Sweetgreen, Inc. Announces First Quarter 2022 Financial Results
Sweetgreen, Inc. (NYSE: SG) reported Q1 2022 revenue of $102.6 million, a 67% increase year-over-year, primarily driven by a 35% change in same-store sales. The company opened 8 new restaurants, with average unit volumes (AUVs) rising to $2.8 million. The net loss was $(49.2) million, influenced by higher stock-based compensation. Adjusted EBITDA improved to $(16.5) million. For the full year, Sweetgreen expects revenue of $515 million to $535 million, with continued growth in restaurant-level profit margins.
- Revenue increased by 67% to $102.6 million.
- Same-store sales grew by 35%.
- Average unit volumes rose to $2.8 million, surpassing pre-pandemic levels.
- Opened 8 new restaurants, supporting growth strategy.
- Restaurant-level profit margin improved to 13%.
- Net loss increased to $(49.2) million from $(30.0) million in the prior year.
- General and administrative expenses rose to 48% of revenue, primarily due to stock-based compensation increases.
- Adjusted EBITDA remained negative at $(16.5) million.
“We are pleased to report that Q1 2022 revenue grew
"We are encouraged by how the business performed during the first quarter despite Omicron headwinds. AUVs recovered to
First Quarter 2022 Financial Results
For the first quarter of fiscal year 2022, compared to the first quarter of fiscal year 2021:
-
Total revenue was
versus$102.6 million in the prior year period, an increase of$61.4 million 67% . -
Same-Store Sales Change of
35% versus Same-Store Sales Change of (26)% in the prior year period. -
AUV of
versus AUV of$2.8 million in the prior year period.$2.1 million -
Total Digital Revenue Percentage of
66% and Owned Digital Revenue Percentage of43% , versus Total Digital Revenue Percentage of77% and Owned Digital Revenue Percentage of53% in the prior year period. -
Loss from operations was
and loss from operations margin was (48)% versus loss from operations of$(49.6) million and loss from operations margin of (49)% in the prior year period.$(30.1) million -
Restaurant-Level Profit(1) was
and Restaurant-Level Profit Margin was$13.3 million 13% , versus Restaurant-Level Profit of and Restaurant-Level Profit Margin of$2.1 million 3% in the prior year period. -
Net loss was
versus net loss of$(49.2) million in the prior year period.$(30.0) million -
Adjusted EBITDA(1) was
versus Adjusted EBITDA of$(16.5) million in the prior year period and Adjusted EBITDA Margin was (16)% versus (34)% in the prior year period.$(21.0) million - 8 Net New Restaurant Openings versus 1 Net New Restaurant Opening in the prior year period.
(1) Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. Reconciliations of Restaurant-Level Profit, Restaurant-Level Profit Margin, and Adjusted EBITDA to the most directly comparable financial measures presented in accordance with GAAP, are set forth in the schedules accompanying this release. See “Reconciliation of GAAP to Non-GAAP Measures.” |
Results for the first quarter ended
Total revenue in the first quarter of 2022 was
Our loss from operations margin was (48)% for the first quarter of 2022 versus (49)% in the prior year period. Restaurant-Level Profit Margin was
General and administrative expense was
Net loss for the first quarter of 2022 was
2022 Outlook Reaffirmed
For fiscal year 2022, we continue to anticipate the following:
- At least 35 Net New Restaurant Openings
-
Revenue ranging from
to$515 million $535 million -
Same-Store Sales Change of between
20% and26% -
Restaurant-Level Profit Margin between
16% and17% -
Adjusted EBITDA between
to$(40) million $(33) million
We have not reconciled our expectations as to Restaurant-Level Profit Margin and Adjusted EBITDA to their most directly comparable GAAP measures as a result of uncertainty regarding, and the potential variability of, reconciling items. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to our results computed in accordance with GAAP.
Conference Call
Sweetgreen will host a conference all to discuss its financial results today,
Forward-Looking Statements
This press release and the related conference call, webcast and presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may relate to, but are not limited to, statements regarding our financial outlook for the full fiscal year 2022, including the expected number of Net New Restaurant Openings, expected revenue, expected Same-Store Sales Change, expected Restaurant-Level Profit Margin and expected Adjusted EBTIDA; our expectations regarding financial and business trends, including the impact of increasing inflation, rising interest rates and the macroeconomic climate on labor rates and on our supply chain costs, and the associated impact on our business; our growth strategy and business aspirations, including our goal of operating 1,000 restaurants by the end of the decade and our vision of being as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect; management’s plans, priorities, initiatives and strategies; and our expectations regarding the impacts of the COVID-19 pandemic. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” or “would,” or the negative of these words or other similar terms or expressions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all.
Forward-looking statements are based on information available at the time those statements are made and are based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management as of that time with respect to future events. These statements are subject to risks and uncertainties, many of which involve factors or circumstances that are beyond our control, that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. These risks and uncertainties include our ability to compete effectively, the impact of pandemics or disease outbreaks, such as the COVID-19 pandemic, uncertainties regarding changes in economic conditions and the customer behavior trends they drive, including long-term customer behavior trends following the COVID-19 pandemic, our ability to open new restaurants, our ability to effectively identify and secure appropriate sites for new restaurants, our ability to expand into new markets and the risks such expansion presents, the profitability of new restaurants we may open, and the impact of any such openings on sales at our existing restaurants, our ability to preserve the value of our brand, food safety and foodborne illness concerns, the effect on our business of increases in labor costs, labor shortages, and difficulties in attracting, motivating, and retaining well-qualified employees, our ability to identify, complete, and integrate acquisitions, the effect on our business of governmental regulation and changes in employment laws, the effect on our business of expenses and potential management distraction associated with litigation, potential privacy and cybersecurity incidents, the effect on our business of restrictions and costs imposed by privacy, data protection, and data security laws, regulations, and industry standards, and our ability to enforce our rights in our intellectual property. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the Company's expectations is included in our
Additional information regarding these and other factors that could affect the Company’s results is included in the Company’s
Glossary
- Average Unit Volume (“AUV”) - AUV is defined as the average trailing revenue for the prior four fiscal quarters for all restaurants in the Comparable Restaurant Base.
-
Comparable Restaurant Base - Comparable Restaurant Base for any measurement period is defined as all restaurants that have operated for at least twelve full months as of the end of such measurement period, other than any restaurants that had a material, temporary closure during the relevant measurement period. Historically, a restaurant has been considered to have had a material, temporary closure if it had no operations for a consecutive period of at least 30 days. As a result of material, temporary closures in fiscal year 2020 due to the COVID-19 pandemic, 19 restaurants were excluded from our Comparable Restaurant Base for the thirteen weeks ended
March 28, 2021 . No restaurants were excluded from the Comparable Restaurant Base for the thirteen weeks endedMarch 27, 2022 . - Net New Restaurant Openings - Net New Restaurant Openings reflect the number of new sweetgreen restaurant openings during a given reporting period, net of any permanent sweetgreen restaurant closures during the same period.
-
Same-Store Sales Change - Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period; provided, that for any restaurant that has had a temporary closure (which historically has been defined as a closure of at least five days during which the restaurant would have otherwise been open) during any prior or current fiscal month, such fiscal month, as well as the corresponding fiscal month for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant. There were no such closures to any restaurants during the thirteen weeks ended
March 27, 2022 andMarch 28, 2021 . This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and closures. - Total Digital Revenue Percentage and Owned Digital Revenue Percentage - Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our total digital channels (which includes our owned digital channels and our marketplace channel). Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our owned digital channels (which includes our pick-up channel, native delivery channel, and outpost channel, as well as purchases made in our in-store channel via digital scan-to-pay).
Non-GAAP Financial Measures
In addition to our consolidated financial statements, which are presented in accordance with GAAP, we present certain non-GAAP financial measures, including Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin. We believe these measures are useful to investors and others in evaluating our performance because these measures:
- facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or NOL), and the age and book depreciation of facilities and equipment (affecting relative depreciation expense);
- are widely used by analysts, investors, and competitors to measure a company’s operating performance; are used by our management and board of directors for various purposes, including as measures of performance, as a basis for strategic planning and forecasting; and
- are used internally for a number of benchmarks including to compare our performance to that of our competitors.
We define Restaurant-Level Profit as loss from operations adjusted to exclude general and administrative expense, depreciation and amortization, pre-opening costs, loss on disposal of property and equipment, and, in certain periods, impairment of long-lived assets and closed-store costs. Restaurant-Level Profit Margin is Restaurant-Level Profit as a percentage of revenue. As it excludes general and administrative expense, which is primarily attributable to our sweetgreen Support Center, we evaluate Restaurant-Level Profit and Restaurant-Level Profit Margin as a measure of profitability of our restaurants.
We define Adjusted EBITDA as net loss adjusted to exclude interest income, interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, loss on disposal of property and equipment, Spyce acquisition costs, other income, and, in certain periods, impairment of long-lived assets and closed-store costs. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.
Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, Restaurant-Level Profit and Adjusted EBITDA should not be viewed as substitutes for, or superior to, loss from operations or net loss prepared in accordance with GAAP as a measure of profitability. Some of these limitations are:
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Restaurant-Level Profit and Adjusted EBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- Restaurant-Level Profit and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
- Restaurant-Level Profit and Adjusted EBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
- Restaurant-Level Profit and Adjusted EBITDA do not consider the potentially dilutive impact of stock-based compensation;
- Restaurant-Level Profit is not indicative of overall results of the Company and does not accrue directly to the benefit of stockholders, as corporate-level expenses are excluded;
- Adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as stock-based compensation, loss on disposal of property and equipment, Spyce acquisition costs, certain other expenses, and, in certain periods, impairment of long-lived assets and closed-store costs; and
- other companies, including those in our industry, may calculate Restaurant-Level Profit and Adjusted EBITDA differently, which reduces their usefulness as comparative measures.
Because of these limitations, you should consider Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, loss from operations, net loss, and our other GAAP results.
About sweetgreen
Sweetgreen (NYSE: SG) passionately believes that real food should be convenient and accessible to everyone. Every day, across its 150+ restaurants, their team members create plant-forward, seasonal, and earth-friendly meals from fresh ingredients and produce that prioritizes organic, regenerative, and local sourcing. Sweetgreen strongly believes in harnessing the power of technology to enhance the customer experience, and leverages their app to create an omnichannel experience to meet their customers where they are. Sweetgreen’s strong food ethos and investment in local communities have enabled them to grow into a national brand with a mission to build healthier communities by connecting people to real food.
|
|||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||
(in thousands, except share and per share amounts) |
|||||||||||||
(unaudited) |
|||||||||||||
|
Thirteen Weeks Ended |
||||||||||||
|
|
|
|
||||||||||
Revenue |
$ |
102,591 |
|
|
100 |
% |
|
$ |
61,392 |
|
|
100 |
% |
Restaurant operating costs (exclusive of depreciation and amortization presented separately below): |
|
|
|
|
|
|
|
||||||
Food, beverage, and packaging |
|
27,106 |
|
|
26 |
% |
|
|
17,268 |
|
|
28 |
% |
Labor and related expenses |
|
34,302 |
|
|
33 |
% |
|
|
22,292 |
|
|
36 |
% |
Occupancy and related expenses |
|
14,800 |
|
|
14 |
% |
|
|
10,049 |
|
|
16 |
% |
Other restaurant operating costs |
|
13,084 |
|
|
13 |
% |
|
|
9,681 |
|
|
16 |
% |
Total restaurant operating costs |
|
89,292 |
|
|
87 |
% |
|
|
59,290 |
|
|
97 |
% |
Operating expenses: |
|
|
|
|
|
|
|
||||||
General and administrative |
|
49,672 |
|
|
48 |
% |
|
|
23,380 |
|
|
38 |
% |
Depreciation and amortization |
|
10,677 |
|
|
10 |
% |
|
|
7,847 |
|
|
13 |
% |
Pre-opening costs |
|
2,512 |
|
|
2 |
% |
|
|
961 |
|
|
2 |
% |
Loss on disposal of property and equipment |
|
8 |
|
|
— |
% |
|
|
51 |
|
|
— |
% |
Total operating expenses |
|
62,869 |
|
|
61 |
% |
|
|
32,239 |
|
|
53 |
% |
Loss from operations |
|
(49,570 |
) |
|
(48 |
)% |
|
(30,137 |
) |
|
(49 |
)% |
|
Interest income |
|
(168 |
) |
|
— |
% |
|
|
(112 |
) |
|
— |
% |
Interest expense |
|
23 |
|
|
— |
% |
|
|
20 |
|
|
— |
% |
Other income |
|
(245 |
) |
|
— |
% |
|
|
— |
|
|
— |
% |
Net loss before income taxes |
|
(49,180 |
) |
|
(48 |
)% |
|
|
(30,045 |
) |
|
(49 |
)% |
Income tax expense |
|
20 |
|
|
— |
% |
|
|
— |
|
|
— |
% |
Net loss |
$ |
(49,200 |
) |
|
(48 |
)% |
|
$ |
(30,045 |
) |
|
(49 |
)% |
Earnings per share: |
|
|
|
|
|
|
|
||||||
Net loss per share, Class S and Common stock basic and diluted |
$ |
(0.45 |
) |
|
|
|
$ |
(1.77 |
) |
|
|
||
Weighted average shares used in computing net loss per share, Class S and Common stock basic and diluted |
|
109,472,050 |
|
|
|
|
|
16,962,694 |
|
|
|
|
||||||
SELECTED BALANCE SHEET, CASH FLOW AND OPERATING DATA |
||||||
( in thousands) |
||||||
(unaudited) |
||||||
|
As of |
|
As of |
|
||
SELECTED BALANCE SHEET DATA: |
|
|
|
|
||
Cash and cash equivalents |
$ |
436,517 |
|
$ |
471,971 |
|
Total assets |
$ |
737,725 |
|
$ |
762,649 |
|
Total liabilities |
$ |
110,794 |
|
$ |
109,532 |
|
Total stockholders’ deficit |
$ |
626,931 |
|
$ |
653,117 |
|
|
Thirteen Weeks Ended |
||||||
|
|
|
|
||||
SELECTED CASH FLOW: |
|
|
|
||||
Net cash used in operating activities |
|
(16,753 |
) |
|
|
(16,464 |
) |
Net cash used in investing activities |
|
(19,605 |
) |
|
|
(17,853 |
) |
Net cash provided by financing activities |
|
849 |
|
|
|
116,271 |
|
Net (decrease) increase in cash and cash equivalents and restricted cash |
$ |
(35,509 |
) |
|
$ |
81,954 |
|
|
Thirteen Weeks Ended |
|
||||||
|
|
|
|
|
||||
SELECTED OPERATING DATA: |
|
|
|
|
||||
Net New Restaurant Openings |
|
8 |
|
|
|
1 |
|
|
Average Unit Volume (as adjusted)(1) |
$ |
2,793 |
|
|
$ |
2,075 |
|
|
Same-Store Sales Change (%) |
|
35 |
% |
|
|
(26 |
%) |
|
Restaurant-Level Profit |
$ |
13,299 |
|
|
$ |
2,102 |
|
|
Restaurant-Level Profit Margin (%) |
|
13 |
% |
|
|
3 |
% |
|
Adjusted EBITDA |
$ |
(16,541 |
) |
|
$ |
(21,015 |
) |
|
Adjusted EBITDA Margin (%) |
|
(16 |
)% |
|
|
(34 |
)% |
|
Total Digital Revenue Percentage |
|
66 |
% |
|
|
77 |
% |
|
Owned Digital Revenue Percentage |
|
43 |
% |
|
|
53 |
% |
|
(1) |
Our results for the thirteen weeks ended |
Reconciliation of GAAP to Non-GAAP Measures
(dollars in thousands)
(unaudited)
The following table sets forth a reconciliation of our loss from operations to Restaurant-Level Profit, as well as the calculation of loss from operations margin and Restaurant-Level Profit Margin for each of the periods indicated:
|
Thirteen Weeks Ended |
|
|
||||||
|
|
|
|
|
|
||||
Loss from operations |
$ |
(49,570 |
) |
|
$ |
(30,137 |
) |
|
|
Add back: |
|
|
|
|
|
||||
General and administrative |
|
49,672 |
|
|
|
23,380 |
|
|
|
Depreciation and amortization |
|
10,677 |
|
|
|
7,847 |
|
|
|
Pre-opening costs |
|
2,512 |
|
|
|
961 |
|
|
|
Loss on disposal of property and equipment(1) |
|
8 |
|
|
|
51 |
|
|
|
Restaurant-Level Profit |
$ |
13,299 |
|
|
$ |
2,102 |
|
|
|
Loss from operations margin |
|
(48 |
)% |
|
|
(49 |
)% |
|
|
Restaurant-Level Profit Margin |
|
13 |
% |
|
|
3 |
% |
|
|
(1) | Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment. |
The following table sets forth a reconciliation of our net loss to Adjusted EBITDA, as well as the calculation of net loss margin and Adjusted EBITDA Margin for each of the periods indicated:
|
Thirteen Weeks Ended |
|
|
||||||
|
|
|
|
|
|
||||
Net loss |
$ |
(49,200 |
) |
|
$ |
(30,045 |
) |
|
|
Non-GAAP adjustments: |
|
|
|
|
|
||||
Income tax expense |
|
20 |
|
|
|
— |
|
|
|
Interest income |
|
(168 |
) |
|
|
(112 |
) |
|
|
Interest expense |
|
23 |
|
|
|
20 |
|
|
|
Depreciation and amortization |
|
10,677 |
|
|
|
7,847 |
|
|
|
Stock-based compensation(1) |
|
22,165 |
|
|
|
1,224 |
|
|
|
Loss on disposal of property and equipment(2) |
|
8 |
|
|
|
51 |
|
|
|
Other income(3) |
|
(245 |
) |
|
|
— |
|
|
|
Spyce acquisition costs(4) |
|
179 |
|
|
|
— |
|
|
|
Adjusted EBITDA |
$ |
(16,541 |
) |
|
$ |
(21,015 |
) |
|
|
Net loss margin |
|
(48 |
)% |
|
|
(49 |
)% |
|
|
Adjusted EBITDA Margin |
|
(16 |
)% |
|
|
(34 |
)% |
|
|
(1) | Includes non-cash, stock-based compensation. |
|
(2) | Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment. |
|
(3) | Other income includes the change in fair value of the contingent consideration. |
|
(4) | Spyce acquisition costs includes one-time costs we incurred in order to acquire Spyce including, severance payments, retention bonuses, and valuation and legal expenses. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220505005985/en/
sweetgreen Contact, Investor Relations:
ir@sweetgreen.com
sweetgreen Contact, Media:
press@sweetgreen.com
Source:
FAQ
What were Sweetgreen's financial results for Q1 2022?
How many new restaurants did Sweetgreen open in Q1 2022?
What is Sweetgreen's revenue outlook for 2022?
What is Sweetgreen's same-store sales change for Q1 2022?