Sweetgreen (SG) profit for 1 sq.m. 2022
Sweetgreen banner at the NYSE, November 18, 2021
Source: New York Stock Exchange.
Sweetgreen on Thursday reported a rise in first-quarter losses, but sales jumped 67% as workers returned to their offices and resumed their previous lunch routines.
The company’s shares rose more than 5% in extended trading.
Here’s what the company said compared to what Wall Street expected, based on a survey of analysts at Refinitiv:
- Loss per share: 45 cents vs. 41 cents expected.
- Revenue: $102.6 million vs. $101.5 million expected.
The lettuce chain posted a first-quarter net loss of $49.2 million, or 45 cents per share, up from a net loss of $30 million, or $1.77 per share, a year earlier. Analysts polled by Refinitiv had expected a loss per share of 41 cents.
Sweetgreen said the main reason for the increase in losses this quarter was a $21 million increase in share-based compensation. Higher employee salaries and bonuses also weighed on the company’s margins at the restaurant level, offset in part by its decision to shut down its old loyalty program.
net sales rose 67% to $102.6 million, beating expectations of $101.5 million. Digital bookings accounted for two-thirds of its quarterly revenue. Over 40% of sales come from Sweetgreen’s own app and website, not third parties.
Sweetgreen’s same-store sales rose 35% for the quarter after falling 26% a year ago. The network has credited higher customer transactions and price increases to the menu. The company raised prices by 10% from last year, but management said consumer behavior hadn’t changed at all.
However, there is one area where buyers have changed the way they buy Sweetgreen. As workers return to their offices, Sweetgreen’s most popular shopping day of the week has shifted from pre-pandemic Monday to Tuesday, Wednesday and Thursday.
Average online sales, which measures average sales at a single location, increased to $2.8 million for the quarter. A year ago, the figure fell to $2.1 million. According to CFO Mitch Rebeck, average sales this quarter exceed pre-pandemic levels.
Co-Founder and CEO Jonathan Neman talked about successfully testing a new loyalty program called Sweetpass. Customers in the pilot doubled their visit frequency and tripled their spending on Sweetgreen salads and entrees. The program costs $10 per month, but gives users $3 credit for every purchase of at least $9.95.
Sweetgreen reiterated its guidance for 2022, forecasting $515 million to $535 million in revenue and 20% to 26% growth in same-store sales. It is also expected to open at least 35 new outlets.
“We haven’t seen anything lately that would cause us to change our forecasts,” Reback told analysts on a conference call.
Other restaurant companies, such as Starbucks and Taco Bell owner Yum Brands, have changed their forecasts for this quarter, citing inflation and conditions in some international markets. Rebak said external factors raised some concerns, but the network’s strong performance this quarter forced the company to reiterate its guidance for the full year.
Read the company’s earnings report here.