Sweetgreen Shares Soar as Salad Chain Beats Revenue Estimates and Expands Locations
Sweetgreen (SG) shares skyrocketed Friday, a day after the salad restaurant chain slashed its loss, boosted sales, and raised its guidance as it expanded locations.
Strong Financial Performance
Sweetgreen posted a second-quarter net loss of $14.5 million, nearly half of what it was a year earlier. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $12.4 million were better than expected. Revenue rose 21% year-over-year to $184.6 million, also surpassing estimates.
The company attributed the revenue jump primarily to the addition of 36 net new restaurant openings compared to the same period in 2023, which contributed $18.2 million. Same-store sales also gained 9%, pulling in $13.9 million.
Expansion and Success
Co-founder and Chief Executive Officer (CEO) Jonathan Neman said Sweetgreen continues to open successful locations across the country, and its “expanding menu is hitting the mark with customers, delivering on craveability, quality, and value.”
The firm made several updates to its full-year outlook. It now expects 24 to 26 net new restaurant openings, higher than the previous estimate of 23 to 27. Revenue is projected to range from $670 million to $680 million, up from $660 million to $675 million. Same-store sales growth is anticipated to be 5% to 7%, compared to the previous estimate of 4% to 6%. The company also raised its restaurant-level profit margin forecast to 19% to 20% and adjusted EBITDA to $16 million to $19 million.
Investor Response
Shares of Sweetgreen jumped 25% to $32.74 as of 10 a.m. ET on Friday. The stock has soared about 190% year-to-date, reflecting investor confidence in the company’s growth and financial performance.
Conclusion
Sweetgreen’s strong financial performance in the second quarter, with a significant reduction in losses and revenue surpassing estimates, has fueled investor optimism. The addition of new restaurant locations and the success of the expanding menu have contributed to the company’s growth. With an improved full-year outlook, Sweetgreen is well-positioned to continue its expansion and capitalize on the increasing demand for healthy and sustainable food options.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. Investing in stocks involves risks, and investors should do their own research and consult with a financial advisor before making any investment decisions.
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