Sweetgreen (SG, Financial) has reported a significant rise in its stock following a positive Q1 earnings report. Despite a larger-than-expected loss, the company surpassed revenue expectations and raised its FY24 financial forecasts. Sales guidance has been increased to $660-675 million from the previous $655-670 million, and adjusted EBITDA predictions have been adjusted to $10-19 million from $8-15 million.
Key highlights from the quarter include:
- SG achieved its first positive adjusted EBITDA of $0.1 million, a notable improvement from a $6.7 million loss the previous year, driven by aggressive new location openings.
- Quarterly comparable sales (comps) rose by 5%, exceeding the forecasted 3%, with the increase primarily due to a 5% rise in menu prices, despite flat traffic.
- Digital sales continued to dominate, accounting for 59% of total revenue, with 56% originating from SG's own digital platforms.
- The introduction of protein plates and a test launch of caramelized garlic steak in Boston marked efforts to diversify the menu beyond salads.
- SG plans to expand its footprint by adding 23-27 new restaurants in 2024, focusing on both new and existing markets in the U.S.
Overall, Sweetgreen's recent performance has been commendable, particularly in terms of sales growth and digital engagement. Though the company faced some challenges with traffic, the overall positive reception to new menu items and strategic expansion plans are promising signs for the future. Sweetgreen has shown resilience and innovation since its IPO in November 2021, and is clearly focused on maintaining a robust growth trajectory.
