transaction costs related to the refinancing. Such repayment resulted in a $5.5 million loss on extinguishment of debt due to the write-off of deferred financing costs and original issue discount. No amounts were outstanding under the Former Revolving Credit Facility on April 17, 2015. The remaining proceeds of loans made under the Credit Facility were used for general corporate purposes. The Company capitalized debt issuance costs of $2.3 million related to the Credit Facility, which are being amortized on a straight-line basis to interest expense over the five-year term of the Credit Facility. The Credit Agreement also provides for a letter of credit subfacility and a $15.0 million swingline facility. Letters of credit issued under the Credit Agreement reduce the borrowing capacity of the Credit Facility. Letters of credit totaling $2.5 million have been issued as of June 28, 2015 primarily to support the Company’s insurance programs. Guarantees Obligations under the Credit Facility are guaranteed by the Company and all of its current and future wholly owned material domestic subsidiaries, and are secured by first-priority security interests in substantially all of the assets of the Company and its subsidiary guarantors, including, without limitation, a pledge by the Company of its equity interest in Intermediate Holdings. Interest and Fees Loans under the Credit Facility will initially bear interest, at the Company’s option, either at adjusted LIBOR plus 1.75% per annum, or a base rate plus 0.75% per annum. The interest rate margins are subject to adjustment pursuant to a pricing grid based on the Company’s total gross leverage ratio, as defined in the Credit Agreement. Under the terms of the Credit Agreement, the Company is obligated to pay a commitment fee on the available unused amount of the Credit Facility commitments equal to 0.25% per annum. Outstanding letters of credit under the Credit Facility are subject to a participation fee of 1.75% per annum and an issuance fee of 0.125% per annum. Payments and Prepayments The Credit Facility is scheduled to mature, and the commitments thereunder will terminate on April 17, 2020, subject to extensions as set forth the in the Credit Agreement. The Company may repay loans and reduce commitments under the Credit Agreement at any time in agreed-upon minimum principal amounts, without premium or penalty (except LIBOR breakage costs, if applicable). Following the closing of the Credit Facility and the initial borrowing of $260.0 million, the Company made a total of $100.0 million of principal payments on the Credit Facility, which reduced the Company’s total outstanding debt to $160.0 million at June 28, 2015. Covenants The Credit Agreement contains financial, affirmative and negative covenants. The negative covenants include, among other things, limitations on the Company’s ability to: • incur additional indebtedness; • grant additional liens; • enter into sale-leaseback transactions; • make loans or investments; • merge, consolidate or enter into acquisitions; • pay dividends or distributions; • enter into transactions with affiliates; • enter into new lines of business; • modify the terms of debt or other material agreements; and • change its fiscal year Each of these covenants is subject to customary and other agreed-upon exceptions. In addition, the Credit Agreement requires that the Company and its subsidiaries maintain a maximum total net leverage ratio not to exceed 3.00 to 1.00 and minimum interest coverage ratio not to be less than 1.75 to 1.00. Each of these covenants is tested on the last day of each fiscal quarter, starting with the fiscal quarter ending June 28, 2015. The Company was in compliance with all applicable covenants under the Credit Agreement as of June 28, 2015. Former Credit Facility On April 23, 2013, Intermediate Holdings, as borrower, refinanced (the “April 2013 Refinancing”) its prior revolving credit facility and prior term loan, by entering into the Former Credit Facility. The Former Credit Facility provided for a $700.0 million term loan (the “Former Term Loan”) and a $60.0 million senior secured revolving credit facility (the “Former Revolving Credit Facility”). The Former Term Loan, with a maturity date in April 2020, required quarterly principal payments, in an aggregate amount equal to 1.00% of the original principal balance, with the balance due on the final maturity date. All amounts outstanding under the Former Term Loan bore interest, at the Company’s option, at a rate per annum equal to LIBOR (with a 1.00% floor with respect to Eurodollar borrowings under the Term Loan), adjusted for statutory reserves, plus a margin equal to 3.00%, or an alternate base rate, plus a margin equal to 2.00%, as set forth in the Former Credit Facility. The Former Credit Facility included the $60.0 million Former Revolving Credit Facility with a maturity date in April 2018. The Former Revolving Credit Facility included letter of credit and $5.0 million swingline loan subfacilities. Letters of credit issued under the Former Revolving Credit Facility reduced the borrowing capacity on the Former Credit Facility. Interest terms on the Former Revolving Credit Facility were the same as the Former Term Loan. The Company capitalized debt issuance costs of $1.1 million related to the Former Revolving Credit Facility, which were being amortized to interest expense over the term of the Former Revolving Credit Facility. Under the terms of the Former Credit Facility, the Company was obligated to pay a commitment fee on the available unused amount of the Former Revolving Credit Facility commitments equal to 0.50% per annum. |
Closed Facility Reserves
Closed Facility Reserves | 6 Months Ended |
Jun. 28, 2015 | |
Restructuring and Related Activities [Abstract] | |
Closed Facility Reserves | 7. Closed Facility Reserves The following is a summary of closed facility reserve activity during the twenty-six weeks ended June 28, 2015 and fiscal year ended December 28, 2014: June 28, December 28, Beginning balance $ 1,785 $ 4,713 Additions 1,144 688 Usage (658 ) (3,204 ) Adjustments 272 (412 ) Ending balance $ 2,543 $ 1,785 Additions made during 2015 include remaining lease payments for the corporate support office relocation, and usage during 2015 primarily related to lease payments made during the period for closed stores. Additions made during 2014 related to the closure and relocation of one store and to the closure and relocation of the Texas warehouse, and usage during 2014 related to lease payments made during the period for closed stores. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 28, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The Company’s effective tax rate for the thirteen weeks ended June 28, 2015 and June 29, 2014 was 37.7% and 38.7%, respectively. The primary reasons for the decrease in the effective tax rate were an increase in the enhanced deduction for charitable donations of food inventory and a decrease in the effective state income tax rate. The Company’s effective tax rate for the twenty-six weeks ended June 28, 2015 and June 29, 2014 was 38.0% and 38.8%, respectively. The primary reasons for the decrease in the effective tax rate were an increase in the enhanced deduction for charitable donations of food inventory and a decrease in the effective state income tax rate. Excess tax benefits associated with stock option exercises are credited to stockholders’ equity. The Company uses the tax law ordering approach of intraperiod allocation to allocate the benefit of windfall tax benefits based on provisions in the tax law that identify the sequence in which those amounts are utilized for tax purposes. The income tax benefits resulting from stock awards that were credited to stockholders’ equity were $19.3 million for the twenty-six weeks ended June 28, 2015, which included $0.1 million of income tax benefits related to stock award activity prior to 2015. The excess tax benefits are not credited to stockholders’ equity until the deduction reduces income taxes payable. |
Related-Party Transactions
Related-Party Transactions | 6 Months Ended |
Jun. 28, 2015 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 9. Related-Party Transactions Two stockholders, including a member of the Company’s board of directors, are investors in a company that is a supplier of coffee to the Company. During the thirteen weeks ended June 28, 2015 and June 29, 2014, purchases from this company were $2.5 million and $1.8 million, respectively. During the twenty-six weeks ended June 28, 2015 and June 29, 2014, purchases from this company were $4.8 million and $3.8 million, respectively. At both June 28, 2015 and June 29, 2014, the Company had recorded accounts payable due to this vendor of $0.7 million. One of our senior executives purchased stock in a technology supplier to the Company in January 2015 and provided a loan to this company in May 2015. During the thirteen weeks ended June 28, 2015 and June 29, 2014, purchases from this company were $1.8 million and $2.0 million, respectively. During the twenty-six weeks ended June 28, 2015 and June 29, 2014, purchases from this company were $3.1 million and $2.9 million, respectively. At June 28, 2015 and June 29, 2014, the Company had recorded accounts payable due to this vendor of $0.2 million and $0.3 million respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 28, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. 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 Company’s stakeholders. The Company’s primary contingencies are associated with self-insurance obligations. Self-insurance liabilities require significant judgment and actual claim settlements and associated expenses may differ from the Company’s current provisions for loss. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 28, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | 11. Stockholders’ Equity Secondary Offering On March 10, 2015, certain of the Company’s stockholders completed a secondary public offering of 15,847,800 shares of common stock (the “March Secondary Offering”). The Company did not sell any shares in or receive any proceeds of the March Secondary Offering. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jun. 28, 2015 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 12. Net Income Per Share The computation of net income per share is based on the number of weighted average shares outstanding during the period. The computation of diluted net income per share includes the dilutive effect of share equivalents consisting of incremental shares deemed outstanding from the assumed exercise of options, assumed vesting of restricted stock units (“RSUs”) and assumed vesting of performance stock awards (“PSAs”). A reconciliation of the numerators and denominators of the basic and diluted net income per share calculations is as follows (in thousands, except per share amounts): Thirteen Weeks Ended Twenty-Six Weeks Ended June 28, 2015 June 29, 2014 June 28, 2015 June 29, 2014 Basic net income per share: Net income $ 31,322 $ 30,151 $ 68,789 $ 63,884 Weighted average shares outstanding 153,393 149,681 152,814 148,720 Basic net income per share $ 0.20 $ 0.20 $ 0.45 $ 0.43 Diluted net income per share: Net income $ 31,322 $ 30,151 $ 68,789 $ 63,884 Weighted average shares outstanding 153,393 149,681 152,814 148,720 Dilutive effect of equity-based awards: Assumed exercise of options to purchase shares 2,552 4,358 2,884 4,950 Restricted stock units 4 — 30 — Weighted average shares and equivalent shares outstanding 155,949 154,039 155,728 153,670 Diluted net income per share $ 0.20 $ 0.20 $ 0.44 $ 0.42 For the thirteen weeks ended June 28, 2015 the computation of diluted net income per share does not include 0.8 million options as those options would have been antidilutive or were unvested performance-based options, 0.1 million RSUs as those RSUs would have been antidilutive and 0.1 million for PSAs. For the thirteen weeks ended June 29, 2014, the computation of diluted net income per share does not include 1.0 million options, as those options would have been antidilutive or were unvested performance-based options and does not include 0.1 million for RSUs as those RSUs would have been antidilutive. For the twenty-six weeks ended June 28, 2015 the computation of diluted net income per share does not include 0.8 million options as those options would have been antidilutive or were unvested performance-based options and 0.1 million for PSAs. For the twenty-six weeks ended June 29, 2014, the computation of diluted net income per share does not include 1.0 million options, as those options would have been antidilutive or were unvested performance-based options and does not include 0.1 million for RSUs as those RSUs would have been antidilutive. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 28, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | 13. Equity-Based Compensation 2013 Incentive Plan The Company’s board of directors adopted, and its equity holders approved, the Sprouts Farmers Market, Inc. 2013 Incentive Plan (the “2013 Incentive Plan”). The 2013 Incentive Plan became effective July 31, 2013 in connection with the Company’s IPO and replaced the Sprouts Farmers Markets, LLC Option Plan (the “2011 Option Plan”) (except with respect to outstanding options to acquire shares under the 2011 Option Plan). The 2013 Incentive Plan and 2011 Option Plan are collectively referred to as the “Option Plans”. The 2013 Incentive Plan serves as the umbrella plan for the Company’s stock-based and cash-based incentive compensation programs for its directors, officers and other team members. On May 1, 2015, the Company’s stockholders approved the material terms of the performance goals under the 2013 Incentive Plan for purposes of Section 162(m) of the Internal Revenue Code. On March 11, 2015, under the 2013 Incentive Plan, the Company granted to certain officers and team members time-based options to purchase an aggregate of 277,833 shares of common stock at an exercise price of $34.33 per share, with a grant date fair value of $9.42 per share. The Company also granted an aggregate of 87,394 RSUs with a grant date fair value of $34.33, and 71,753 PSAs (as described below) with a grant date fair value of $34.33. On May 21, 2015, under the 2013 Incentive Plan, the Company granted to independent members of its board of directors time-based options to purchase an aggregate of 14,492 shares of common stock at an exercise price of $30.30 per share, with a grant date fair value of $8.28. The Company also granted to the independent directors an aggregate of 3,896 RSUs with a grant date fair value of $30.30. The aggregate number of shares of common stock that may be issued to team members and directors under the 2013 Incentive Plan may not exceed 10,089,072. Shares subject to awards granted under the 2013 Incentive Plan which are subsequently forfeited, expire unexercised or are otherwise not issued will not be treated as having been issued for purposes of the share limitation. 2011 Option Plan In May 2011, the Company adopted the 2011 Option Plan to provide team members or directors of the Company with options to acquire shares of the Company. The Company had authorized 12,100,000 shares for issuance under the 2011 Option Plan. Options may no longer be issued under the 2011 Option Plan. At June 28, 2015, there were 4,433,993 options outstanding under the 2011 Option Plan. Options The Company uses the Black-Scholes option pricing model to estimate the fair value of options at grant date. Options vest in accordance with the terms set forth in the grant letter and vary depending on if they are time-based or performance-based. Time-based options generally vest ratably over a period of 12 quarters (three years) and performance-based options vest over a period of three years based on financial performance targets set for each year. RSUs The fair value of RSUs is based on the closing price of the Company’s common stock on the grant date. RSUs generally vest annually over a period of two or three years from the grant date. PSAs Performance stock awards are restricted shares that are subject to the Company achieving certain earnings per share performance targets. The fair value of performance stock awards is based on the closing price of the Company’s common stock on the grant date. The performance conditions must be met at the end of the next fiscal year, or the performance stock awards are cancelled. If the performance conditions are met, the performance stock awards vest 50 percent at each of the second and third anniversary of the grant date. Equity-based Compensation Expense Equity-based compensation expense was reflected in the consolidated statements of operations as follows: Thirteen Weeks Ended Twenty-Six Weeks Ended June 28, 2015 June 29, 2014 June 28, 2015 June 29, 2014 Cost of sales, buying and occupancy $ 130 $ 196 $ 231 $ 393 Direct store expenses 284 229 467 365 Selling, general and administrative expenses 878 1,163 1,736 2,237 Equity-based compensation expense before income taxes 1,292 1,588 2,434 2,995 Income tax benefit (504 ) (635 ) (950 ) (1,198 ) Net equity-based compensation expense $ 788 $ 953 $ 1,484 $ 1,797 As of June 28, 2015 and December 28, 2014, there were approximately 5.3 million and 6.9 million options outstanding, of which 0.8 million and 0.9 million were unvested options, respectively. At both June 28, 2015 and December 28, 2014, there were approximately 0.1 million unvested RSUs outstanding. As of June 28, 2015 and December 28, 2014, there were approximately 0.1 million and no unvested performance stock awards outstanding, respectively. As of June 28, 2015, total unrecognized compensation expense related to outstanding options was $4.4 million which, if the service and performance conditions are fully met, is expected to be recognized over the next 1.5 years on a weighted-average basis. As of June 28, 2015, total unrecognized compensation expense related to outstanding RSUs was $4.3 million which, if the service conditions are fully met, is expected to be recognized over the next 1.8 years on a weighted-average basis. As of June 28, 2015, total unrecognized compensation expense related to outstanding PSAs was $2.5 million which, if the performance conditions are fully met, is expected to be recognized over the next 2.2 years on a weighted-average basis. If performance conditions are not met, no expense will be recorded for the PSAs for which the conditions were not met. As of June 28, 2015, it was not expected that the performance conditions would be met and no expense had been recorded for the PSAs. During the twenty-six weeks ended June 28, 2015 and June 29, 2014, the Company received $6.2 million and $4.8 million, respectively, in cash proceeds from the exercise of options. |
Recently Issued Accounting Pr20
Recently Issued Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 28, 2015 | |
Fair Value Disclosures [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU No. 2014-08 amends previous guidance related to the criteria for reporting a disposal as a discontinued operation by elevating the threshold for qualification for discontinued operations treatment to a disposal that represents a strategic shift that has a major effect on an organization’s operations or financial results. This guidance also requires expanded disclosures for transactions that qualify as a discontinued operation and requires disclosure of individually significant components that are disposed of or held for sale but do not qualify for discontinued operations reporting. This guidance is effective prospectively for all disposals or components initially classified as held for sale in periods beginning on or after December 15, 2014, with early adoption permitted. The Company’s adoption of this guidance did not have a material effect on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU No. 2014-09 provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. These may include identifying performance obligations in the contract, and estimating the amount of variable consideration to include in the transaction price attributable to each separate performance obligation. This guidance will be effective for the Company for its fiscal year 2017. The FASB recently announced a proposal to defer the effective date of this guidance by one year, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance. In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU No. 2014-15 requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. This guidance will be effective for the Company for its fiscal year 2017, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU No. 2015-03 requires an entity to present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. This guidance will be effective for the Company for its fiscal year 2017. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently evaluating the potential impact of this guidance. In April 2015, the FASB issued ASU No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” ASU No. 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. This guidance will be effective for the Company for its fiscal year 2016. Early adoption is permitted. The amendment may be adopted either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. The Company is currently evaluating the potential impact of this guidance. |
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, indefinite-lived intangible assets, long-lived assets and in the valuation of store closure and exit costs. The determination of fair values of certain tangible and intangible assets for purposes of the Company’s goodwill impairment evaluation as described above was based upon a step zero assessment. Closed facility reserves are recorded at net present value to approximate fair value which is classified as Level 3 in the hierarchy. The estimated fair value of the closed facility reserve is calculated based on the present value of the remaining lease payments and other charges using a weighted average cost of capital, reduced by estimated sublease rentals. The weighted average cost of capital was estimated using information from comparable companies and management’s judgment related to the risk associated with the operations of the stores. Cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued salaries and benefits and other accrued liabilities approximate fair value because of the short maturity of those instruments. Based on open market transactions comparable to the Term Loan (as defined in Note 6, “Long-Term Debt”), the fair value of the long-term debt, including current maturities, approximates carrying value as of June 28, 2015 and December 28, 2014. The Company’s estimates of the fair value of long-term debt (including current maturities) were classified as Level 2 in the fair value hierarchy. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 28, 2015 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | A summary of accounts receivable is as follows: As Of June 28, 2015 December 28, Vendor $ 10,898 $ 8,246 Receivables from landlords 4,945 1,993 Other 2,879 3,852 Total $ 18,722 $ 14,091 |
Accrued Salaries and Benefits (
Accrued Salaries and Benefits (Tables) | 6 Months Ended |
Jun. 28, 2015 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Salaries and Benefits | A summary of accrued salaries and benefits is as follows: As Of June 28, 2015 December 28, 2014 Accrued payroll $ 9,324 $ 9,196 Vacation 8,877 7,476 Bonus 3,097 12,138 Other 696 877 Total $ 21,994 $ 29,687 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 28, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | A summary of long-term debt is as follows: As Of Facility Maturity Interest Rate June 28, 2015 December 28, 2014 Senior secured debt $450.0 million Revolving Credit Facility April 17, 2020 Variable $ 160,000 $ — Former Term Loan, net of original issue discount April 23, 2020 Variable — $ 256,357 Former Revolving Credit Facility April 23, 2018 Variable — — Total debt 160,000 256,357 Less current portion — (7,746 ) Long-term debt, net of current portion $ 160,000 $ 248,611 |
Closed Facility Reserves (Table
Closed Facility Reserves (Tables) | 6 Months Ended |
Jun. 28, 2015 | |
Restructuring and Related Activities [Abstract] | |
Summary of Closed Facility Reserve Activity | The following is a summary of closed facility reserve activity during the twenty-six weeks ended June 28, 2015 and fiscal year ended December 28, 2014: June 28, December 28, Beginning balance $ 1,785 $ 4,713 Additions 1,144 688 Usage (658 ) (3,204 ) Adjustments 272 (412 ) Ending balance $ 2,543 $ 1,785 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jun. 28, 2015 | |
Earnings Per Share [Abstract] | |
Summary of Reconciliation of Numerators and Denominators of Basic and Diluted Net Income Per Share | A reconciliation of the numerators and denominators of the basic and diluted net income per share calculations is as follows (in thousands, except per share amounts): Thirteen Weeks Ended Twenty-Six Weeks Ended June 28, 2015 June 29, 2014 June 28, 2015 June 29, 2014 Basic net income per share: Net income $ 31,322 $ 30,151 $ 68,789 $ 63,884 Weighted average shares outstanding 153,393 149,681 152,814 148,720 Basic net income per share $ 0.20 $ 0.20 $ 0.45 $ 0.43 Diluted net income per share: Net income $ 31,322 $ 30,151 $ 68,789 $ 63,884 Weighted average shares outstanding 153,393 149,681 152,814 148,720 Dilutive effect of equity-based awards: Assumed exercise of options to purchase shares 2,552 4,358 2,884 4,950 Restricted stock units 4 — 30 — Weighted average shares and equivalent shares outstanding 155,949 154,039 155,728 153,670 Diluted net income per share $ 0.20 $ 0.20 $ 0.44 $ 0.42 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 28, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Equity-Based Compensation Expense | Equity-based compensation expense was reflected in the consolidated statements of operations as follows: Thirteen Weeks Ended Twenty-Six Weeks Ended June 28, 2015 June 29, 2014 June 28, 2015 June 29, 2014 Cost of sales, buying and occupancy $ 130 $ 196 $ 231 $ 393 Direct store expenses 284 229 467 365 Selling, general and administrative expenses 878 1,163 1,736 2,237 Equity-based compensation expense before income taxes 1,292 1,588 2,434 2,995 Income tax benefit (504 ) (635 ) (950 ) (1,198 ) Net equity-based compensation expense $ 788 $ 953 $ 1,484 $ 1,797 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - Jun. 28, 2015 $ in Millions | USD ($) | USD ($)Segment |
Organization And Description Of Business [Line Items] | ||
Number of reportable segment | 1 | |
Number of operating segment | 1 | |
Recognized gift card breakage income | $ | $ 0.8 | $ 0.8 |
Produce [Member] | Sales Revenue, Net [Member] | Product Concentration Risk [Member] | ||
Organization And Description Of Business [Line Items] | ||
Approximate net sales from produce in the first half of the fiscal year | 25.00% |
Accounts Receivable - Summary o
Accounts Receivable - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands | Jun. 28, 2015 | Dec. 28, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 18,722 | $ 14,091 |
Vendor [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 10,898 | 8,246 |
Receivables from Landlords [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 4,945 | 1,993 |
Other [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 2,879 | $ 3,852 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Detail) - USD ($) $ in Millions | Jun. 28, 2015 | Dec. 28, 2014 |
Vendor [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for receivables | $ 0.2 | $ 0.3 |
Accrued Salaries and Benefits -
Accrued Salaries and Benefits - Summary of Accrued Salaries and Benefits (Detail) - USD ($) $ in Thousands | Jun. 28, 2015 | Dec. 28, 2014 |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 9,324 | $ 9,196 |
Vacation | 8,877 | 7,476 |
Bonus | 3,097 | 12,138 |
Other | 696 | 877 |
Total | $ 21,994 | $ 29,687 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 28, 2015 | Dec. 28, 2014 | |
Debt Instrument [Line Items] | ||
Total debt | $ 160,000 | $ 256,357 |
Less current portion | (7,746) | |
Long-term debt, net of current portion | $ 160,000 | 248,611 |
Senior secured debt [Member] | Former Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 256,357 | |
Debt instrument maturity | Apr. 23, 2020 | |
Debt instrument, Interest Rate | Variable | |
Senior secured debt [Member] | $450.0 million Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 160,000 | |
Debt instrument maturity | Apr. 17, 2020 | |
Debt instrument, Interest Rate | Variable | |
Senior secured debt [Member] | Former Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument maturity | Apr. 23, 2018 | |
Debt instrument, Interest Rate | Variable |
Long-Term Debt - Summary of L32
Long-Term Debt - Summary of Long-Term Debt (Parenthetical) (Detail) - Senior secured debt [Member] | Jun. 28, 2015USD ($) |
Debt Instrument [Line Items] | |
Debt instrument face amount | $ 260,000,000 |
$450.0 million Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Debt instrument face amount | $ 450,000,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 28, 2015 | Jun. 28, 2015 | Jun. 29, 2014 | Apr. 17, 2015 | Mar. 29, 2015 | Dec. 28, 2014 | Apr. 23, 2013 | |
Debt Instrument [Line Items] | |||||||
Current portion of long-term debt discount | $ 1,000,000 | ||||||
Non-current portion of long-term debt discount | $ 3,900,000 | ||||||
Repayment of Term Loan | $ 261,250,000 | $ 3,500,000 | |||||
Loss on extinguishment of debt | $ (5,481,000) | (5,481,000) | |||||
Borrowings under credit facilities | 160,000,000 | $ 160,000,000 | $ 260,000,000 | ||||
Participation fee | 1.75% | ||||||
Issuance fee | 0.125% | ||||||
Credit facility termination date | Apr. 17, 2020 | ||||||
Principal payments on the Credit Facility | 100,000,000 | ||||||
Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Net leverage ratio | 300.00% | ||||||
Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest coverage ratio | 175.00% | ||||||
Former Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit interest rate terms | All amounts outstanding under the Former Term Loan bore interest, at the Company's option, at a rate per annum equal to LIBOR (with a 1.00% floor with respect to Eurodollar borrowings under the Term Loan), adjusted for statutory reserves, plus a margin equal to 3.00%, or an alternate base rate, plus a margin equal to 2.00%, as set forth in the Former Credit Facility. | ||||||
Former Revolving Credit Facility [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on base rate | 3.00% | ||||||
Former Revolving Credit Facility [Member] | Alternate Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on base rate | 2.00% | ||||||
Former Revolving Credit Facility [Member] | Eurodollar [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility interest rate | 1.00% | ||||||
Senior secured debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument face amount | 260,000,000 | $ 260,000,000 | |||||
Loss on extinguishment of debt | (5,500,000) | ||||||
Borrowings under credit facilities | $ 0 | ||||||
Letters of credit issued | $ 2,500,000 | $ 2,500,000 | |||||
Line of credit interest rate terms | Either at adjusted LIBOR plus 1.75% per annum, or a base rate plus 0.75% per annum. The interest rate margins are subject to adjustment pursuant to a pricing grid based on the Company's total gross leverage ratio, as defined in the Credit Agreement. | ||||||
Credit facility unused commitment fee percentage | 0.25% | ||||||
Senior secured debt [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on base rate | 1.75% | ||||||
Senior secured debt [Member] | Alternate Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate spread on base rate | 0.75% | ||||||
Senior secured debt [Member] | Former Term Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of Term Loan | $ 257,800,000 | ||||||
Borrowings under credit facilities | $ 700,000,000 | ||||||
Debt instrument maturity | Apr. 23, 2020 | ||||||
Debt instrument principal repayment percentage | 1.00% | 1.00% | |||||
Debt instrument periodic payment | Quarterly principal payments | ||||||
Senior secured debt [Member] | Swingline Loan Subfacility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument face amount | $ 15,000,000 | $ 15,000,000 | |||||
Senior secured debt [Member] | $450.0 million Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility maximum borrowing capacity | $ 450,000,000 | ||||||
Debt instrument face amount | 450,000,000 | $ 450,000,000 | |||||
Debt instrument maturity | Apr. 17, 2020 | ||||||
Senior secured debt [Member] | Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Capitalized total debt issuance costs | $ 2,300,000 | ||||||
Senior secured debt [Member] | Former Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument face amount | 60,000,000 | 60,000,000 | |||||
Borrowings under credit facilities | $ 60,000,000 | ||||||
Capitalized total debt issuance costs | $ 1,100,000 | ||||||
Credit facility unused commitment fee percentage | 0.50% | ||||||
Debt instrument maturity | Apr. 23, 2018 | ||||||
Senior secured debt [Member] | Former Revolving Credit Facility [Member] | Swingline Loan Subfacility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument face amount | $ 5,000,000 | $ 5,000,000 |
Closed Facility Reserves - Summ
Closed Facility Reserves - Summary of Closed Facility Reserve Activity (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 28, 2015 | Dec. 28, 2014 | |
Restructuring and Related Activities [Abstract] | ||
Beginning balance | $ 1,785 | $ 4,713 |
Additions | 1,144 | 688 |
Usage | (658) | (3,204) |
Adjustments | 272 | (412) |
Ending balance | $ 2,543 | $ 1,785 |
Closed Facility Reserves - Addi
Closed Facility Reserves - Additional Information (Detail) | Jun. 28, 2015Store |
Closure Store [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Number of stores | 1 |
Relocation Store [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Number of stores | 1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2015 | Jun. 29, 2014 | Jun. 28, 2015 | Jun. 29, 2014 | |
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 37.70% | 38.70% | 38.00% | 38.80% |
Excess tax benefits resulting from stock awards credited to stockholders' equity | $ 19.3 | |||
Related to Stock Award Activity Prior to 2015 [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Excess tax benefits resulting from stock awards credited to stockholders' equity | $ 0.1 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2015USD ($)Stockholders | Jun. 29, 2014USD ($) | Jun. 28, 2015USD ($) | Jun. 29, 2014USD ($) | |
Coffee Supplier [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases from investors | $ 2.5 | $ 1.8 | $ 4.8 | $ 3.8 |
Accounts payable to vendor | $ 0.7 | 0.7 | 0.7 | 0.7 |
Number of stockholders that are investors in a company that is a supplier of coffee to the Company | Stockholders | 2 | |||
Technology Supplier [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases from investors | $ 1.8 | 2 | 3.1 | 2.9 |
Accounts payable to vendor | $ 0.2 | $ 0.3 | $ 0.2 | $ 0.3 |
Number of senior executive purchased stock in a technology supplier to the Company | Stockholders | 1 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - Mar. 10, 2015 - USD ($) | Total |
Class of Stock [Line Items] | |
Secondary public offering shares of common stock | 15,847,800 |
March Secondary Offering [Member] | |
Class of Stock [Line Items] | |
Sale of secondary public offering shares | 0 |
Proceeds from secondary public offering | $ 0 |
Net Income Per Share - Summary
Net Income Per Share - Summary of Reconciliation of Numerators and Denominators of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 28, 2015 | Jun. 29, 2014 | Jun. 28, 2015 | Jun. 29, 2014 | Dec. 28, 2014 | |
Basic net income per share: | |||||
Net income | $ 31,322 | $ 30,151 | $ 68,789 | $ 63,884 | $ 107,692 |
Weighted average shares outstanding | 153,393 | 149,681 | 152,814 | 148,720 | |
Basic net income per share | $ 0.20 | $ 0.20 | $ 0.45 | $ 0.43 | |
Diluted net income per share: | |||||
Net income | $ 31,322 | $ 30,151 | $ 68,789 | $ 63,884 | $ 107,692 |
Weighted average shares outstanding | 153,393 | 149,681 | 152,814 | 148,720 | |
Dilutive effect of equity-based awards: | |||||
Weighted average shares and equivalent shares outstanding | 155,949 | 154,039 | 155,728 | 153,670 | |
Diluted net income per share | $ 0.20 | $ 0.20 | $ 0.44 | $ 0.42 | |
Stock Option [Member] | |||||
Dilutive effect of equity-based awards: | |||||
Dilutive securities | 2,552 | 4,358 | 2,884 | 4,950 | |
RSUs [Member] | |||||
Dilutive effect of equity-based awards: | |||||
Dilutive securities | 4 | 30 |
Net Income Per Share - Addition
Net Income Per Share - Additional Information (Detail) - Stock Option [Member] - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2015 | Jun. 29, 2014 | Jun. 28, 2015 | Jun. 29, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities | 0.8 | 1 | 0.8 | 1 |
Performance Stock Awards [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities | 0.1 | 0.1 | ||
RSUs [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities | 0.1 | 0.1 | 0.1 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Detail) - USD ($) | May. 21, 2015 | Mar. 11, 2015 | Jun. 28, 2015 | Jun. 29, 2014 | Jun. 28, 2015 | Jun. 29, 2014 | Dec. 28, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options outstanding | 5,300,000 | 5,300,000 | 6,900,000 | ||||
Unvested stock outstanding | 800,000 | 800,000 | 900,000 | ||||
Unrecognized compensation expense | $ 4,400,000 | $ 4,400,000 | |||||
Weighted-average period expected to be recognized | 1 year 6 months | ||||||
Recognized compensation expense | $ 1,292,000 | $ 1,588,000 | $ 2,434,000 | $ 2,995,000 | |||
Proceeds from the exercise of stock options | $ 6,218,000 | $ 4,786,000 | |||||
Third Anniversary [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Second Anniversary [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
2013 Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized for issuance under plan | 10,089,072 | 10,089,072 | |||||
2013 Incentive Plan [Member] | Officers and Team Members [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Aggregate purchase of common stock granted | 277,833 | ||||||
Stock options awarded to employees, exercise price | $ 34.33 | ||||||
Grant date fair value | $ 9.42 | ||||||
2013 Incentive Plan [Member] | Independent Directors [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Aggregate purchase of common stock granted | 14,492 | ||||||
Stock options awarded to employees, exercise price | $ 30.30 | ||||||
Grant date fair value | $ 8.28 | ||||||
2011 Option Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized for issuance under plan | 12,100,000 | 12,100,000 | |||||
Options outstanding | 4,433,993 | 4,433,993 | |||||
RSUs [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested stock outstanding | 100,000 | 100,000 | 100,000 | ||||
Unrecognized compensation expense | $ 4,300,000 | $ 4,300,000 | |||||
Weighted-average period expected to be recognized | 1 year 9 months 18 days | ||||||
RSUs [Member] | Minimum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
RSUs [Member] | Maximum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
RSUs [Member] | 2013 Incentive Plan [Member] | Officers and Team Members [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Aggregate purchase of common stock granted | 87,394 | ||||||
Grant date fair value | $ 34.33 | ||||||
RSUs [Member] | 2013 Incentive Plan [Member] | Independent Directors [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Aggregate purchase of common stock granted | 3,896 | ||||||
Grant date fair value | $ 30.30 | ||||||
Performance Stock Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance stock awards vesting description | The performance conditions must be met at the end of the next fiscal year, or the performance stock awards are cancelled. If the performance conditions are met, the performance stock awards vest 50 percent at each of the second and third anniversary of the grant date. | ||||||
Unvested stock outstanding | 100,000 | 100,000 | 0 | ||||
Unrecognized compensation expense | $ 2,500,000 | $ 2,500,000 | |||||
Weighted-average period expected to be recognized | 2 years 2 months 12 days | ||||||
Recognized compensation expense | $ 0 | ||||||
Performance Stock Awards [Member] | Third Anniversary [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance stock awards vesting percentage | 50.00% | ||||||
Performance Stock Awards [Member] | Second Anniversary [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance stock awards vesting percentage | 50.00% | ||||||
Performance Stock Awards [Member] | 2013 Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Aggregate purchase of common stock granted | 71,753 | ||||||
Grant date fair value | $ 34.33 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Equity-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2015 | Jun. 29, 2014 | Jun. 28, 2015 | Jun. 29, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Equity-based compensation expense before income taxes | $ 1,292 | $ 1,588 | $ 2,434 | $ 2,995 |
Income tax benefit | (504) | (635) | (950) | (1,198) |
Net equity-based compensation expense | 788 | 953 | 1,484 | 1,797 |
Cost of Sales, Buying and Occupancy [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Equity-based compensation expense before income taxes | 130 | 196 | 231 | 393 |
Direct Store Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Equity-based compensation expense before income taxes | 284 | 229 | 467 | 365 |
Selling, General and Administrative Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Equity-based compensation expense before income taxes | $ 878 | $ 1,163 | $ 1,736 | $ 2,237 |