A Sweetgreen banner on the NYSE, November 18, 2021.
Source: New York SE
Sweetgreen on Thursday reported mounting first-quarter losses, but sales rose 67% as workers returned to their offices and resumed their old lunchtime routines.
The company’s shares rose more than 5% in extended trading.
Here’s what the company reported, compared to Wall Street expectations, based on a poll of analysts by Refinitiv:
- Loss per share: 45 cents vs. 41 cents expected
- Revenue: $102.6 million versus $101.5 million expected
The salad chain reported a net loss of $49.2 million, or 45 cents a share, in the first quarter, up from the net loss of $30 million, or $1.77 a share, a year earlier. Analysts polled by Refinitiv were expecting a loss of 41 cents per share.
According to Sweetgreen, a $21 million increase in stock-based compensation was the primary reason for the quarter’s mounting losses. Higher wages and employee bonuses also weighed on the company’s restaurant-level margins, partially offset by the decision to end the old loyalty program.
net sales jumped 67% to $102.6 million, beating expectations of $101.5 million. Digital orders accounted for two-thirds of quarterly sales. More than 40% of sales came from Sweetgreen’s own app and website and not from third parties.
Sweetgreen’s same-store sales rose 35% in the quarter after falling 26% a year ago. The chain credited higher customer transactions and menu price increases. The company has increased prices by 10% over the past year, but executives said consumer behavior hasn’t changed at all.
However, there is one area where customers have changed the way they buy Sweetgreen. As workers return to their offices, the most popular day of the week for Sweetgreen shopping has shifted to Tuesday, Wednesday and Thursday from the pre-pandemic Monday.
The chain’s average unit volume, which measures average sales per location, rose to $2.8 million in the quarter. A year ago, the metric fell to $2.1 million. According to CFO Mitch Reback, average unit sales this quarter are above pre-pandemic levels.
Co-founder and CEO Jonathan Neman announced the successful testing of a new loyalty program called Sweetpass. Customers involved in the pilot doubled the frequency of their visits and tripled their spending on Sweetgreen salads and hot bowls. The program costs $10 per month but gives users a $3 credit with every purchase worth at least $9.95.
Sweetgreen reiterated its 2022 guidance, projecting sales of $515 million to $535 million and same-store sales growth of 20% to 26%. In addition, the company expects to open at least 35 new net locations.
“We don’t see anything recently that would cause us to change our guidance,” Reback told analysts on the earnings call.
Other restaurant companies including Starbucks and Yum Brands, owner of Taco Bell, withdrew their forecasts for the quarter, citing inflation and conditions in select international markets. External factors raised some concerns, Reback said, but the chain’s strong performance this quarter prompted the company to reiterate its full-year guidance.
Read the company’s earnings announcement here.
https://www.cnbc.com/2022/05/05/sweetgreen-sg-q1-2022-earnings.html Sweetgreen (SG) Q1 2022 results