Key Takeaways
- Sweetgreen beat revenue estimates and raised its outlook as new restaurants and a boost in menu prices drove up sales.
- Same-store sales and restaurant-level profit margin also rose.
- The news sent shares soaring to their highest level in more than two years.
Shares of Sweetgreen (SG) skyrocketed over 40% in early trading Friday after the salad restaurant chain posted better-than-expected sales and boosted its guidance as it expanded operations and raised prices.
The company reported first-quarter revenue was up 26.2% year-over-year to $157.9 million, beating estimates. Same-store sales increased 5%. Restaurant-level profit margin climbed 400 basis points (bps) to 18%. However, its loss of 23 cents per share was wider than expected.
$211 Million Incremental Gain From New Restaurants
Sweetgreen attributed the higher revenue primarily to a $211 million incremental gain from the addition of 41 new restaurants during or subsequent to the first quarter last year. In addition, the company noted it benefited from higher menu prices since then.
Co-founder and CEO Jonathan Neman noted that Sweetgreen delivered positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of $113 million “during a traditionally slower first quarter.”
Full-Year Outlook Raised
The company lifted its full-year outlook for same-store sales to a jump of 4% to 6% from the previous 3% to 5%, restaurant-level profit margin to 18.5% to 20% from 18% to 19.5%, and EBITDA to $10 million to $19 million from $8 million to $15 million.
Sweetgreen shares were over 40% higher at $33.26 as of 10:50 a.m. ET Friday, their highest level in more than two years.
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