On November 7, 2024, Sweetgreen Inc (SG, Financial) released its 8-K filing detailing the financial results for the third quarter of fiscal year 2024, ending September 29. Sweetgreen Inc, a next-generation restaurant and lifestyle brand, is known for serving healthy, plant-forward meals with a focus on organic and local sourcing.
Quarterly Performance Overview
Sweetgreen Inc reported a total revenue of $173.4 million for Q3 2024, marking a 13% increase from the $153.4 million reported in the same period last year. However, this figure fell short of the analyst estimate of $175.23 million. The company's net loss narrowed to $20.8 million, or $0.18 per share, compared to a net loss of $25.1 million, or $0.22 per share, in Q3 2023. This was slightly above the estimated earnings per share of -$0.16.
Key Financial Metrics and Achievements
Sweetgreen's Same-Store Sales Change improved to 6%, up from 4% in the prior year period, driven by menu price increases and favorable product mix. The Average Unit Volume (AUV) remained stable at $2.9 million. The company opened 5 new restaurants during the quarter, compared to 15 in the previous year, reflecting a more cautious expansion strategy.
Restaurant-Level Profit increased to $34.9 million, with a margin of 20%, up from $29.1 million and a margin of 19% in Q3 2023. Adjusted EBITDA also saw a significant rise to $6.8 million from $2.5 million, indicating improved operational efficiency.
Operational Challenges and Strategic Initiatives
Despite the revenue growth, Sweetgreen faced challenges such as higher protein costs and increased staffing expenses due to prevailing wage rates. The company's digital revenue percentage decreased slightly to 55% from 58% in the prior year, indicating a shift in consumer purchasing behavior.
“Our strong third-quarter performance demonstrates that our focus on menu innovation showcasing seasonal ingredients and driving operational execution is working,” said Jonathan Neman, Co-Founder and Chief Executive Officer.
Sweetgreen's strategic initiatives, including menu innovation and the deployment of the Infinite Kitchen, are aimed at enhancing customer experience and operational efficiency. The company remains confident in its growth prospects, particularly in emerging markets.
Financial Position and Outlook
As of September 29, 2024, Sweetgreen reported total assets of $857.98 million, with cash and cash equivalents amounting to $234.62 million. The company's liabilities stood at $394.68 million, with stockholders' equity at $463.30 million.
Looking ahead, Sweetgreen has updated its fiscal year 2024 guidance, projecting revenue between $675 million and $680 million, with a Same-Store Sales Change of 6-7% and an Adjusted EBITDA of $18 million to $20 million. The company plans to open 24-26 new restaurants by the end of the year.
Sweetgreen's performance in Q3 2024 reflects its ongoing efforts to balance growth with profitability, amidst a challenging economic environment. The company's focus on innovation and operational efficiency positions it well for future growth, although it must navigate rising costs and competitive pressures in the restaurant industry.
Explore the complete 8-K earnings release (here) from Sweetgreen Inc for further details.
