Sprouts Farmers Market Inc

APPENDIX A

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

This proxy statement contains certain non-GAAP financial measures, including Adjusted EBIT and adjusted diluted earnings per share, in discussing our company’s financial performance, as well as Plan EBIT, that was used as a performance target in certain of our performance-based compensation items during fiscal 2024 and prior fiscal years as disclosed in "Pay vs. Performance." These measures are not calculated in accordance with accounting principles generally accepted in the United States of America (referred to as “GAAP”).

We define Adjusted EBIT as net income before interest expense and provision for income tax, excluding certain special items we do not consider representative of our ongoing financial performance. Plan EBIT may contain further adjustments, as determined by our talent and compensation committee. We define adjusted diluted earnings per share by adjusting the applicable GAAP measure to remove the impact of special items.

We believe the presentation of Adjusted EBIT and adjusted diluted earnings per share aids in the understanding of our business performance, but is not intended to be an alternative to GAAP measures. For the fiscal year ended December 29, 2024, there were no further adjustments used by our talent and compensation committee to determine Plan EBIT for purposes of certain of our performance-based compensation items; thus only Adjusted EBIT is presented below.

These non-GAAP measures are intended to provide additional information only and do not have any standard meaning prescribed by GAAP. Use of these terms below may differ from similar measures reported by other companies. Because of their limitations, these non-GAAP measures should not be considered as measures of discretionary cash available to use to reinvest in growth of our business, or as measures of cash that will be available to meet our obligations. These non-GAAP measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.

The following table shows a reconciliation of EBIT to net income and adjusted diluted earnings per share to diluted earnings per share for the fiscal years ended December 29, 2024, December 31, 2023, January 1, 2023 and January 2, 2022:

Sprouts Farmers Market | A-1 |Proxy Statement 2025

Appendix A

SPROUTS FARMERS MARKET, INC. AND SUBSIDIARIES

NON-GAAP MEASURE RECONCILIATION

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(1)For the fifty-two weeks ended December 31, 2023, special items included approximately $28 million in Store Closure and other costs, net primarily related to impairment charges and $6 million in Depreciation and amortization (exclusive of depreciation in cost of sales) for accelerated depreciation in connection with store closures, $9 million in Selling, general and administrative expenses related to store closures, our supply chain transition and acquisition related costs, and $3 million in Cost of sales related to store closures and our supply chain transition. After-tax impact included the tax benefit on the pre-tax charge.

Sprouts Farmers Market | A-2 |Proxy Statement 2025