Sprouts Farmers Market, Inc. 10-K

Item 2. Properties We seek to select sites for our store locations in markets with growth potential where our target customers and supply chain capabilities intersect. As of December 29, 2024, we had 440 stores located in 24 states, as shown in the chart below: State Number of Stores State Number of Stores Alabama 3 New Jersey 3 Arizona 47 New Mexico 10 California 149 North Carolina 6 Colorado 33 Oklahoma 11 Delaware 2 Pennsylvania 5 Florida 47 South Carolina 2 Georgia 17 Tennessee 8 Kansas 4 Texas 54 Louisiana 1 Utah 5 Maryland 7 Virginia 3 Missouri 3 Washington 3 Nevada 16 Wyoming 1 In fiscal 2024, we opened 33 new stores. In fiscal 2023, we opened 30 new stores and acquired two stores. We lease all of our stores from unaffiliated third parties. A typical store lease is for an initial 10 to 15 year term with three or four renewal options of five years each. We expect that we will be able to renegotiate these leases or relocate these stores as necessary. In addition to new store openings, we remodel or relocate stores periodically in order to improve performance. See “Business – New Store Development” for additional information with respect to our store site selection process. 30 Table of Contents As of December 29, 2024, we utilized six distribution centers. Information about such facilities, as well as our current corporate office in Phoenix, Arizona, is set forth in the table below: Facility State Square Footage* Corporate Office Arizona 96,000 Distribution Center Arizona 129,000 Distribution Center California 337,000 Distribution Center California 108,000 Distribution Center Colorado 134,000 Distribution Center Florida 134,000 Distribution Center Texas 234,000 ________________________________________________ * Rounded to the nearest 1,000 square feet We lease our corporate office and our distribution centers in Arizona, Southern California, Colorado, Florida and Texas from unaffiliated third parties; our Northern California distribution center is leased by a third-party logistics provider. We expect to expand our distribution center network to support our growth. See “Business – Sourcing and Distribution” for additional information with respect to our distribution centers. We believe our portfolio of long-term leases is a valuable asset supporting our retail operations, but we do not believe that any individual store property or distribution center lease is material to our financial condition or results of operations. In fiscal 2023 as part of our real estate portfolio review, we closed 11 stores. These stores, on average, were approximately 30% larger than our current prototype format and were underperforming financially. See Note 26, “Store Closures” to our consolidated financial statements contained in Item 8 of this Annual Report on Form 10-K for additional information regarding these store closures.