Sweetgreen Reports Mixed Results for Q1

American fast casual salad restaurant chain Sweetgreen reported a jump in quarterly sales in its latest earnings report, but also revealed that losses had widened.

The company’s losses widened, primarily due to a $21 million increase in stock-based compensation. Revenue climbed 67%, which was helped by a 35% increase in same-store sales and a 10% increase in menu prices.

Shares of the company rose more than 5% in extended trading yesterday.
Compared to expectations by a survey of analysts by Refinitiv, here is how Sweetgreen did for the first quarter.

The company reported a loss per share of 45 cents, compared to a loss of 41 cents expected. Revenue at $102.6 million was better than the $101.5 million expected.

The salad chain reported first-quarter net loss of $49.2 million, or 45 cents per share, wider than its net loss of $30 million, or $1.77 per share, a year earlier. Analysts surveyed by Refinitiv were anticipating a loss per share of 41 cents.

The company said a $21 million increase in stock-based compensation was the primary reason for its widening losses this quarter. Higher wages and employee bonuses also weighed on the company’s restaurant-level margins, partially offset by its decision to end its old loyalty program.

Net sales rose 67% to $102.6 million, beating expectations of $101.5 million.

Digital orders accounted for two-thirds of its quarterly revenue. Over 40% of sales came from Sweetgreen’s own app and website, rather than third parties.

Sweetgreen’s same-store sales climbed 35% in the quarter, after falling 26% a year ago. The chain cited higher customer transactions and menu price increases.

The chain’s average unit volumes, which measures average sales per location, increased to $2.8 million in the quarter. A year ago, the metric fell to $2.1 million. This quarter’s average unit volumes surpass pre-pandemic levels, according to CFO Mitch Reback.

Sweetgreen reiterated its forecast for 2022, predicting revenue of $515 million to $535 million and same-store sales growth of 20% to 26%.

The company also said it expects to open at least 35 net new locations.

“We’re seeing nothing recently that would cause us to change our guidance,” Reback told analysts on the conference call.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.