Sweetgreen, Inc. Q2 FY2024 earnings call

• Strong second quarter with 21% YOY sales growth and 22.5% restaurant level margin.
• Launched Caramelized Garlic Steak, which drove same-store sales, especially at dinner and on weekends.
• Opened 4 new restaurants in Q2, including a new market in Salem, New Hampshire.
• Completed first Infinite Kitchen retrofit at Penn Plaza, showing strong throughput and performance.
• Focus on brand building through culinary innovation and guest experiences, and expanding through strong restaurant openings.
• Incentives aligned with ownership mindset, investing in employee experience and leadership skills development.

Sweetgreen reported sales of $184.6 million in the second quarter of 2024, representing 21% year-over-year growth. Same-store sales grew 9%, consisting of a 5% menu price benefit and 4% positive traffic and mix. Restaurant level margin was 22.5% for the quarter, expanding over 200 basis points year-over-year. Adjusted EBITDA was $12.4 million. The company opened 4 new restaurants during the quarter, including in Washington, DC, Chicago, Morristown, New Jersey, and Salem, New Hampshire. Infinite Kitchens showed strong performance, with Naperville crossing one year anniversary with $2.8 million in sales and strong metrics at Penn Plaza and Huntington Beach. Revenue contribution from various segments is primarily from restaurant operations, with new menu items like Caramelized Garlic Steak contributing to mix and sales growth.

• Fiscal 2024 revenue guidance: $670 million to $680 million.
• Same-Store sales growth expected to be between 5% and 7%.
• Restaurant level margins targeted between 19% and 20%.
• Adjusted EBITDA expected between $16 million and $19 million.
• 2024 to open 24 to 26 net new restaurants, with 7 featuring Infinite Kitchen.

• Uncertain U.S. economic backdrop poses a cautious outlook for the second half of 2024.
• External factors beyond the company's control may impact business performance.

Q: Corner comp impressive, driver of traffic vs mix?

A: Traffic grew sequentially throughout the quarter, and the mix benefit was largely attributable to the launch of Caramelized Garlic Steak.

Q: Marketing strategy for menu innovation?

A: Incorporating menu innovation into go-forward strategy, leveraging out-of-home marketing with strong results from new item launches.

Q: Infinite Kitchen deployment?

A: Expect majority of new units in the pipeline to include Infinite Kitchen next year, with a focus on high-volume or labor-challenged locations initially.

Q: Restaurant margin trends?

A: Margins expected to expand through labor optimization, occupancy improvements, and leveraging of Infinite Kitchen for supercharged margin growth.

Q: Expansion in new markets?

A: Focus on densifying existing markets and expanding into adjacent areas, seeing success in emerging markets and expecting leverage from supply chain and economies of scale in these areas.