Sweetgreen (SG) Q2 2022 results are in line with estimates

A worker wears a Sweetgreen Inc. hat while preparing food at the company’s restaurant in Boston, Massachusetts.

Adam Glanzmann | Bloomberg | Getty Images

Shares of Sweetgreen plunged more than 20% in extended trading on Tuesday after the salad chain lowered its 2022 guidance.

The restaurant company also announced that it will lay off 5% of its support center staff and downsize to a smaller office building to reduce its operating costs.

Sweetgreen’s stock is down 37% since its IPO in November.

Here’s what the company reported, compared to Wall Street expectations, based on a poll of analysts by Refinitiv:

  • Loss per share: 36 cents, in line with estimates
  • Revenue: $124.9 million versus $130.2 million expected

Sweetgreen’s sales fell around Memorial Day, prompting the company to revise its guidance downward, CFO Mitch Reback said in a statement.

As temperatures warmed, so did inflation, putting pressure on consumer spending. Other restaurant chains, like Chipotle Mexican Grill, also noted the return of seasonal trends as office workers and students resumed their pre-pandemic summer routines.

For the quarter ended June 26, Sweetgreen’s net sales increased 45% to $124.9 million. Same-store sales rose 16%, boosted by 6% price increases.

For 2022, Sweetgreen now expects annual sales of $480 million to $500 million, down from its previous guidance of $515 million to $535 million. The chain also revised its guidance for same-store sales, forecasting 13% to 19% growth from the previous guidance of 20% to 25%.

In addition, Sweetgreen also revised its outlook for adjusted losses before interest, taxes, depreciation and amortization to a range of $45 million to $35 million, up from the previous range of $40 million to $33 million.

But the chain shared the steps it is taking to reach profitability, including layoffs and reducing its real estate footprint by moving to a smaller office. Severance packages and related benefits are expected to cost the company between $500,000 and $800,000, while the office move will cost $8.4 million to $9.9 million. The charges are expected to impact third quarter results.

Sweetgreen reported a net loss of $40 million, or 36 cents a share, for the second quarter, up from a net loss of $26 million, or $1.55 a share, a year earlier. The company blamed an increase in stock-based compensation for its mounting losses.

Read the full earnings report here.

This is an evolving story. Check for updates again.

https://www.cnbc.com/2022/08/09/sweetgreen-stock-plummets-after-salad-chain-cuts-forecast-announces-layoffs.html Sweetgreen (SG) Q2 2022 results are in line with estimates

Joshua Buckhalter

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