• Revenue: $184.6 million, 21% year-over-year growth.

• Same-Store Sales Growth: 9% year-over-year.

• Restaurant-Level Margin: 22.5%, over 200 basis points improvement year-over-year.

• Adjusted EBITDA: $12.4 million for the quarter.

• Net Loss: $14.5 million, reduced from $27.3 million in the prior-year period.

• New Restaurant Openings: Four new restaurants opened in Q2 2024.

• Total Restaurants: 231 at the end of the quarter.

• Cash Balance: $245 million at the end of the quarter.

• Operating Cash Flow: Positive $22.5 million for the first six months of 2024.

• Warning! GuruFocus has detected 8 Warning Sign with PX.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sweetgreen Inc (NYSE:SG) reported a strong second quarter with sales of $184.6 million, representing a 21% year-over-year growth.

• Same-store sales grew by 9%, driven by a 5% benefit from menu price increases and a 4% increase in positive traffic and mix.

• Restaurant-level margins expanded over 200 basis points year over year to 22.5%, marking one of the highest performances in the company's history.

• The company successfully opened four new restaurants in strategic locations, including a new market in New Hampshire, with new openings outperforming existing fleet averages.

• Sweetgreen Inc (NYSE:SG) completed its first Infinite Kitchen retrofit at Penn Plaza, achieving high throughput levels and positive customer feedback, indicating potential for future scalability.

Negative Points

• Despite strong performance, Sweetgreen Inc (NYSE:SG) remains cautious about the uncertain US economic backdrop, which could impact future growth.

• Net loss for the second quarter was $14.5 million, although this was an improvement from the previous year's loss.

• The company experienced a higher level of repair and maintenance expenses, particularly around HVAC systems, impacting other operating expenses.

• There is a degree of uncertainty regarding the scalability and cost efficiency of the Infinite Kitchen, as it is still in early stages of deployment.

• Sweetgreen Inc (NYSE:SG) faces challenges in maintaining consistent average unit volumes (AUVs) despite strong same-store sales growth, partly due to new store dynamics.

Q & A Highlights

Q: The quarter comp was impressive with an uptick in transaction and mix. Can you clarify the primary driver between these components and the impact of the macro environment? A: Mitchell Reback, CFO, explained that traffic was positive and sequentially built each month, with the mix benefit largely due to the steak launch. Despite macroeconomic uncertainties, Sweetgreen's business picked up after July 4, with the last three weeks of July comping at the top end of guidance.