Nicholas Gamet, Chief Conceptual Officer and Co-Founder of Sweetgreen Inc. , right, eats a salad during a company’s initial public offering (IPO) on the floor of the New York Stock Exchange (NYSE) in New York, US, on Thursday, November. 18, 2021.
Michael Nagel | bloomberg | Getty Images
sweet green On Thursday, it posted a narrower-than-expected first-quarter loss after slowing its expansion to focus on profitability.
The salad chain, which went public in November 2021, aims to turn a profit for the first time by 2024. And in the last quarter, it announced that it would take a more conservative approach to entering new markets. It also reduces support center costs and simplifies its management structure.
Sweetgreen shares rose 7% in extended trading.
Here’s what the company reported compared to what Wall Street was expecting, based on a survey of analysts conducted by Refinitiv:
- share loss: 30 cents vs. Expect 35 cents
- he won: $125.1 million vs. $126 million expected
The salad chain reported a first-quarter net loss of $33.7 million, or 30 cents per share, paring its net loss of $49.7 million, or 45 cents per share, in the prior year.
Sweetgreen said its profit margins at the restaurant level improved 1% for the quarter.
Net sales Up 22% year-over-year to $125.1 million, same-store sales were up 5%, beating FactSet’s estimate of 4.9%. Quarterly traffic increased 2% while list prices increased 3% compared to the same period last year.
Sweetgreen CEO Jonathan Neiman told CNBC that the Chicken + Chipotle Pepper Bowl chain has attracted new customers and generated buzz. The menu item was Sweetgreen’s first warm bowl without any lettuce.
But some of the buzz may have come from Chipotle’s lawsuit against Sweetgreen over an alleged copyright infringement on the item’s original name, the Chipotle Chicken Burrito Bowl. The fast casual chains reached a temporary settlement that included renaming the bowl shortly after Chipotle filed the lawsuit.
Digital transactions made up 61% of sales, down slightly from the previous year, when it made up two-thirds of its revenue. Neiman said the decline was the result of increased in-person orders adding to Sweetgreen’s overall sales.
The company opened nine new restaurants during the quarter. It plans to open 30 to 35 new locations in 2023, including two restaurants with automated kitchens, using technology from its acquisition of Spyce. The first of those restaurants, called Infinite Kitchens, opened Wednesday in Naperville, Illinois, outside of Chicago.
“We expect higher margins and better unit economics,” Neiman said. “He’s a pilot, so we’ll learn a lot from him very early on, but overall I’m really excited to bring this to life.”
Sweetgreen reiterated most of its 2023 forecast, which projects revenue of $575 million to $595 million and same-store sales growth of 2% to 6%.
However, it updated its forecast for adjusted EBITDA from a loss of $13 million to $15 million to a loss of $13 million to $3 million. The company said the update was due to a $6.9 million benefit from employee retention tax credits.