SPROUTS FARMERS MARKET, INC., 10-Q filed on 5/1/2023
Quarterly Report
v3.23.1
Document and Entity Information - shares
 3 Months Ended
Apr. 02, 2023
Apr. 27, 2023
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Apr. 02, 2023  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q1  
Trading Symbol SFM  
Entity Registrant Name Sprouts Farmers Market, Inc.  
Entity Central Index Key 0001575515  
Entity Current Reporting Status Yes  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   103,048,290
Entity Shell Company false  
Title of 12(b) Security Common Stock, $0.001 par value  
Security Exchange Name NASDAQ  
Entity Interactive Data Current Yes  
Entity File Number 001-36029  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 32-0331600  
Entity Address, Address Line One 5455 East High Street  
Entity Address, Address Line Two Suite 111  
Entity Address, City or Town Phoenix  
Entity Address, State or Province AZ  
Entity Address, Postal Zip Code 85054  
City Area Code 480  
Local Phone Number 814-8016  
Document Quarterly Report true  
Document Transition Report false  
v3.23.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Apr. 02, 2023
Jan. 01, 2023
Apr. 03, 2022
Current assets:      
Cash and cash equivalents $ 294,905 $ 293,233  
Accounts receivable, net 12,404 16,108  
Inventories 306,940 310,545  
Prepaid expenses and other current assets 41,699 53,918  
Total current assets 655,948 673,804  
Property and equipment, net of accumulated depreciation 715,342 722,241  
Operating lease assets, net 1,195,187 1,106,524  
Intangible assets 208,060 184,960  
Goodwill 381,751 368,878  
Other assets 13,106 13,973  
Total assets 3,169,394 3,070,380  
Current liabilities:      
Accounts payable 187,948 172,904  
Accrued liabilities 148,865 151,306  
Accrued salaries and benefits 48,160 61,574  
Accrued income tax 5,456 0  
Current portion of operating lease liabilities 123,726 135,584  
Current portion of finance lease liabilities 976 1,012  
Total current liabilities 515,131 522,380  
Long-term operating lease liabilities 1,266,282 1,145,173  
Long-term debt and finance lease liabilities 233,720 258,902  
Other long-term liabilities 36,421 36,340  
Deferred income tax liability 66,910 61,123  
Total liabilities 2,118,464 2,023,918  
Commitments and contingencies (Note 7)  
Stockholders’ equity:      
Undesignated preferred stock; $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding 0 0  
Common stock, $0.001 par value; 200,000,000 shares authorized,103,470,717 shares issued and outstanding, April 2, 2023; 105,072,756 shares issued and outstanding, January 1, 2023 104 105  
Additional paid-in capital 753,822 726,345  
Retained earnings 297,004 320,012  
Total stockholders’ equity 1,050,930 1,046,462 $ 1,011,974
Total liabilities and stockholders’ equity $ 3,169,394 $ 3,070,380  
v3.23.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Apr. 02, 2023
Jan. 01, 2023
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 103,470,717 105,072,756
Common stock, shares outstanding 103,470,717 105,072,756
v3.23.1
Consolidated Statements of Income (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Income Statement [Abstract]    
Net sales $ 1,733,310 $ 1,641,161
Cost of sales 1,083,248 1,029,413
Gross profit 650,062 611,748
Selling, general and administrative expenses 486,195 459,910
Depreciation and amortization (exclusive of depreciation included in cost of sales) 34,068 31,820
Store closure and other costs, net 28,277 377
Income from operations 101,522 119,641
Interest expense, net 2,220 3,039
Income before income taxes 99,302 116,602
Income tax provision 23,142 28,295
Net income $ 76,160 $ 88,307
Net income per share:    
Basic $ 0.73 $ 0.80
Diluted $ 0.73 $ 0.79
Weighted average shares outstanding:    
Basic 103,827 110,903
Diluted 104,876 111,833
v3.23.1
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Statement of Comprehensive Income [Abstract]    
Net income $ 76,160 $ 88,307
Other comprehensive income (loss), net of tax    
Unrealized gains (losses) on cash flow hedging activities, net of income tax of $1,240 during the thirteen weeks ended April 3, 2022 0 3,586
Reclassification of net gains (losses) on cash flow hedges to net income, net of income tax of ($377) during the thirteen weeks ended April 3, 2022 0 (1,091)
Total other comprehensive income (loss) 0 2,495
Comprehensive income $ 76,160 $ 90,802
v3.23.1
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical)
$ in Thousands
 3 Months Ended
Apr. 03, 2022
USD ($)
Statement of Comprehensive Income [Abstract]  
Income tax expenses (Benefit) on cash flow hedging activities $ 1,240
Income tax expenses (Benefit) for reclassification of net gains (losses) on cash flow hedges $ (377)
v3.23.1
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Total
Common Stock [Member]
Additional Paid In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Beginning Balance at Jan. 02, 2022 $ 959,876 $ 111 $ 704,701 $ 258,822 $ (3,758)
Beginning Balance, Shares at Jan. 02, 2022   111,114,374      
Net income 88,307     88,307  
Other comprehensive income (loss) 2,495       2,495
Issuance of shares under stock plans 2,555   2,555    
Issuance of shares under stock plans, Shares   610,101      
Repurchase and retirement of common stock $ (45,715) $ (1)   (45,714)  
Repurchase and retirement of common stock, Shares (1,481,187) (1,481,187)      
Share-based compensation $ 4,456   4,456    
Issuance of shares for acquisition 0        
Ending Balance at Apr. 03, 2022 1,011,974 $ 110 711,712 301,415 $ (1,263)
Ending Balance, Shares at Apr. 03, 2022   110,243,288      
Beginning Balance at Jan. 01, 2023 1,046,462 $ 105 726,345 320,012  
Beginning Balance, Shares at Jan. 01, 2023   105,072,756      
Net income 76,160     76,160  
Other comprehensive income (loss) 0        
Issuance of shares under stock plans 5,488 $ 1 5,487    
Issuance of shares under stock plans, Shares   882,014      
Repurchase and retirement of common stock $ (99,171) $ (3)   99,168  
Repurchase and retirement of common stock, Shares (3,038,411) (3,038,411)      
Share-based compensation $ 3,852   3,852    
Issuance of shares for acquisition, Shares   554,358      
Issuance of shares for acquisition 18,139 $ 1 18,138    
Ending Balance at Apr. 02, 2023 $ 1,050,930 $ 104 $ 753,822 $ 297,004  
Ending Balance, Shares at Apr. 02, 2023   103,470,717      
v3.23.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Operating activities    
Net income $ 76,160 $ 88,307
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization expense 34,912 32,720
Operating lease asset amortization 30,696 28,043
Impairment of assets 27,845 171
Share-based compensation 3,852 4,456
Deferred income taxes (386) 2,291
Other non-cash items 14 313
Changes in operating assets and liabilities, net of effects from acquisition:    
Accounts receivable 6,241 9,770
Inventories 5,400 (6,790)
Prepaid expenses and other current assets 9,528 3,613
Other assets 2,609 1,757
Accounts payable 27,006 27,645
Accrued liabilities (2,024) (6,857)
Accrued salaries and benefits (13,712) (14,106)
Accrued income tax 5,456 15,275
Operating lease liabilities (33,956) (32,180)
Other long-term liabilities 179 (1,399)
Cash flows from operating activities 179,820 153,029
Investing activities    
Purchases of property and equipment (47,044) (27,227)
Payments for acquisition, net of cash acquired (13,042) 0
Cash flows used in investing activities (60,086) (27,227)
Financing activities    
Proceeds from revolving credit facilities 0 62,500
Payments on revolving credit facilities (25,000) (62,500)
Payments on finance lease liabilities (219) (176)
Payments of deferred financing costs 0 (3,373)
Repurchase of common stock (98,349) (45,715)
Proceeds from exercise of stock options 5,488 2,555
Cash flows used in financing activities (118,080) (46,709)
Increase in cash, cash equivalents, and restricted cash 1,654 79,093
Cash, cash equivalents, and restricted cash at beginning of the period 295,192 247,004
Cash, cash equivalents, and restricted cash at the end of the period 296,846 326,097
Supplemental disclosure of cash flow information    
Cash paid for interest 3,641 3,044
Cash refunded for income taxes 54 46
Leased assets obtained in exchange for new operating lease liabilities 138,662 42,176
Supplemental disclosure of non-cash investing and financing activities    
Property and equipment in accounts payable and accrued liabilities 20,924 15,666
Issuance of shares for acquisition $ 18,139 $ 0
v3.23.1
Basis of Presentation
 3 Months Ended
Apr. 02, 2023
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, offers a unique food specialty retail experience featuring an open layout with fresh produce at the heart of the store. The Company continues to bring the latest in wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based and gluten-free. As of April 2, 2023, the Company operated 395 stores in 23 states. For convenience, 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 January 1, 2023 (“fiscal year 2022”) included in the Company’s Annual Report on Form 10-K, filed on March 2, 2023.

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. The fiscal year ending December 31, 2023 (“fiscal year 2023”) and fiscal year 2022 are 52-week years. The Company reports its results of operations on a 13-week quarter, except for 53-week fiscal years (in which the fourth quarter has 14 weeks).

All dollar amounts are in thousands, unless otherwise noted.

Revision of previously issued financial statements

The Company identified an error in the financing activities section of its consolidated statements of cash flows for the thirteen weeks ended April 3, 2022, related to the presentation of proceeds from and repayments of borrowings associated with a modification of the Company's revolving credit facility on March 25, 2022. The correction of the error did not have any impact on the previously reported consolidated balance sheets, statements of income, or statements of comprehensive income, nor did it have any impact on total cash flows from operating activities or used in investing or financing activities. Although the Company has determined that the error did not have a material impact on its previously issued consolidated financial statements, the Company revised the presentation of cash flows from financing activities to reflect the proceeds from borrowings under the revolving credit facility of $62.5 million as a cash inflow from financing activities, and the repayments of borrowings under the revolving credit facility of $62.5 million as a cash outflow from financing activities.
v3.23.1
Summary of Significant Accounting Policies
 3 Months Ended
Apr. 02, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Revenue Recognition

The Company’s performance obligations are satisfied upon the transfer of goods to the customer, which occurs at the point of sale, and payment from customers is also due at the time of sale. Proceeds from the sale of gift cards are recorded as a liability at the time of sale and recognized as sales when they are redeemed by the customer and the performance obligation is satisfied by the Company. The Company’s gift cards do not expire. Based on historical redemption rates, a small and relatively stable percentage of gift cards will never be redeemed, referred to as "breakage." Estimated breakage revenue is recognized over time in proportion to actual gift card redemptions and was not material in any period presented. A summary of the activity and balances in the gift card liability, net is as follows:

 

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Balance, beginning of year

 

$

10,906

 

 

$

12,586

 

Gift cards issued during the period but not redeemed (1)

 

 

1,222

 

 

 

1,192

 

Revenue recognized from beginning liability

 

 

(2,582

)

 

 

(3,276

)

Balance, end of year

 

$

9,546

 

 

$

10,502

 

(1) net of estimated breakage

The nature of goods the Company transfers to customers at the point of sale are inventories, consisting of merchandise purchased for resale.

The Company does not have any material contract assets or receivables from contracts with customers, any revenue recognized in the current period from performance obligations satisfied in previous periods, any contract performance obligations, or any material costs to obtain or fulfill a contract as of April 2, 2023.

Restricted Cash

Restricted cash relates to the Company's defined benefit plan forfeitures and the Company's healthcare, general liability and workers’ compensation plan benefits of approximately $1.9 million and $2.0 million as of April 2, 2023 and January 1, 2023, respectively. These balances are included in prepaid expenses and other current assets in the consolidated balance sheets.

Recently Issued Accounting Pronouncements Not Yet Adopted

No new accounting pronouncements issued or effective during the thirteen weeks ended April 2, 2023 had, or are expected to have, a material impact on the Company’s consolidated financial statements.
v3.23.1
Goodwill
 3 Months Ended
Apr. 02, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill Goodwill

 

The Company’s goodwill balance was $381.8 million and $368.9 million as of April 2, 2023 and January 1, 2023, respectively. As of April 2, 2023 and January 1, 2023, the Company had no accumulated goodwill impairment losses. The goodwill was related to the acquisitions of Sunflower Farmers Market, Henry’s Farmers Market and Ronald Cohn, Inc. For further details, see Note 16, "Business Combination".

 

A summary of the activity and balances in goodwill is as follows:

 

 

 

Balance at January 1, 2023

 

 

Additions

 

 

Balance at April 2, 2023

 

Goodwill

 

$

368,878

 

 

$

12,873

 

 

$

381,751

 
v3.23.1
Fair Value Measurements
 3 Months Ended
Apr. 02, 2023
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, intangible assets and long-lived assets.

The following tables present the fair value hierarchy for the Company’s financial liabilities measured at fair value on a recurring basis as of April 2, 2023 and January 1, 2023:

 

April 2, 2023

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Long-term debt

 

$

—

 

 

$

225,000

 

 

$

—

 

 

$

225,000

 

Total financial liabilities

 

$

—

 

 

$

225,000

 

 

$

—

 

 

$

225,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2023

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Long-term debt

 

$

—

 

 

$

250,000

 

 

$

—

 

 

$

250,000

 

Total financial liabilities

 

$

—

 

 

$

250,000

 

 

$

—

 

 

$

250,000

 

The determination of fair values of certain tangible and intangible assets for purposes of the Company’s goodwill or long-lived asset impairment evaluation is based upon Level 3 inputs. When necessary, the Company uses third party market data and market participant assumptions to derive the fair value of its asset groupings, which primarily include right-of-use lease assets and property and equipment.

Cash, cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, and accrued salaries and benefits approximate fair value because of the short maturity of those instruments. Based on comparable open market transactions, the fair value of the long-term debt approximated carrying value as of April 2, 2023 and January 1, 2023.
v3.23.1
Long-Term Debt and Finance Lease Liabilities
 3 Months Ended
Apr. 02, 2023
Long Term Debt And Finance Lease Liabilities [Abstract]  
Long-Term Debt and Finance Lease Liabilities

4. Long-Term Debt and Finance Lease Liabilities

A summary of long-term debt and finance lease liabilities is as follows:

 

 

 

 

 

 

 

As of

 

Facility

 

Maturity

 

Interest Rate

 

April 2, 2023

 

 

January 1, 2023

 

Senior secured debt

 

 

 

 

 

 

 

 

 

 

$700.0 million Credit Agreement

 

March 25, 2027

 

Variable

 

$

225,000

 

 

$

250,000

 

Finance lease liabilities

 

Various

 

n/a

 

 

8,720

 

 

 

8,902

 

Long-term debt and finance lease liabilities

 

 

 

 

 

$

233,720

 

 

$

258,902

 

 

Credit Agreement

The Company’s subsidiary, Sprouts Farmers Markets Holdings, LLC (“Intermediate Holdings”), is the borrower under a credit agreement entered into on March 25, 2022 (the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility (the "Revolving Credit Facility") with an initial aggregate commitment of $700.0 million. Amounts outstanding under the Credit Agreement may be increased from time to time in accordance with an expansion feature set forth in the Credit Agreement.

The Company capitalized debt issuance costs of $3.4 million related to the Credit Agreement, which, combined with the remaining $0.5 million debt issuance costs in respect of that certain amended and restated credit agreement entered into on March 27, 2018, by and among the Company, Intermediate Holdings, certain lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (the “Former Credit Facility”), which remained outstanding as of the time of Intermediate Holdings’ entry into the Credit Agreement, are being amortized on a straight-line basis to interest expense over the five-year term of the Credit Agreement.

The Credit Agreement provides for a $70.0 million letter of credit sub-facility (the "Letter of Credit Sub-Facility") and a $50.0 million swingline facility. Letters of credit issued under the Credit Agreement reduce the capacity of Intermediate Holdings to borrow under the Revolving Credit Facility. Letters of credit totaling $21.6 million have been issued as of April 2, 2023 under the Letter of Credit Sub-Facility, primarily to support the Company’s insurance programs.

Guarantees

Obligations under the Credit Agreement are guaranteed by the Company and substantially all of its existing and future wholly-owned material domestic subsidiaries, and are secured by first-priority security interests in substantially all of the assets of the Company, Intermediate Holdings, and the subsidiary guarantors, including, without limitation, a pledge by the Company of its equity interest in Intermediate Holdings.

Interest and Fees

Loans under the Credit Agreement will initially bear interest, at the Company's option, either at the Term SOFR (with a floor of 0.00%) plus a 0.10% SOFR adjustment and 1.00% per annum or base rate (with a floor of 0.00%) plus 0.00% per annum. The interest rate margins are subject to upward adjustments pursuant to a pricing grid based on the Company’s total net leverage ratio as set forth in the Credit Agreement and to upward or downward adjustments of up to 0.05% based upon the achievement of certain diversity and sustainability-linked metric thresholds, as set forth 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 commitments, which commitment fee ranges between 0.10% to 0.225% per annum, pursuant to a pricing grid based on the Company’s total net leverage ratio. The commitment fees are subject to upward or downward adjustments of up to 0.01% based upon the achievement of certain diversity and sustainability-linked metric thresholds, as set forth in the Credit Agreement.

As of April 2, 2023, loans outstanding under the Credit Agreement bore interest at Term SOFR (as defined in the Credit Agreement) plus a 0.10% SOFR adjustment and 1.00% per annum.

As of April 2, 2023, outstanding letters of credit issued under the Credit Agreement were subject to a participation fee of 1.00% per annum and an issuance fee of 0.125% per annum.

Payments and Borrowings

The Credit Agreement is scheduled to mature, and the commitments thereunder will terminate on March 25, 2027, subject to extensions as set forth therein.

The Company may prepay loans and permanently reduce commitments under the Credit Agreement at any time in agreed-upon minimum principal amounts, without premium or penalty (except SOFR breakage costs, if applicable).

In connection with the execution of the Credit Agreement, the Company's obligations under the Former Credit Facility were prepaid and terminated.

During the thirteen weeks ended April 2, 2023, the Company made no additional borrowings and made principal payments of $25.0 million, resulting in total outstanding debt under the Credit Agreement of $225.0 million as of April 2, 2023. During 2022, the Company made no additional borrowings or principal payments, other than the net change of $62.5 million in the composition of the lending syndicate associated with a modification of the Company's revolving credit facility on March 25, 2022, resulting in total outstanding debt under the Credit Agreement of $250.0 million as of January 1, 2023.

Subsequent to April 2, 2023, the Company made a $25.0 million principal payment, resulting in total outstanding debt under the Credit Agreement of $200.0 million as of May 1, 2023.

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 certain 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 3.75 to 1.00, which ratio may be increased from time to time in connection with certain permitted acquisitions pursuant to conditions as set forth in the Credit Agreement, and a minimum interest coverage ratio not to be less than 3.00 to 1.00. Each of these covenants is tested as of the last day of each fiscal quarter.

The Company was in compliance with all applicable covenants under the Credit Agreement as of April 2, 2023.
v3.23.1
Income Taxes
 3 Months Ended
Apr. 02, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

5. Income Taxes

The Company’s effective tax rate decreased to 23.3% for the thirteen weeks ended April 2, 2023, compared to 24.3% for the thirteen weeks ended April 3, 2022. The decrease in the effective tax rate is primarily due to an increase in excess tax benefits associated with share-based payment awards, partially offset by an increase of non-deductible executive compensation. The income tax effect resulting from excess tax benefits of share-based payment awards were $2.6 million and $1.5 million for the thirteen weeks ended April 2, 2023 and April 3, 2022, respectively.

The Company files income tax returns for federal purposes and in many states. The Company’s tax filings remain subject to examination by applicable tax authorities for a certain length of time, generally three years, following the tax year to which those filings relate.
v3.23.1
Related Party Transactions
 3 Months Ended
Apr. 02, 2023
Related Party Transactions [Abstract]  
Related Party Transactions

6. Related Party Transactions

On May 24, 2022, the Company appointed a new member to its board of directors who served as an executive officer of a company that is a supplier of nutrition bars and related products to the Company for resale. The director departed employment from this supplier on February 28, 2023, and the cost of sales recognized from this supplier during the thirteen weeks ended April 2, 2023 was immaterial.

v3.23.1
Commitments and Contingencies
 3 Months Ended
Apr. 02, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies . 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 and litigation matters. Self-insurance liabilities require significant judgment and actual claim settlements and associated expenses may differ from the Company’s current provisions for loss.

Proposition 65 Coffee Action

On April 13, 2010, an organization named Council for Education and Research on Toxics (“CERT”) filed a lawsuit in the Superior Court of the State of California, County of Los Angeles, against nearly 80 defendants who manufacture, package, distribute or sell brewed coffee, including the Company. CERT alleged that the defendants failed to provide warnings for their coffee products of exposure to the chemical acrylamide as required under California Health and Safety Code section 25249.5, the California Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Proposition 65. CERT seeks equitable relief, including providing warnings to consumers of coffee products, as well as civil penalties.

The Company, as part of a joint defense group, asserted multiple defenses against the lawsuit. On May 7, 2018, the trial court issued a ruling adverse to defendants on these defenses to liability. On October 1, 2019, before the court tried damages, remedies and attorneys' fees, California’s Office of Environmental Health Hazard Assessment adopted a regulation that exempted “Exposures to listed chemicals in coffee created by and inherent in the processes of roasting coffee beans or brewing coffee” from Proposition 65’s warning requirement. On August 25, 2020, the court granted the defense motion for summary judgment based on the regulation, and the case was dismissed.

On November 20, 2020, CERT filed a notice of appeal to appeal the ruling on the defense motion for summary judgment. On October 26, 2022, the appellate court affirmed the trial court’s decision. In December 2022, CERT appealed this ruling to the Supreme Court of the State of California, which denied the petition for review in February 2023. Until the case is dismissed by the trial court, the Company is unable to predict or reasonably estimate any potential loss or effect on the Company or its operations. Accordingly, no loss contingency was recorded for this matter.
v3.23.1
Stockholders' Equity
 3 Months Ended
Apr. 02, 2023
Equity [Abstract]  
Stockholders' Equity . Stockholders’ Equity

Share Repurchases

On March 2, 2022, the Company's board of directors authorized a new $600 million share repurchase program for its common stock. The new authorization replaced the Company's then-existing share repurchase authorization of $300 million that was due to expire on March 3, 2024, of which $99.8 million remained available upon its replacement. No further shares may be repurchased under the $300 million authorization. The following table outlines the common stock share repurchase programs authorized by the Company’s board of directors and the related repurchase activity and available authorization as of April 2, 2023.

 

Effective date

 

Expiration date

 

Amount
authorized

 

 

Cost of
repurchases

 

 

Authorization
available

 

March 2, 2022

 

December 31, 2023

 

$

600,000

 

 

$

286,472

 

 

$

313,528

 

 

The shares under the Company’s repurchase programs may be purchased on a discretionary basis from time to time through the applicable expiration date, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. The board’s authorization of the share repurchase programs does not obligate the Company to acquire any particular amount of common stock, and the repurchase programs may be commenced, suspended, or discontinued at any time.

 

Share repurchase activity under the Company’s repurchase programs for the periods indicated was as follows (total cost in thousands):

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Number of common shares acquired

 

 

3,038,411

 

 

 

1,481,187

 

Average price per common share acquired

 

$

32.64

 

 

$

30.86

 

Total cost of common shares acquired

 

$

99,171

 

 

$

45,715

 

 

Shares purchased under the Company’s repurchase programs were subsequently retired and the excess of the repurchase price over par value was charged to retained earnings. The cost of common shares repurchased during the thirteen weeks ended April 2, 2023 included the 1% excise tax imposed as part of the Inflation Reduction Act of 2022.

Subsequent to April 2, 2023 and through the date of this filing, the Company repurchased an additional 0.5 million shares of common stock for $16.0 million.
v3.23.1
Net Income Per Share
 3 Months Ended
Apr. 02, 2023
Earnings Per Share [Abstract]  
Net Income Per Share

9. Net Income Per Share

The computation of basic 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 and unvested restricted stock units ("RSUs"). Performance share awards ("PSAs") are included in the computation of diluted net income per share only to the extent that the underlying performance conditions are satisfied prior to the end of the reporting period or would be satisfied if the end of the reporting period were the end of the related performance period, and if the effect would be dilutive.

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

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Basic net income per share:

 

 

 

 

 

 

Net income

 

$

76,160

 

 

$

88,307

 

Weighted average shares outstanding

 

 

103,827

 

 

 

110,903

 

Basic net income per share

 

$

0.73

 

 

$

0.80

 

Diluted net income per share:

 

 

 

 

 

 

Net income

 

$

76,160

 

 

$

88,307

 

Weighted average shares outstanding -
   basic

 

 

103,827

 

 

 

110,903

 

Dilutive effect of share-based awards:

 

 

 

 

 

 

Assumed exercise of options to purchase shares

 

 

395

 

 

 

347

 

RSUs

 

 

481

 

 

 

470

 

PSAs

 

 

173

 

 

 

113

 

Weighted average shares and
   equivalent shares outstanding

 

 

104,876

 

 

 

111,833

 

Diluted net income per share

 

$

0.73

 

 

$

0.79

 

 

For the thirteen weeks ended April 2, 2023, the Company had 0.4 million options, 0.4 million RSUs and 0.5 million PSAs outstanding which were excluded from the computation of diluted net income per share as those awards would have been antidilutive or were performance awards with performance conditions not yet deemed met. For the thirteen weeks ended April 3, 2022, the Company had 0.2 million options, 0.5 million RSUs, and 0.5 million PSAs outstanding which were excluded from the computation of diluted net income per share as those awards would have been antidilutive or were performance awards with performance conditions not yet deemed met.
v3.23.1
Derivative Financial Instruments
 3 Months Ended
Apr. 02, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments . Derivative Financial Instruments

The Company did not have any outstanding interest rate swap agreements as of April 2, 2023 and January 1, 2023.

In December 2017, the Company entered into an interest rate swap agreement to manage its cash flow associated with variable interest rates. This forward contract was designated and qualified as a cash flow hedge, and its change in fair value was recorded as a component of other comprehensive income and reclassified into earnings in the same period or periods in which the forecasted transaction occurred. The forward contract consisted of five cash flow hedges with a notional dollar amount of $250.0 million, and each had a length of one year and matured annually from 2018 to 2022.

The gain or loss on these derivative instruments was recognized in other comprehensive income, net of tax, with the portion related to current period interest payments reclassified to interest expense, net on the consolidated statements of income. The following table summarizes these losses classified on the consolidated statements of income:

 

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Consolidated Statements of
   Income Classification

 

 

 

 

 

 

Interest expense, net

 

$

—

 

 

$

1,468

 
v3.23.1
Comprehensive Income
 3 Months Ended
Apr. 02, 2023
Equity [Abstract]  
Comprehensive Income

11. Comprehensive Income

The following table presents the changes in accumulated other comprehensive income (loss) for the thirteen weeks ended April 3, 2022.

 

 

 

Cash Flow
Hedges

 

Balance at January 2, 2022

 

$

(3,758

)

Other comprehensive income (loss), net of tax

 

 

 

Unrealized gains on cash flow hedging activities, net of income tax of $1,240

 

 

3,586

 

Reclassification of net losses on cash flow hedges to net income, net of income
    tax of ($377)

 

 

(1,091

)

Total other comprehensive income (loss)

 

 

2,495

 

Balance at April 3, 2022

 

$

(1,263

)

 

Amounts reclassified from accumulated other comprehensive income (loss) were included within interest expense, net on the consolidated statements of income.

v3.23.1
Business Combination
 3 Months Ended
Apr. 02, 2023
Business Combination, Description [Abstract]  
Business Combination Business Combination

On March 20, 2023, the Company completed its acquisition of Ronald Cohn, Inc., a corporation that owned two stores located in California operating under the ‘Sprouts Farmers Market’ name pursuant to a legacy trademark license arrangement. The aggregate consideration paid in the transaction consisted of 0.6 million of the Company’s common shares valued at $18.1 million using the closing price of the Company's common stock on March 20, 2023 and cash consideration of $13.0 million, subject to customary post-closing adjustments.

The Company accounted for this transaction as a business combination in accordance with the acquisition method of accounting, which requires that the purchase price be allocated to the assets and liabilities acquired based on their estimated fair values as of the acquisition date. Acquisition-related costs were immaterial and were expensed as incurred. The financial results of the acquired stores have been included in the Company’s consolidated financial statements from the date of acquisition. The acquired stores' results of operations were not material to the Company's consolidated results during the thirteen weeks ended April 2, 2023.

As of May 1, 2023, the initial accounting for this acquisition was incomplete pending determination of working capital adjustments and the fair value of certain assets acquired and liabilities assumed. The net purchase price was initially allocated to the net tangible assets of ($4.9) million and a reacquired right intangible asset of $23.1 million based on their preliminary fair values on the acquisition date. The remaining unallocated net purchase price of $12.9 million was recorded as goodwill. Goodwill represents the future economic benefits to the Company from the acquisition, which include the Company's ability to fully control the Sprouts Farmers Market brand by termination of the legacy trademark license agreement and allowing further expansion opportunities in Southern California. The goodwill is not expected to be deductible for tax purposes. The provisional fair value estimates are subject to adjustment as additional information is obtained within the measurement period, which may not exceed twelve months from the acquisition date.
v3.23.1
Segments
 3 Months Ended
Apr. 02, 2023
Segment Reporting [Abstract]  
Segments

12. Segments

The Company has one reportable and one operating segment.

In accordance with ASC 606, the following table represents a disaggregation of revenue for the thirteen weeks ended April 2, 2023 and April 3, 2022.

 

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Perishables

 

$

999,575

 

 

 

57.7

%

 

$

952,087

 

 

 

58.0

%

Non-Perishables

 

 

733,735

 

 

 

42.3

%

 

 

689,074

 

 

 

42.0

%

Net Sales

 

$

1,733,310

 

 

 

100.0

%

 

$

1,641,161

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company categorizes the varieties of products it sells as perishable and non-perishable. Perishable product categories include produce, meat and meat alternatives, seafood, deli, bakery, floral and dairy and dairy alternatives. Non-perishable product categories include grocery, vitamins and supplements, bulk items, frozen foods, beer and wine, and natural health and body care.

v3.23.1
Share-Based Compensation
 3 Months Ended
Apr. 02, 2023
Share-Based Payment Arrangement [Abstract]  
Share-Based Compensation

13. Share-Based Compensation

2022 Incentive Plan

In March 2022, the Company’s board of directors adopted the Sprouts Farmers Market, Inc. 2022 Omnibus Incentive Compensation Plan (the “2022 Incentive Plan”), which became effective May 25, 2022, upon approval by the Company’s stockholders. The 2022 Incentive Plan provides team members of the Company, certain consultants and advisors who perform services for the Company, and non-employee members of the Company's board of directors with the opportunity to receive grants of equity awards, including stock options, RSUs, PSAs, and other stock-based awards. The 2022 Incentive Plan replaced the 2013 Incentive Plan (as described below).

Awards Granted under the 2022 Incentive Plan

During the thirteen weeks ended April 2, 2023, the Company granted the following share-based compensation awards under the 2022 Incentive Plan:

 

Grant Date

 

RSUs

 

 

PSAs

 

 

Options

 

March 14, 2023

 

 

491,729

 

 

 

172,059

 

 

 

221,085

 

Total

 

 

491,729

 

 

 

172,059

 

 

 

221,085

 

Weighted-average grant date fair value

 

$

32.95

 

 

$

32.95

 

 

$

12.63

 

Weighted-average exercise price

 

$

—

 

 

$

—

 

 

$

32.95

 

 

The aggregate number of shares of common stock that may be issued to team members and directors under the 2022 Incentive Plan may not exceed 6,600,000, subject to the following adjustments. If any awards granted under the 2022 Incentive Plan, terminate, expire, or are cancelled, forfeited, exchanged, or surrendered without having been exercised, vested or paid in shares, the shares will again be available for purposes of the 2022 Incentive Plan. In addition, the number of shares subject to outstanding awards under the Sprouts Farmers Market, Inc. 2013 Incentive Plan (the “2013 Incentive Plan”) that terminate, expire, are paid in cash, or are cancelled, forfeited, exchanged, or surrendered without having been exercised, vested, or paid in shares under the 2013 Incentive Plan after the effective date of the 2022 Incentive Plan will be available for issuance under the 2022 Incentive Plan. As of April 2, 2023, there were 971,034 stock awards outstanding and 5,749,809 shares remaining available for issuance under the 2022 Incentive Plan.

2013 Incentive Plan

Prior to the adoption of the 2022 Incentive Plan, the 2013 Incentive Plan served as the umbrella plan for the Company’s share-based and cash-based incentive compensation programs for its directors, officers and other team members. Upon stockholder approval of the 2022 Incentive Plan on May 25, 2022, no further awards will be granted under the 2013 Incentive Plan, but awards outstanding under the 2013 Incentive Plan will remain outstanding in accordance with their terms and the terms of the 2013 Incentive Plan.

Stock 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.

Time-based options vest annually over a period of three years.

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

PSAs granted in 2019 were subject to the Company achieving certain EBIT performance targets for the 2021 fiscal year. The criteria was based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. The performance conditions with respect to fiscal year 2021 EBIT were deemed to have been met, and the PSAs vested at the maximum pay out level on the third anniversary of the grant date (March 2022). There were no outstanding 2019 PSAs as of April 2, 2023.

PSAs granted in 2020 were subject to the Company achieving certain earnings before taxes (“EBT”) performance targets for the 2022 fiscal year. The criteria was based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. The performance conditions with respect to fiscal year 2022 EBT were deemed to have been met, and the PSAs vested at the maximum pay out level on the third anniversary of the grant date (March 2023). During the thirteen weeks ended April 2, 2023, 268,699 of the 2020 PSAs vested. There were no outstanding 2020 PSAs as of April 2, 2023.

PSAs granted in 2021 are subject to the Company achieving certain EBIT performance targets for the 2023 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. If performance conditions are met, the applicable number of performance shares will vest on the third anniversary of the grant date (March 2024).

PSAs granted in 2022 are subject to the Company achieving certain EBIT performance targets for the 2024 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. If performance conditions are met, the applicable number of performance shares will vest on the third anniversary of the grant date (March 2025).

PSAs granted in 2023 are subject to the Company achieving certain EBIT performance targets for the 2025 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. If performance conditions are met, the applicable number of performance shares will vest on the third anniversary of the grant date (March 2026).

Share-based Compensation Expense

The Company presents share-based compensation expense in selling, general and administrative expenses on the Company’s consolidated statements of income. The amount recognized was as follows:

 

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Share-based compensation expense

 

$

3,852

 

 

$

4,456

 

 

The following share-based awards were outstanding as of April 2, 2023 and April 3, 2022:

 

 

 

As of

 

 

 

April 2, 2023

 

 

April 3, 2022

 

 

 

(in thousands)

 

Options

 

 

 

 

 

 

Vested

 

 

740

 

 

 

376

 

Unvested

 

 

481

 

 

 

1,088

 

RSUs

 

 

1,156

 

 

 

1,083

 

PSAs

 

 

471

 

 

 

491

 

 

As of April 2, 2023, total unrecognized compensation expense and remaining weighted average recognition period related to outstanding share-based awards were as follows:

 

 

 

Unrecognized
compensation
expense

 

 

Remaining
weighted
average
recognition
period

 

Options

 

$

5,062

 

 

 

2.2

 

RSUs

 

 

28,583

 

 

 

1.8

 

PSAs

 

 

7,149

 

 

 

2.0

 

Total unrecognized compensation expense at April 2, 2023

 

$

40,794

 

 

 

 

 

During the thirteen weeks ended April 2, 2023 and April 3, 2022, the Company received $5.5 million and $2.6 million, respectively, in cash proceeds from the exercise of options.

v3.23.1
Store Closures
 3 Months Ended
Apr. 02, 2023
Store Closures [Abstract]  
Store Closure

15. Store Closures

In February 2023, the Company's board of directors approved the closing of 11 stores during 2023. These stores, on average, are approximately 30% larger than the Company's current prototype format and were underperforming financially. The closure of these stores resulted in a charge of $27.8 million during the thirteen weeks ended April 2, 2023 related to the impairment of leasehold improvements and right-of-use assets and is reflected in Store closure and other costs, net on the consolidated statements of income. The impairment charge represents the excess of the carrying value over the estimated fair value of each store's asset group. Accelerated depreciation on the closed stores' assets is expected to be approximately $6.0 million, of which $4.0 million was incurred during the thirteen weeks ended April 2, 2023 and is reflected in Depreciation and amortization on the consolidated statements of income. Severance expense was immaterial during the thirteen weeks ended April 2, 2023, and no further severance expense is expected to be incurred.

v3.23.1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Apr. 02, 2023
Accounting Policies [Abstract]  
Fiscal Years

The Company reports its results of operations on a 52- or 53-week fiscal calendar ending on the Sunday closest to December 31. The fiscal year ending December 31, 2023 (“fiscal year 2023”) and fiscal year 2022 are 52-week years. The Company reports its results of operations on a 13-week quarter, except for 53-week fiscal years (in which the fourth quarter has 14 weeks).
Revenue Recognition

Revenue Recognition

The Company’s performance obligations are satisfied upon the transfer of goods to the customer, which occurs at the point of sale, and payment from customers is also due at the time of sale. Proceeds from the sale of gift cards are recorded as a liability at the time of sale and recognized as sales when they are redeemed by the customer and the performance obligation is satisfied by the Company. The Company’s gift cards do not expire. Based on historical redemption rates, a small and relatively stable percentage of gift cards will never be redeemed, referred to as "breakage." Estimated breakage revenue is recognized over time in proportion to actual gift card redemptions and was not material in any period presented. A summary of the activity and balances in the gift card liability, net is as follows:

 

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Balance, beginning of year

 

$

10,906

 

 

$

12,586

 

Gift cards issued during the period but not redeemed (1)

 

 

1,222

 

 

 

1,192

 

Revenue recognized from beginning liability

 

 

(2,582

)

 

 

(3,276

)

Balance, end of year

 

$

9,546

 

 

$

10,502

 

(1) net of estimated breakage

The nature of goods the Company transfers to customers at the point of sale are inventories, consisting of merchandise purchased for resale.

The Company does not have any material contract assets or receivables from contracts with customers, any revenue recognized in the current period from performance obligations satisfied in previous periods, any contract performance obligations, or any material costs to obtain or fulfill a contract as of April 2, 2023.

Restricted Cash

Restricted Cash

Restricted cash relates to the Company's defined benefit plan forfeitures and the Company's healthcare, general liability and workers’ compensation plan benefits of approximately $1.9 million and $2.0 million as of April 2, 2023 and January 1, 2023, respectively. These balances are included in prepaid expenses and other current assets in the consolidated balance sheets.
Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted

No new accounting pronouncements issued or effective during the thirteen weeks ended April 2, 2023 had, or are expected to have, a material impact on the Company’s consolidated financial statements.
v3.23.1
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Apr. 02, 2023
Schedule of Estimated Breakage Revenue Recognized A summary of the activity and balances in the gift card liability, net is as follows:

 

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Balance, beginning of year

 

$

10,906

 

 

$

12,586

 

Gift cards issued during the period but not redeemed (1)

 

 

1,222

 

 

 

1,192

 

Revenue recognized from beginning liability

 

 

(2,582

)

 

 

(3,276

)

Balance, end of year

 

$

9,546

 

 

$

10,502

 

(1) net of estimated breakage
v3.23.1
Fair Value Measurements (Tables)
 3 Months Ended
Apr. 02, 2023
Fair Value Disclosures [Abstract]  
Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis

The following tables present the fair value hierarchy for the Company’s financial liabilities measured at fair value on a recurring basis as of April 2, 2023 and January 1, 2023:

 

April 2, 2023

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Long-term debt

 

$

—

 

 

$

225,000

 

 

$

—

 

 

$

225,000

 

Total financial liabilities

 

$

—

 

 

$

225,000

 

 

$

—

 

 

$

225,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2023

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Long-term debt

 

$

—

 

 

$

250,000

 

 

$

—

 

 

$

250,000

 

Total financial liabilities

 

$

—

 

 

$

250,000

 

 

$

—

 

 

$

250,000

 
v3.23.1
Long-Term Debt and Finance Lease Liabilities (Tables)
 3 Months Ended
Apr. 02, 2023
Long Term Debt And Finance Lease Liabilities [Abstract]  
Summary of Long-Term Debt and Finance Lease Liabilities

A summary of long-term debt and finance lease liabilities is as follows:

 

 

 

 

 

 

 

As of

 

Facility

 

Maturity

 

Interest Rate

 

April 2, 2023

 

 

January 1, 2023

 

Senior secured debt

 

 

 

 

 

 

 

 

 

 

$700.0 million Credit Agreement

 

March 25, 2027

 

Variable

 

$

225,000

 

 

$

250,000

 

Finance lease liabilities

 

Various

 

n/a

 

 

8,720

 

 

 

8,902

 

Long-term debt and finance lease liabilities

 

 

 

 

 

$

233,720

 

 

$

258,902

 
v3.23.1
Stockholders' Equity (Tables)
 3 Months Ended
Apr. 02, 2023
Equity [Abstract]  
Schedule of Common Stock Share Repurchase Programs Authorized by Board of Directors from Time to Time and Related Repurchase Activity and Available Authorized The following table outlines the common stock share repurchase programs authorized by the Company’s board of directors and the related repurchase activity and available authorization as of April 2, 2023.

 

Effective date

 

Expiration date

 

Amount
authorized

 

 

Cost of
repurchases

 

 

Authorization
available

 

March 2, 2022

 

December 31, 2023

 

$

600,000

 

 

$

286,472

 

 

$

313,528

 
Schedule of Share Repurchase Activity Under Share Repurchase Programs

Share repurchase activity under the Company’s repurchase programs for the periods indicated was as follows (total cost in thousands):

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Number of common shares acquired

 

 

3,038,411

 

 

 

1,481,187

 

Average price per common share acquired

 

$

32.64

 

 

$

30.86

 

Total cost of common shares acquired

 

$

99,171

 

 

$

45,715

 
v3.23.1
Net Income Per Share (Tables)
 3 Months Ended
Apr. 02, 2023
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

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Basic net income per share:

 

 

 

 

 

 

Net income

 

$

76,160

 

 

$

88,307

 

Weighted average shares outstanding

 

 

103,827

 

 

 

110,903

 

Basic net income per share

 

$

0.73

 

 

$

0.80

 

Diluted net income per share:

 

 

 

 

 

 

Net income

 

$

76,160

 

 

$

88,307

 

Weighted average shares outstanding -
   basic

 

 

103,827

 

 

 

110,903

 

Dilutive effect of share-based awards:

 

 

 

 

 

 

Assumed exercise of options to purchase shares

 

 

395

 

 

 

347

 

RSUs

 

 

481

 

 

 

470

 

PSAs

 

 

173

 

 

 

113

 

Weighted average shares and
   equivalent shares outstanding

 

 

104,876

 

 

 

111,833

 

Diluted net income per share

 

$

0.73

 

 

$

0.79

 
v3.23.1
Derivative Financial Instruments (Tables)
 3 Months Ended
Apr. 02, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of Losses of Derivative Instruments The following table summarizes these losses classified on the consolidated statements of income:

 

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Consolidated Statements of
   Income Classification

 

 

 

 

 

 

Interest expense, net

 

$

—

 

 

$

1,468

 
v3.23.1
Comprehensive Income (Tables)
 3 Months Ended
Apr. 02, 2023
Equity [Abstract]  
Schedule of Changes in Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income (loss) for the thirteen weeks ended April 3, 2022.

 

 

 

Cash Flow
Hedges

 

Balance at January 2, 2022

 

$

(3,758

)

Other comprehensive income (loss), net of tax

 

 

 

Unrealized gains on cash flow hedging activities, net of income tax of $1,240

 

 

3,586

 

Reclassification of net losses on cash flow hedges to net income, net of income
    tax of ($377)

 

 

(1,091

)

Total other comprehensive income (loss)

 

 

2,495

 

Balance at April 3, 2022

 

$

(1,263

)

 
v3.23.1
Segments (Tables)
 3 Months Ended
Apr. 02, 2023
Segment Reporting [Abstract]  
Summary of Disaggregation of Revenue

In accordance with ASC 606, the following table represents a disaggregation of revenue for the thirteen weeks ended April 2, 2023 and April 3, 2022.

 

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Perishables

 

$

999,575

 

 

 

57.7

%

 

$

952,087

 

 

 

58.0

%

Non-Perishables

 

 

733,735

 

 

 

42.3

%

 

 

689,074

 

 

 

42.0

%

Net Sales

 

$

1,733,310

 

 

 

100.0

%

 

$

1,641,161

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 
v3.23.1
Share-Based Compensation (Tables)
 3 Months Ended
Apr. 02, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Summary of Share-Based Compensation Expense in Selling, General and Administrative Expenses

The Company presents share-based compensation expense in selling, general and administrative expenses on the Company’s consolidated statements of income. The amount recognized was as follows:

 

 

 

Thirteen weeks ended

 

 

 

April 2, 2023

 

 

April 3, 2022

 

Share-based compensation expense

 

$

3,852

 

 

$

4,456

 

 
Summary of Outstanding Share-Based Awards

The following share-based awards were outstanding as of April 2, 2023 and April 3, 2022:

 

 

 

As of

 

 

 

April 2, 2023

 

 

April 3, 2022

 

 

 

(in thousands)

 

Options

 

 

 

 

 

 

Vested

 

 

740

 

 

 

376

 

Unvested

 

 

481

 

 

 

1,088

 

RSUs

 

 

1,156

 

 

 

1,083

 

PSAs

 

 

471

 

 

 

491

 

 
Summary of Total Unrecognized Compensation Expense and Remaining Weighted Average Recognition Period Related to Outstanding Share-Based Awards

As of April 2, 2023, total unrecognized compensation expense and remaining weighted average recognition period related to outstanding share-based awards were as follows:

 

 

 

Unrecognized
compensation
expense

 

 

Remaining
weighted
average
recognition
period

 

Options

 

$

5,062

 

 

 

2.2

 

RSUs

 

 

28,583

 

 

 

1.8

 

PSAs

 

 

7,149

 

 

 

2.0

 

Total unrecognized compensation expense at April 2, 2023

 

$

40,794

 

 

 

 

 
Awards Granted under the 2022 Incentive Plan [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Summary of Share-Based Compensation Awards Granted

During the thirteen weeks ended April 2, 2023, the Company granted the following share-based compensation awards under the 2022 Incentive Plan:

 

Grant Date

 

RSUs

 

 

PSAs

 

 

Options

 

March 14, 2023

 

 

491,729

 

 

 

172,059

 

 

 

221,085

 

Total

 

 

491,729

 

 

 

172,059

 

 

 

221,085

 

Weighted-average grant date fair value

 

$

32.95

 

 

$

32.95

 

 

$

12.63

 

Weighted-average exercise price

 

$

—

 

 

$

—

 

 

$

32.95

 

 
v3.23.1
Goodwill (Tables)
 3 Months Ended
Apr. 02, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of goodwill

A summary of the activity and balances in goodwill is as follows:

 

 

 

Balance at January 1, 2023

 

 

Additions

 

 

Balance at April 2, 2023

 

Goodwill

 

$

368,878

 

 

$

12,873

 

 

$

381,751

 
v3.23.1
Basis of Presentation - Additional Information (Detail)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
USD ($)
State
Store
Apr. 03, 2022
USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Operating stores | Store 395  
Number of states entity operates | State 23  
Proceeds from revolving credit facilities $ 0 $ 62,500
Payments on revolving credit facilities $ (25,000) $ (62,500)
v3.23.1
Summary of Significant Accounting Policies - Schedule of Estimated Breakage Revenue Recognized (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Disaggregation Of Revenue [Line Items]    
Net gift card liability beginning balance $ 10,906 $ 12,586
Gift cards issued during current period but not redeemed [1] 1,222 1,192
Revenue recognized from beginning liability (2,582) (3,276)
Net gift card liability ending balance $ 9,546 $ 10,502
[1] net of estimated breakage
v3.23.1
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)
$ in Millions
Apr. 02, 2023
Jan. 01, 2023
Oct. 02, 2022
ASU no. 2021-01 [Member]      
Summary Of Significant Accounting Policy [Line Items]      
Change in accounting principle, ASU, adopted     true
Prepaid Expenses and Other Current Assets [Member]      
Summary Of Significant Accounting Policy [Line Items]      
Restricted cash related to defined benefit plan forfeitures and healthcare, general liability and workers’ compensation plan benefits $ 1.9 $ 2.0  
v3.23.1
Fair Value Measurements - Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis (Detail) - Recurring [Member] - USD ($)
$ in Thousands
Apr. 02, 2023
Jan. 01, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Long-term debt $ 225,000 $ 250,000
Total financial liabilities 225,000 250,000
Level 2 [Member]    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Long-term debt 225,000 250,000
Total financial liabilities $ 225,000 $ 250,000
v3.23.1
Long-Term Debt and Finance Lease Liabilities - Summary of Long-Term Debt and Finance Lease Liabilities (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Jan. 01, 2023
Long Term Debt And Finance Lease Liabilities [Line Items]    
Finance lease liabilities $ 8,720 $ 8,902
Long-term debt and finance lease liabilities 233,720 258,902
Senior Lien [Member] | Secured Debt [Member] | $700.0 million Credit Agreement [Member]    
Long Term Debt And Finance Lease Liabilities [Line Items]    
Long-term debt $ 225,000 $ 250,000
Debt instrument maturity Mar. 25, 2027  
Debt instrument, Interest Rate Variable  
v3.23.1
Long-Term Debt and Finance Lease Liabilities - Summary of Long-Term Debt and Finance Lease Liabilities (Parenthetical) (Detail)
$ in Millions
Apr. 02, 2023
USD ($)
Senior Lien [Member] | Secured Debt [Member] | $700.0 million Credit Agreement [Member]  
Long Term Debt And Finance Lease Liabilities [Line Items]  
Debt instrument face amount $ 700.0
v3.23.1
Long-Term Debt and Finance Lease Liabilities - Additional Information (Detail) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Apr. 28, 2023
Apr. 02, 2023
Apr. 03, 2022
Jan. 01, 2023
Jan. 01, 2023
May 01, 2023
Mar. 25, 2022
Mar. 27, 2018
Long Term Debt And Finance Lease Liabilities [Line Items]                
Borrowings during the period   $ 0 $ 62,500          
Change in line of credit during period         $ 62,500      
Credit Agreement [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Participation fee   1.00%            
Issuance fee   0.125%            
Credit facility termination date   Mar. 25, 2027            
Borrowings during the period   $ 0     0      
Principal payments on the Credit Facility   25,000   $ 0        
Borrowings under credit facilities   $ 225,000   $ 250,000 $ 250,000      
Net leverage ratio   375.00%            
Interest coverage ratio   3.00%            
Credit Agreement [Member] | Subsequent Event [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Principal payments on the Credit Facility $ 25,000              
Borrowings under credit facilities           $ 200,000    
Secured Debt [Member] | Credit Agreement [Member] | SOFR [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Interest rate spread on base rate   0.10%            
Secured Debt [Member] | Current Credit Facility Agreement [Member] | SOFR [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Interest rate spread on base rate   1.00%            
Senior Lien [Member] | Secured Debt [Member] | Credit Agreement [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Debt instrument face amount   $ 70,000            
Letters of credit issued   $ 21,600            
Interest rate spread on base rate   0.05%            
Credit facility commitment fee percentage subject to upward or downward adjustments   0.01%            
Senior Lien [Member] | Secured Debt [Member] | Credit Agreement [Member] | SOFR [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Line of credit interest rate terms   at the Company's option, either at the Term SOFR (with a floor of 0.00%) plus a 0.10% SOFR adjustment and 1.00% per annum or base rate (with a floor of 0.00%) plus 0.00% per annum.            
Senior Lien [Member] | Secured Debt [Member] | Credit Agreement [Member] | Prime Plus [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Interest rate spread on base rate   0.00%            
Senior Lien [Member] | Secured Debt [Member] | Credit Agreement [Member] | Minimum [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Credit facility unused commitment fee percentage   0.10%            
Senior Lien [Member] | Secured Debt [Member] | Credit Agreement [Member] | Maximum [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Credit facility unused commitment fee percentage   0.225%            
Senior Lien [Member] | Secured Debt [Member] | Credit Agreement [Member] | Swingline Loan Sub-facility [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Debt instrument face amount   $ 50,000            
Senior Lien [Member] | Secured Debt [Member] | Current Credit Facility Agreement [Member] | SOFR [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Interest rate spread on base rate   0.10%            
Senior Lien [Member] | Secured Debt [Member] | Current Credit Facility Agreement [Member] | Secured Overnight Financing Rate [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Interest rate spread on base rate   1.00%            
Senior Lien [Member] | Secured Debt [Member] | Former Credit Facility [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Capitalized debt issuance costs               $ 500
Senior Lien [Member] | Secured Debt [Member] | $700.0 million Credit Facility [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Debt instrument face amount   $ 700,000            
Senior Lien [Member] | Secured Debt [Member] | $700.0 million Credit Facility [Member] | Credit Agreement [Member]                
Long Term Debt And Finance Lease Liabilities [Line Items]                
Credit facility maximum borrowing capacity             $ 700,000  
Capitalized debt issuance costs             $ 3,400  
v3.23.1
Income Taxes - Additional Information (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Income Tax Disclosure [Abstract]    
Effective tax rate 23.30% 24.30%
Excess tax benefits of equity-based compensation $ 2.6 $ 1.5
v3.23.1
Commitments and Contingencies - Additional Information (Detail)
Apr. 13, 2010
Defendant
Superior Court of State of California and County of Los Angeles [Member]  
Other Commitments [Line Items]  
Number of defendants 80
v3.23.1
Stockholders' Equity - Additional Information (Detail) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended
May 01, 2023
Apr. 02, 2023
Mar. 02, 2022
Equity Class Of Treasury Stock [Line Items]      
Common stock repurchased during the period, value $ 16,000    
Excise tax   1.00%  
Subsequent Event [Member]      
Equity Class Of Treasury Stock [Line Items]      
Common stock repurchased during the period, shares 0.5    
March 3, 2021 Share Repurchase Program [Member]      
Equity Class Of Treasury Stock [Line Items]      
Shares authorized to be repurchased   $ 300,000  
Authorization available     $ 99,800
March 2, 2022 [Member]      
Equity Class Of Treasury Stock [Line Items]      
Shares authorized to be repurchased   600,000  
Authorization available   $ 313,528  
v3.23.1
Stockholders' Equity - Schedule of Common Stock Share Repurchase Programs Authorized by Board of Directors from Time to Time and Related Repurchase Activity and Available Authorized (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Mar. 02, 2022
Equity Class Of Treasury Stock [Line Items]      
Cost of repurchases $ 98,349 $ 45,715  
March 3, 2021 [Member]      
Equity Class Of Treasury Stock [Line Items]      
Amount authorized $ 300,000    
Authorization available     $ 99,800
March 2, 2022 [Member]      
Equity Class Of Treasury Stock [Line Items]      
Effective date Mar. 02, 2022    
Expiration date Dec. 31, 2023    
Amount authorized $ 600,000    
Cost of repurchases 286,472    
Authorization available $ 313,528    
v3.23.1
Stockholders' Equity - Schedule of Share Repurchase Activity under Share Repurchase Programs (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Equity [Abstract]    
Number of common shares acquired 3,038,411 1,481,187
Average price per common share acquired $ 32.64 $ 30.86
Total cost of common shares acquired $ 99,171 $ 45,715
v3.23.1
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
Apr. 02, 2023
Apr. 03, 2022
Basic net income per share:    
Basic net income per share $ 0.73 $ 0.80
Diluted net income per share:    
Net income $ 76,160 $ 88,307
Weighted average shares outstanding - basic 103,827 110,903
Dilutive effect of share-based awards:    
Assumed exercise of options to purchase shares 395 347
Weighted average shares and equivalent shares outstanding 104,876 111,833
Diluted net income per share $ 0.73 $ 0.79
RSUs [Member]    
Dilutive effect of share-based awards:    
Dilutive effect 481 470
PSAs [Member]    
Dilutive effect of share-based awards:    
Dilutive effect 173 113
v3.23.1
Net Income Per Share - Additional Information (Detail) - shares
shares in Millions
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Stock option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive securities 0.4 0.2
RSUs [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive securities 0.4 0.5
PSAs [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive securities 0.5 0.5
v3.23.1
Derivative Financial Instruments - Additional Information (Detail) - Forward Contract [Member]
$ in Millions
 1 Months Ended
Dec. 31, 2017
USD ($)
Hedge
Apr. 02, 2023
Swap
Jan. 01, 2023
Swap
Derivative [Line Items]      
Derivative, number of cash flow hedges | Hedge 5    
Number of outstanding swaps | Swap   0 0
Cash Flow Hedges [Member]      
Derivative [Line Items]      
Derivative, notional amount of outstanding swaps | $ $ 250.0    
Derivative, cash flow swaps length period 1 year    
Cash flow swaps mature annually, starting year 2018    
Cash flow swaps mature annually, ending year 2022    
v3.23.1
Derivative Financial Instruments - Summary of Fair Value of Derivative Instruments (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Derivatives Fair Value [Line Items]    
Interest expense, net $ 1,468
v3.23.1
Derivative Financial Instruments - Summary of Losses of Derivative Instruments (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Derivative Instruments Gain Loss [Line Items]    
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Interest Income (Expense), Net Interest Income (Expense), Net
Interest expense, net $ 1,468
v3.23.1
Comprehensive Income - Changes In Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Accumulated Other Comprehensive Income Loss [Line Items]    
Beginning Balance $ 1,046,462 $ 959,876
Other comprehensive income (loss), net of tax    
Unrealized gains on cash flow hedging activities, net of income tax of $1,240 0 3,586
Reclassification of net gains (losses) on cash flow hedges to net income, net of income tax of ($377) 0 (1,091)
Total other comprehensive income (loss) 0 2,495
Ending Balance $ 1,050,930 1,011,974
Cash Flow Hedges [Member]    
Accumulated Other Comprehensive Income Loss [Line Items]    
Beginning Balance   (3,758)
Other comprehensive income (loss), net of tax    
Unrealized gains on cash flow hedging activities, net of income tax of $1,240   3,586
Reclassification of net gains (losses) on cash flow hedges to net income, net of income tax of ($377)   1,091
Total other comprehensive income (loss)   2,495
Ending Balance   $ (1,263)
v3.23.1
Comprehensive Income - Changes In Accumulated Other Comprehensive Income (Loss) (Parenthetical) (Details)
$ in Thousands
 3 Months Ended
Apr. 03, 2022
USD ($)
Accumulated Other Comprehensive Income Loss [Line Items]  
Income tax expenses (Benefit) on cash flow hedging activities $ 1,240
Income tax expenses (Benefit) for reclassification of net gains (losses) on cash flow hedges (377)
Cash Flow Hedges [Member]  
Accumulated Other Comprehensive Income Loss [Line Items]  
Income tax expenses (Benefit) on cash flow hedging activities 1,240
Income tax expenses (Benefit) for reclassification of net gains (losses) on cash flow hedges $ (377)
v3.23.1
Segments - Additional Information (Detail)
 3 Months Ended
Apr. 02, 2023
Segment
Segment Reporting [Abstract]  
Number of reportable segment 1
Number of operating segment 1
v3.23.1
Segments - Summary of Disaggregation of Revenue (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Disaggregation Of Revenue [Line Items]    
Net Sales, amount $ 1,733,310 $ 1,641,161
Sales Revenue, Goods, Net [Member] | Product Concentration Risk [Member]    
Disaggregation Of Revenue [Line Items]    
Net Sales, percentage 100.00% 100.00%
Perishables [Member]    
Disaggregation Of Revenue [Line Items]    
Net Sales, amount $ 999,575 $ 952,087
Perishables [Member] | Sales Revenue, Goods, Net [Member] | Product Concentration Risk [Member]    
Disaggregation Of Revenue [Line Items]    
Net Sales, percentage 57.70% 58.00%
Non-Perishables [Member]    
Disaggregation Of Revenue [Line Items]    
Net Sales, amount $ 733,735 $ 689,074
Non-Perishables [Member] | Sales Revenue, Goods, Net [Member] | Product Concentration Risk [Member]    
Disaggregation Of Revenue [Line Items]    
Net Sales, percentage 42.30% 42.00%
v3.23.1
Share-Based Compensation - Summary of Stock-Based Compensation Awards Granted (Detail) - Awards Granted under the 2022 Incentive Plan [Member]
 3 Months Ended
Apr. 02, 2023
$ / shares
shares
RSUs [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Shares of common stock | shares 491,729
Weighted-average grant date fair value | $ / shares $ 32.95
Weighted-average exercise price | $ / shares $ 0
PSAs [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Shares of common stock | shares 172,059
Weighted-average grant date fair value | $ / shares $ 32.95
Weighted-average exercise price | $ / shares $ 0
Options [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Shares of common stock | shares 221,085
Weighted-average grant date fair value | $ / shares $ 12.63
Weighted-average exercise price | $ / shares $ 32.95
March 14, 2023 Member | RSUs [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Shares of common stock | shares 491,729
March 14, 2023 Member | PSAs [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Shares of common stock | shares 172,059
March 14, 2023 Member | Options [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Shares of common stock | shares 221,085
v3.23.1
Share-Based Compensation - Additional Information (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Proceeds from exercise of stock options $ 5,488 $ 2,555
Options [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Proceeds from exercise of stock options $ 5,500 $ 2,600
RSUs [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number of shares, outstanding 1,156,000 1,083,000
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  
PSAs [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number of shares, outstanding 471,000 491,000
PSAs [Member] | 2019 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Share Outstanding 0  
Performance stock awards description The criteria was based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted.  
PSAs [Member] | 2020 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Share Outstanding 0  
Performance stock awards description The criteria was based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted.  
Awards vested 268,699  
PSAs [Member] | 2021 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards description The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted.  
PSAs [Member] | 2022 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards description The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted.  
PSAs [Member] | 2023 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards description The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted.  
PSAs [Member] | Minimum [Member] | 2019 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 0.00%  
PSAs [Member] | Minimum [Member] | 2020 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 0.00%  
PSAs [Member] | Minimum [Member] | 2021 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 0.00%  
PSAs [Member] | Minimum [Member] | 2022 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 0.00%  
PSAs [Member] | Minimum [Member] | 2023 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 0.00%  
PSAs [Member] | Maximum [Member] | 2019 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 200.00%  
PSAs [Member] | Maximum [Member] | 2020 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 200.00%  
PSAs [Member] | Maximum [Member] | 2021 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 200.00%  
PSAs [Member] | Maximum [Member] | 2022 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 200.00%  
PSAs [Member] | Maximum [Member] | 2023 [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Performance stock awards payout percentage of shares granted 200.00%  
Third Anniversary [Member] | Options [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 3 years  
Awards Granted under the 2022 Incentive Plan [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number of shares authorized for issuance under plan 6,600,000  
Number Of Share Outstanding 971,034  
Remaining shares available for issuance 5,749,809  
v3.23.1
Share-Based Compensation - Summary of Share-Based Compensation Expense in Selling, General and Administrative Expenses (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
Apr. 03, 2022
Share-Based Payment Arrangement [Abstract]    
Share-based compensation expense $ 3,852 $ 4,456
v3.23.1
Share-Based Compensation - Summary of Outstanding Share-Based Awards (Detail) - shares
shares in Thousands
Apr. 02, 2023
Apr. 03, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vested options, outstanding 740 376
Unvested options, outstanding 481 1,088
RSUs [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Equity-based awards other than options, outstanding 1,156 1,083
PSAs [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Equity-based awards other than options, outstanding 471 491
v3.23.1
Share-Based Compensation - Summary of Total Unrecognized Compensation Expense and Remaining Weighted Average Recognition Period Related to Outstanding Share-Based Awards (Detail)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Total unrecognized compensation expense at April 2, 2023 $ 40,794
Options [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Total unrecognized compensation expense at April 2, 2023 $ 5,062
Remaining weighted average recognition period 2 years 2 months 12 days
RSUs [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Total unrecognized compensation expense at April 2, 2023 $ 28,583
Remaining weighted average recognition period 1 year 9 months 18 days
PSAs [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Total unrecognized compensation expense at April 2, 2023 $ 7,149
Remaining weighted average recognition period 2 years
v3.23.1
Goodwill (Additional Information) (Details) - USD ($)
$ in Thousands
Apr. 02, 2023
Jan. 01, 2023
Goodwill and Intangible Assets Disclosure [Abstract]    
Goodwill $ 381,751 $ 368,878
Goodwill, Impaired, Accumulated Impairment Loss $ 0 $ 0
v3.23.1
Goodwill - summary of the activity and balances in goodwill (Details)
$ in Thousands
 3 Months Ended
Apr. 02, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill, Beginning Balance $ 368,878
Additions 12,873
Goodwill, Ending Balance $ 381,751
v3.23.1
Business Combination (Additional Information) (Details) - USD ($)
$ in Thousands, shares in Millions
Mar. 20, 2023
Apr. 02, 2023
Jan. 01, 2023
Business Acquisition [Line Items]      
Goodwill   $ 381,751 $ 368,878
Ronald Cohn, Inc.      
Business Acquisition [Line Items]      
Date of Acquisition Mar. 20, 2023    
Business combination, Common shares, Value $ 18,100    
Business Acquisition, Name of Acquired Entity Ronald Cohn, Inc    
Cash consideration $ 13,000    
Goodwill 12,900    
Reacquired right of intangible asset 23,100    
AllocationToNetTangibleAssets $ (4,900)    
Ronald Cohn, Inc. | Common Stock [Member]      
Business Acquisition [Line Items]      
Business acquisition, Common shares, Aggregate consideration paid 0.6    
v3.23.1
Store Closures (Additional Information) (Details)
$ in Thousands
 1 Months Ended 3 Months Ended
Feb. 28, 2023
Store
Apr. 02, 2023
USD ($)
Store Closures [Line Items]    
Number of Closing Stores | Store 11  
Store performance capacity rate 30.00%  
Store closing charges   $ 27,800
Depreciation and amortization   4,000
Accelerated depreciation   6,000
Severance expense   $ 0