Nicolas Jammet, chief concept officer and co-founder of Sweetgreen Inc., right, eats a salad in the course of the company’s initial public offering (IPO) on the ground of the Latest York Stock Exchange (NYSE) in Latest York, U.S., on Thursday, Nov. 18, 2021.
Michael Nagle | Bloomberg | Getty Images
Sweetgreen on Thursday reported a narrower-than-expected loss in its first quarter after slowing its expansion to give attention to profitability.
The salad chain, which went public in November 2021, is aiming to show a profit for the primary time by 2024. Last quarter, it announced it might take a more conservative approach to entering recent markets. It is also cutting support-center costs and simplifying its management structure.
Sweetgreen shares rose 7% in prolonged trading.
Here’s what the corporate reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Loss per share: 30 cents vs. 35 cents expected
- Revenue: $125.1 million vs. $126 million expected
The salad chain reported a first-quarter net lack of $33.7 million, or 30 cents per share, narrowing its net lack of $49.7 million, or 45 cents per share, a yr earlier.
Sweetgreen said its restaurant-level profit margins improved by 1% in the course of the quarter.
Net sales climbed 22% yr over yr to $125.1 million, and same-store sales rose 5%, topping FactSet estimates of 4.9%. Quarterly traffic increased 2% while menu prices rose 3% compared with the year-ago period.
Sweetgreen CEO Jonathan Neman told CNBC that the chain’s Chicken + Chipotle Pepper Bowl drew in recent customers and generated buzz. The menu item was Sweetgreen’s first warm bowl with none lettuce.
But among the buzz may need come from Chipotle’s lawsuit against Sweetgreen for alleged copyright infringement over the item’s original name, Chipotle Chicken Burrito Bowl. The 2 fast-casual chains reached a tentative settlement that included renaming the bowl shortly after Chipotle filed the lawsuit.
Digital transactions accounted for 61% of sales, down barely from a yr earlier, after they made up two-thirds of its revenue. Neman said the decrease was the results of more in-person orders adding to Sweetgreen’s overall sales.
The corporate opened nine net recent restaurant locations in the course of the quarter. It plans to open between 30 to 35 recent locations in 2023, including two restaurants with automated kitchens using the technology from its Spyce acquisition. The primary of those restaurants, which it calls Infinite Kitchens, opens Wednesday in Naperville, Illinois, outside of Chicago.
“We expect a better margin profile and higher unit economics with this,” Neman said. “It is a pilot, so we will learn lots from it very early, but overall I’m very excited to bring this to life.”
Sweetgreen reiterated most of its 2023 forecast, which projects revenue between $575 million to $595 million and same-store sales growth of two% to six%.
Nevertheless, it updated its outlook for adjusted earnings before interest, taxes, depreciation and amortization from a loss between $13 million to $15 million to a lack of $13 million to $3 million. The corporate said the update is resulting from a $6.9 million profit from employee-retention tax credits.
