Sprouts Farmers Market, Inc.

Good day and thank you for standing by. Welcome to the Sprouts Farmers Market fourth quarter and full year 2024 earnings conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today. Susanna Livingston, Vice President, Investor Relations and Treasury.

Thank you, and good afternoon, everyone. We are pleased you are joining Sprouse on our fourth quarter and full year 2024 earnings call. Jack Sinclair, Chief Executive Officer, Curtis Valentine, Chief Financial Officer, and Nick Conant, President and Chief Operating Officer, are with me today. The earnings release announcing our fourth quarter and full year 2024 results, the webcast of this call and financial slides can be accessed through the investor relations section of our website at investors.sprouts.com. During this call, management may make certain forward-looking statements, including statements regarding our expectations for 2025 and beyond. These statements involve several risks and uncertainties that could cause results to differ materially from those described in the forward-looking statements. For more information, please refer to the risk factors discussed in our SEC filing and the commentary on forward-looking statements at the end of our earnings release. Our remarks today include references to non-GAAP measures. Please see the tables in our earnings release to reconcile our non-GAAP measures to the comparable GAAP figures. With that, let me hand it over to Jack.

Thanks, Susannah, and good afternoon, everyone. First, I'd like to extend my deepest gratitude to our dedicated team for their tireless efforts during the past few months. Our stores have been dealing with floods in the Carolinas, the Los Angeles wildfires, and the unfortunate airplane crash near our Philadelphia store. I want to take this opportunity to thank our team members for supporting one another, the communities we serve, and the families devastated by these events. And thank you to the firefighters and other first responders who did so much. I'm proud that the Sprouts Healthy Communities Foundation firefighters and their families and the rebuilding effort for communities in Los Angeles. 2024 was an outstanding year for Sprouts. It was one of tremendous execution and exceptional teamwork. Our teams across all areas of the business worked together to deliver a 13% increase in sales for the year, a 7.6% comp and a bottom line margin improvement of more than 70 basis points. This success is a testament to the team's focus on our target customers, delivering operational excellence daily and positioning sprouts to capitalize on the ongoing trends towards healthy eating. Our target customers seek differentiated, attribute-driven healthy products. We believe these customers represent $200 billion of the $1.6 trillion food at home market. By maintaining our focus on their needs, we have established ourselves as a leader in trend-forward health and speciality products. This focus includes all aspects of our business. Offering healthy products and practising responsible sourcing are fundamental to our purpose to help people live and eat better. Whilst we were delighted that Progressive Grocer has recognised our commitment to offering this unique assortment by naming us Retailer of the Year for 2024, what truly matters to us is a recognition we received from our customers. In 2024, we introduced approximately 7,100 new items, including more than 300 new products under the Sprouts brand, such as grass-fed meatballs, organic pasture-raised eggs, and the new RealRoot line of premium health and beauty products. Our teams collaborated across functions to execute merchandising events that effectively highlighted our differentiated products. such as our Summer Cherry Festival, and we continue to get better at helping our target customers find the right products for them. We ended the year with the company's best customer service scores, thanks to a service-orientated culture embodied by our store team members. We also streamlined our operations through disciplined inventory management across the stores, distribution channels, and support office, positively impacting our sustainable margin profile. Our customer engagement has continued to improve, resulting in strong traffic across all of our channels and healthy new customer growth. Our marketing is geared to our target customers and is unique and differentiated, much like our product offering. We have seen strong success in leaning away from our conventional seasonal messaging to focusing on unique products and solutions. We continue to improve our ability to engage via social media by utilizing healthy eating trends and working with influencers who share our purpose of helping people live and eat better. The addition of Uber Eats as a delivery partner has helped us grow our e-commerce sales to above $1 billion, a significant landmark for our e-commerce team. In 2024, we expanded our footprint from sea to shining sea, and added Wyoming as our 24th state. We opened 33 new stores, which together performed robustly and surpassed previous year's performance and our early expectations. Our growth created approximately 3,300 new jobs We promoted almost 20% of our 33,000 team members in 2024 while continuing to cultivate a workplace culture that we believe will sustain a profitable business for years to come. None of our achievements would be possible without our fantastic team. In summary, our achievements in 2024 have laid a strong foundation for the future and we're only just getting started. We have significantly improved the talent in our business and I'm excited to work alongside our team members as we continue to unlock our incredible potential. I'll discuss our 2025 journey in a few moments. For now, I'll hand it to Curtis to review our 2024 financial performance in the fourth quarter and the year, as well as our 2025 outlook. Curtis.