Sweetgreen (SG) Q3 2024 earnings summary

Executive summary

• Revenue grew 13% year-over-year to $173.4 million, driven by new restaurant openings and a 6% same-store sales increase, with menu price increases and positive traffic/mix.

• Net loss narrowed to $20.8 million from $25.1 million, reflecting improved operating leverage and higher sales.

• Restaurant-level profit margin expanded to 20.2%, marking the seventh consecutive quarter of margin expansion.

• Adjusted EBITDA reached $6.8 million for the quarter, a $4.3 million improvement year-over-year.

• Opened 5 net new restaurants in the quarter, with 15 year-to-date, and expanded Infinite Kitchen technology.

Financial highlights

• Total revenue for Q3 was $173.4 million, up from $153.4 million in Q3 2023.

• Restaurant-level profit for Q3 was $34.9 million (margin 20%), up from $29.1 million (margin 19%).

• Food, beverage, and packaging costs were 28% of revenue; labor and related expenses were 27% of revenue, both showing improvements.

• General and administrative expense was $36.8 million, or 21% of revenue, with a decrease in stock-based compensation.

• Cash and cash equivalents at quarter-end were $234.6 million, with positive operating cash flow of $37.3 million for the first nine months.

Outlook and guidance

• Raised 2024 guidance: 24–26 net new restaurant openings, revenue of $675–$680 million, same-store sales growth of 6%–7%, restaurant-level margin of 19.5%–20%, and adjusted EBITDA of $18–$20 million.

• For 2025, expect to open at least 40 new restaurants, about half with Infinite Kitchens, aiming for 15%–20% annual unit growth.

• Plans to integrate Infinite Kitchen automation into more new restaurants in fiscal 2024 and 2025.

• Management expects continued revenue growth through new restaurant openings and menu innovation, but notes potential margin pressure from inflation and commodity costs.

• Sufficient liquidity is expected to fund operations and growth for at least the next 12 months.