Core Insights - Sweetgreen's first quarter of 2025 showed a revenue increase of 5.4%, indicating a reasonably strong performance despite economic uncertainties [4] - However, same-store sales fell by 3.1%, down from a 5% increase in the previous year, highlighting underlying weaknesses in customer demand [6] Company Overview - Sweetgreen operates as a fast-food restaurant chain primarily focused on salads, but the overall business performance is more critical than the specific food offerings [2] - The company has around 250 locations and opened five new stores in the first quarter, projecting an 8% expansion in store count for the year [8] Financial Performance - The increase in revenue is largely attributed to new store openings, which can significantly boost top-line figures, especially for a smaller chain [9] - The company reported a smaller loss in the first quarter of 2025 compared to the same period in 2024, aided by a larger share count [10] Market Dynamics - The relationship between same-store sales and overall revenue is crucial for understanding the health of the business, particularly for a company pursuing aggressive expansion [8] - Investors should monitor same-store sales closely, as a continued decline could indicate more significant long-term challenges than management may suggest [13]

Core Insights - Sweetgreen, Inc. (NYSE: SG) has faced a series of negative developments recently, including downgrades from Wall Street analysts and unfavorable headlines [1] Company Overview - Sweetgreen is a salad chain that was once considered high-flying but is currently struggling with its market perception and performance [1] Analyst Background - Gary Alexander, who has extensive experience in technology and investment, has been involved with various startups and contributes regularly to Seeking Alpha, indicating a knowledgeable perspective on industry trends [1]

For the quarter ended March 2025, Sweetgreen, Inc. (SG) reported revenue of $166.3 million, up 5.4% over the same period last year. EPS came in at -$0.21, compared to -$0.23 in the year-ago quarter.The reported revenue represents a surprise of +0.51% over the Zacks Consensus Estimate of $165.46 million. With the consensus EPS estimate being -$0.21, the company has not delivered EPS surprise.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectati ...

Sweetgreen, Inc. (SG) came out with a quarterly loss of $0.21 per share in line with the Zacks Consensus Estimate. This compares to loss of $0.23 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this company would post a loss of $0.21 per share when it actually produced a loss of $0.25, delivering a surprise of -19.05%.Over the last four quarters, the company has not been able to surpass consensus EPS estimates.Sweetgreen, which belongs to the Zack ...

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $166.3 million, up from $157.9 million in the same period last year, reflecting a year-over-year increase [30] - Same store sales declined by 3.1%, with a 3.4% benefit from menu price increases and a negative 6.5% impact from traffic and mix [30] - Restaurant level profit margin was 17.9%, compared to 18.1% a year ago, while restaurant level profit increased by 4% year over year to $29.7 million [31] - Net loss for the quarter was $25 million, an improvement from a loss of $26.1 million in the prior year [32] - Adjusted EBITDA was $300,000 for the first quarter, indicating slight profitability [33] Business Line Data and Key Metrics Changes - Five new restaurants were opened, bringing the total to 251 [11] - The average unit volume in the first quarter was $2.9 million [31] - The Infinite Kitchen format is showing strong performance, delivering higher digital sales and operational efficiencies compared to traditional formats [12][37] Market Data and Key Metrics Changes - Same store sales grew in more than half of the markets, particularly in the Upper Midwest, Texas, and Colorado, which all experienced double-digit growth [30] - The company noted a decline in sales trends in major markets like New York, Boston, and Los Angeles, attributed to broader consumer slowdown [9][62] Company Strategy and Development Direction - The company aims to revolutionize fast food through menu and technology innovation, strengthen guest connection, and strategically expand its footprint [10] - Plans for 2025 include entering three new markets (Sacramento, Phoenix, Cincinnati) and opening at least 40 new restaurants, with 20 featuring the Infinite Kitchen [14] - The company is focusing on menu innovation, including the recent launch of Ripple Fries and a collaboration with a Michelin-starred Korean steakhouse [15][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macro environment and declining consumer sentiment, which has impacted sales [27][39] - The company remains confident in its ability to deliver long-term value through its loyalty program and menu innovations [28][41] - Management expects a challenging second quarter but anticipates a recovery in the latter half of the year due to easier comparisons and seasonal menu launches [71] Other Important Information - The company has launched a reimagined loyalty program, SG Rewards, which has seen strong adoption with 20,000 new digital customers added weekly [21][103] - The implementation of an AI-powered workforce management system is expected to enhance operational efficiency and reduce absenteeism [23] Q&A Session Summary Question: Clarification on tariff impacts on build-out costs - Management clarified that the build-out cost for new restaurants will see a 10% increase due to tariffs, with specific impacts on the Infinite Kitchen format [46][47] Question: Plans for mid to lower-priced menu items - Management indicated that they are exploring seasonal menu options and loyalty program promotions to introduce more mid to lower-priced items [52][56] Question: Geographic performance differences - Management noted that Los Angeles is still recovering from the wildfires, while changes in DC performance were also observed [62][63] Question: Sales cadence expectations for 2025 - Management expects a challenging second quarter but anticipates improvement in the latter half of the year due to seasonal offerings and the loyalty program [71] Question: Impact of tariffs on Infinite Kitchen deployment - Management confirmed that current tariff structures would not change the deployment strategy for Infinite Kitchens [74] Question: Updates on capital allocation and investment priorities - Management reiterated the commitment to 15% to 20% annual unit growth, emphasizing strong returns on capital for new stores [100][101]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $166.3 million, up from $157.9 million in Q1 2024, reflecting a year-over-year increase [28] - Same store sales declined by 3.1%, with a 3.4% benefit from menu price increases and a negative 6.5% impact from traffic and mix [28] - Restaurant level profit margin was 17.9%, compared to 18.1% a year ago, with restaurant level profit increasing by 4% year over year to $29.7 million [29] - Net loss for the quarter was $25 million, an improvement from a loss of $26.1 million in the prior year [30] - Adjusted EBITDA was $300,000 for the first quarter, indicating slight profitability [31] Business Line Data and Key Metrics Changes - Five new restaurants were opened, bringing the total to 251 [9] - The average unit volume (AUV) for the first quarter was $2.9 million [28] - The Infinite Kitchen format showed strong performance, delivering higher digital sales and operational efficiencies [11][34] Market Data and Key Metrics Changes - Same store sales grew in more than half of the markets, particularly in the Upper Midwest, Texas, and Colorado, which all experienced double-digit growth [28] - Los Angeles continued to be impacted by the aftermath of wildfires, affecting sales performance [57] Company Strategy and Development Direction - The company’s strategic pillars for 2025 include menu and technology innovation, strengthening guest connection, and expanding its footprint [8] - Plans to enter three new markets (Sacramento, Phoenix, and Cincinnati) and open at least 40 new restaurants, including 20 with the Infinite Kitchen format [13] - The company aims to enhance its loyalty program and menu innovation to drive customer engagement and sales [20][26] Management's Comments on Operating Environment and Future Outlook - The macro environment remains uncertain, with April sales trends reflecting a broader consumer slowdown [7] - Management expressed confidence in the long-term value delivery despite current challenges, emphasizing operational excellence and continuous improvement [7][25] - The company anticipates flat same store sales growth for the fiscal year, with revenue guidance between $740 million and $760 million [38] Other Important Information - The company launched a reimagined loyalty program, SG Rewards, which has seen strong adoption with 20,000 new digital customers added weekly [20] - The company is focused on optimizing operations and enhancing guest experience through technology and menu innovation [22][21] Q&A Session Summary Question: Clarification on tariff impacts on build-out costs - The build-out cost for new restaurants is expected to increase by approximately 10% due to tariffs, with specific impacts on the Infinite Kitchen format [42][44] Question: Plans for mid to lower-priced menu items - The company is exploring opportunities to introduce mid to lower-priced items through seasonal menus and loyalty programs, without presenting them as a traditional value menu [49][51] Question: Geographic performance differences - Notable performance differences were observed in Los Angeles due to wildfires and changes in Washington DC, where older stores experienced a decline [57][58] Question: Sales cadence expectations for 2025 - The second quarter is expected to be challenging, but the company anticipates improved performance in the second half of the year due to easier comparisons and seasonal menu launches [66] Question: Impact of tariffs on Infinite Kitchen deployment - Current tariff structures will not change the deployment strategy for Infinite Kitchens, as the return on capital remains favorable [68] Question: Updates on capital allocation and investment priorities - The company maintains a growth target of 15% to 20% for new unit openings, with strong returns on capital supporting this strategy [92][95] Question: Metrics on the SG Rewards program - The loyalty program has successfully acquired 20,000 new digital customers weekly, providing valuable data for customer engagement and menu development [96][98]

Sweetgreen, Inc. Announces First Quarter 2025 Financial Results LOS ANGELES--(BUSINESS WIRE)-- Sweetgreen, Inc. (NYSE: SG) (the "Company"), the mission-driven, next- generation restaurant and lifestyle brand that serves healthy food at scale, today announced financial results for its first fiscal quarter ended March 30, 2025. First quarter 2025 financial highlights For the first quarter of fiscal year 2025, compared to the first quarter of fiscal year 2024: (1) Restaurant-Level Profit, Restaurant-Level Prof ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) [Registrant Information](index=1&type=section&id=Registrant%20Information) SWEETGREEN, INC. filed its Quarterly Report on Form 10-Q for the period ended March 30, 2025, incorporated in Delaware, trading Class A Common Stock under SG on the NYSE, and classified as a large accelerated filer - Registrant: **SWEETGREEN, INC.**[2](index=2&type=chunk) - Filing Type: Quarterly Report on Form 10-Q for the period ended March 30, 2025[2](index=2&type=chunk) Trading Information | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Class A Common Stock | SG | New York Stock Exchange | - Filer Status: **Large accelerated filer**[4](index=4&type=chunk) [Outstanding Shares](index=2&type=section&id=Outstanding%20Shares) As of May 5, 2025, Sweetgreen, Inc. had 105,788,297 shares of Class A common stock and 11,893,558 shares of Class B common stock outstanding Shares Outstanding (as of May 5, 2025) | Class of Stock | Shares Outstanding (as of May 5, 2025) | | :--------------- | :------------------------------------- | | Class A Common Stock | 105,788,297 | | Class B Common Stock | 11,893,558 | [Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section outlines the company's forward-looking statements, which are subject to substantial risks and uncertainties, covering expectations regarding revenue, operating costs, new restaurant openings, Infinite Kitchen integration, macroeconomic trends, and profitability - Forward-looking statements are covered by safe harbor provisions and include expectations on revenue, operating costs, new restaurant openings, Infinite Kitchen units, macroeconomic trends, and profitability[9](index=9&type=chunk) - Key risks and uncertainties include effective competition, changes in economic conditions, geopolitical events, ability to open new restaurants, impact of severe weather, profitability of new restaurants, ability to deploy Infinite Kitchen technology, brand value preservation, food safety concerns, labor costs, pandemics, and governmental regulations[10](index=10&type=chunk) - The company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the report date, except as required by law[13](index=13&type=chunk)[14](index=14&type=chunk) [Glossary](index=4&type=section&id=GLOSSARY) [General Definitions](index=4&type=section&id=General%20Definitions) This section defines 'Comparable Restaurant Base' as restaurants operating for at least twelve full months, excluding those with material temporary closures of 30 days or more - Comparable Restaurant Base: All restaurants operated for at least twelve full months, excluding those with material, temporary closures (at least 30 consecutive days)[16](index=16&type=chunk) - One restaurant was excluded from the Comparable Restaurant Base for the thirteen weeks ended March 30, 2025, with no material change to key performance metrics[16](index=16&type=chunk) [Sales Channels](index=4&type=section&id=Sales%20Channels) Sweetgreen operates through five main sales channels: In-Store, Marketplace, Native Delivery, Outpost and Catering, and Pick-Up, with Owned Digital Channels encompassing Pick-Up, Native Delivery, Outpost and Catering, and digital In-Store purchases - Five main sales channels: In-Store, Marketplace, Native Delivery, Outpost and Catering, and Pick-Up[17](index=17&type=chunk) - Owned Digital Channels include Pick-Up, Native Delivery, Outpost and Catering, and digital In-Store purchases via SG Rewards[21](index=21&type=chunk) - Total Digital Channels comprise Owned Digital Channels and the Marketplace Channel, excluding Non-Digital In-Store transactions[22](index=22&type=chunk) [Key Performance Metrics and Non-GAAP Financial Measures Reference](index=4&type=section&id=Key%20Performance%20Metrics%20and%20Non-GAAP%20Financial%20Measures%20Reference) Definitions for key performance metrics and Non-GAAP financial measures are provided in the 'Management's Discussion and Analysis of Financial Condition and Results of Operations' section - Definitions for key performance metrics and Non-GAAP financial measures are located in 'Management's Discussion and Analysis of Financial Condition and Results of Operations'[23](index=23&type=chunk)[24](index=24&type=chunk) [Part I Financial Information](index=6&type=section&id=Part%20I%20Financial%20Information) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Sweetgreen, Inc. and its subsidiaries, including balance sheets, statements of operations, stockholders' (deficit) equity, and cash flows, along with detailed notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Metric (in thousands) | As of March 30, 2025 | As of December 29, 2024 | | :-------------------- | :------------------- | :---------------------- | | Total current assets | $206,166 | $234,537 | | Total assets | $834,320 | $856,758 | | Total current liabilities | $104,822 | $115,827 | | Total liabilities | $401,566 | $410,613 | | Total stockholders' equity | $432,754 | $446,145 | - Total assets decreased by **$22.4 million**, and total liabilities decreased by **$9.0 million** from December 29, 2024, to March 30, 2025[25](index=25&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of Operations Summary (in thousands, except per share) | Metric (in thousands, except per share) | Thirteen weeks ended March 30, 2025 | Thirteen weeks ended March 31, 2024 | | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Revenue | $166,304 | $157,850 | | Total restaurant operating costs | $136,617 | $129,313 | | Total operating expenses | $58,224 | $55,452 | | Loss from operations | $(28,537) | $(26,915) | | Net loss | $(25,039) | $(26,067) | | Net loss per share basic and diluted | $(0.21) | $(0.23) | - Revenue increased by **$8.45 million (5.4%)** year-over-year, while net loss decreased by **$1.03 million (3.9%)**, leading to an improved net loss per share[26](index=26&type=chunk) [Condensed Consolidated Statement of Stockholders' (Deficit) Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20(Deficit)%20Equity) Stockholders' Equity Summary (in thousands) | Metric (in thousands) | Balances at December 29, 2024 | Balances at March 30, 2025 | | :-------------------- | :---------------------------- | :------------------------- | | Additional Paid-in Capital | $1,321,386 | $1,333,033 | | Accumulated Deficit | $(875,358) | $(900,397) | | Total Stockholders' Equity | $446,145 | $432,754 | - Total stockholders' equity decreased by **$13.39 million**, primarily due to a net loss of **$25.04 million**, partially offset by **$10.22 million** in stock-based compensation expense and proceeds from stock option exercises[28](index=28&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Cash Flow Activity (in thousands) | Thirteen weeks ended March 30, 2025 | Thirteen weeks ended March 31, 2024 | | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Net cash (used in) operating activities | $(13,128) | $3,426 | | Net cash used in investing activities | $(19,132) | $(15,022) | | Net cash provided by (used in) financing activities | $1,427 | $(1,878) | | Net decrease in cash and cash equivalents and restricted cash | $(30,833) | $(13,474) | | Cash and cash equivalents and restricted cash—end of period | $186,596 | $243,881 | - Operating activities shifted from a cash inflow of **$3.43 million** in Q1 2024 to a cash outflow of **$13.13 million** in Q1 2025[30](index=30&type=chunk) - Investing activities saw an increased cash outflow, primarily due to higher purchases of property and equipment and intangible assets[30](index=30&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [1. Description of Business and Summary of Significant Accounting Policies](index=10&type=section&id=1.%20Description%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) Sweetgreen, Inc. is a mission-driven restaurant brand serving healthy food, operating 251 restaurants in 22 states and Washington, D.C. as of March 30, 2025, with 5 Net New Restaurant Openings during the thirteen weeks ended March 30, 2025 - As of March 30, 2025, the Company owned and operated **251 restaurants** in 22 states and Washington, D.C.[32](index=32&type=chunk) - During the thirteen weeks ended March 30, 2025, the Company had **5 Net New Restaurant Openings**[32](index=32&type=chunk) - The Company's fiscal year is a 52- or 53-week period ending on the Sunday closest to the last day of December[36](index=36&type=chunk) [2. Revenue Recognition](index=11&type=section&id=2.%20Revenue%20Recognition) Sweetgreen recognizes revenue from food and beverage sales across Owned Digital Channels, In-Store Channel, and Marketplace Channel, with total revenue for the thirteen weeks ended March 30, 2025, at $166.3 million Revenue by Channel (in thousands) | Revenue Channel (in thousands) | Thirteen weeks ended March 30, 2025 | Thirteen weeks ended March 31, 2024 | | :----------------------------- | :---------------------------------- | :---------------------------------- | | Owned Digital Channels | $52,984 | $51,812 | | In-Store Channel (Non-Digital component) | $66,706 | $64,927 | | Marketplace Channel | $46,614 | $41,111 | | Total Revenue | $166,304 | $157,850 | - Revenue recognized from gift card liability balance at the beginning of the year decreased from **$664 thousand** in Q1 2024 to **$411 thousand** in Q1 2025[46](index=46&type=chunk) [3. Fair Value](index=12&type=section&id=3.%20Fair%20Value) The company's financial liabilities measured at fair value primarily consist of contingent consideration related to the Spyce acquisition, which decreased from $14.97 million as of December 29, 2024, to $13.29 million as of March 30, 2025 Contingent Consideration (in thousands) | Metric (in thousands) | As of March 30, 2025 | As of December 29, 2024 | | :-------------------- | :------------------- | :---------------------- | | Contingent consideration | $13,289 | $14,974 | - The fair value of contingent consideration is determined using the Monte Carlo method, considering equity value, contractual terms, liquidity event scenarios, discount rate, volatility, risk-free rate, and probability of milestone achievement[49](index=49&type=chunk) - During Q4 2023, the first Spyce milestone was achieved, resulting in **$2.1 million** in Class A common stock and **$3.9 million** in cash paid to former Spyce equity holders in Q1 2024[49](index=49&type=chunk) [4. Property and Equipment](index=13&type=section&id=4.%20Property%20and%20Equipment) Property and equipment, net, increased slightly to $298.23 million as of March 30, 2025, from $296.49 million at December 29, 2024, with 9 facilities under construction expected to open in fiscal year 2025 Property and Equipment, Net (in thousands) | Metric (in thousands) | As of March 30, 2025 | As of December 29, 2024 | | :-------------------- | :------------------- | :---------------------- | | Total property and equipment | $552,612 | $535,897 | | Less: accumulated depreciation | $(254,378) | $(239,412) | | Property and equipment, net | $298,234 | $296,485 | - Depreciation expense for the thirteen weeks ended March 30, 2025, was **$14.4 million**, up from **$13.7 million** in the prior year period[53](index=53&type=chunk) - As of March 30, 2025, **9 facilities** were under construction, with **5** already opened in fiscal year 2025 and the remaining **4** due to open later in the year[54](index=54&type=chunk) [5. Goodwill and Intangible Assets, Net](index=13&type=section&id=5.%20Goodwill%20and%20Intangible%20Assets,%20Net) Goodwill remained unchanged at $36.0 million during the thirteen weeks ended March 30, 2025, while intangible assets, net, decreased slightly to $23.65 million, primarily due to amortization - Goodwill carrying amount remained **$36.0 million** with no changes during the thirteen weeks ended March 30, 2025[55](index=55&type=chunk) Intangible Assets, Net (in thousands) | Metric (in thousands) | As of March 30, 2025 | As of December 29, 2024 | | :-------------------- | :------------------- | :---------------------- | | Internal use software | $48,252 | $45,933 | | Developed technology | $20,050 | $20,050 | | Total intangible assets | $68,302 | $65,983 | | Accumulated amortization | $(44,650) | $(41,943) | | Intangible assets, net | $23,652 | $24,040 | - Amortization expense for intangible assets was **$2.7 million** for the thirteen weeks ended March 30, 2025, slightly down from **$2.8 million** in the prior year period[56](index=56&type=chunk) [6. Accrued Expenses](index=14&type=section&id=6.%20Accrued%20Expenses) Total accrued expenses decreased from $26.56 million as of December 29, 2024, to $25.99 million as of March 30, 2025, with notable changes including an increase in accrued general and sales tax and a decrease in fixed asset accrual and accrued settlements and legal fees Accrued Expenses Summary (in thousands) | Accrued Expense (in thousands) | As of March 30, 2025 | As of December 29, 2024 | | :----------------------------- | :------------------- | :---------------------- | | Accrued general and sales tax | $6,288 | $4,625 | | Fixed asset accrual | $4,689 | $5,983 | | Accrued settlements and legal fees | $1,869 | $3,529 | | Total accrued expenses | $25,998 | $26,564 | [7. Debt](index=14&type=section&id=7.%20Debt) The company's Credit Facility with EagleBank, which allowed borrowing up to $45.0 million, expired on December 13, 2024, and was not renewed, leaving the company with no outstanding debt as of March 30, 2025 - The Credit Facility with EagleBank, allowing up to **$45.0 million** in borrowing, expired on December 13, 2024, and was not renewed[59](index=59&type=chunk) [8. Leases](index=14&type=section&id=8.%20Leases) Sweetgreen leases restaurants and corporate office space, with total lease cost for the thirteen weeks ended March 30, 2025, increasing to $16.94 million from $15.44 million in the prior year Lease Costs (in thousands) | Lease Cost (in thousands) | Thirteen weeks ended March 30, 2025 | Thirteen weeks ended March 31, 2024 | | :------------------------ | :---------------------------------- | :---------------------------------- | | Operating lease cost | $13,724 | $12,382 | | Variable lease cost | $3,138 | $2,947 | | Short term lease cost | $79 | $114 | | Total lease cost | $16,941 | $15,443 | Lease Metrics | Lease Metric | March 30, 2025 | December 29, 2024 | | :-------------------------------- | :------------- | :---------------- | | Weighted average remaining lease term (years) | 7.28 | 7.32 | | Weighted average discount rate | 6.79 % | 6.75 % | - Future minimum lease payments for operating leases total **$428.12 million**, with **$40.61 million** due in 2025[62](index=62&type=chunk) [9. Common Stock](index=15&type=section&id=9.%20Common%20Stock) As of March 30, 2025, Sweetgreen had reserved 31.16 million shares of common stock for issuance under various equity plans, representing a slight decrease from 31.71 million shares reserved as of December 29, 2024 Reserved Shares (in thousands) | Reserved Shares (in thousands) | As of March 30, 2025 | As of December 29, 2024 | | :----------------------------- | :------------------- | :---------------------- | | Options outstanding | 14,099,610 | 13,169,869 | | Shares reserved for Spyce milestones | 500,000 | 500,000 | | Shares reserved for employee stock purchase plan | 4,111,331 | 4,111,331 | | RSUs and PSUs outstanding | 5,237,201 | 5,410,024 | | Shares available for future issuance under 2021 Plan | 7,209,966 | 8,516,216 | | Total reserved shares of common stock | 31,158,108 | 31,707,440 | [10. Stock-Based Compensation](index=16&type=section&id=10.%20Stock-Based%20Compensation) Total stock-based compensation expense for the thirteen weeks ended March 30, 2025, was $10.22 million, an increase from $9.63 million in the prior year period, including expenses for stock options, RSUs, and PSUs Stock-Based Compensation Expense (in thousands) | Stock-Based Compensation Expense (in thousands) | Thirteen weeks ended March 30, 2025 | Thirteen weeks ended March 31, 2024 | | :-------------------------------------------- | :---------------------------------- | :---------------------------------- | | Stock-options | $2,618 | $2,336 | | Restricted stock units | $4,208 | $1,648 | | Performance stock units | $3,395 | $5,642 | | Total stock-based compensation | $10,221 | $9,626 | - As of March 30, 2025, unrecognized compensation expense for unvested stock-based compensation arrangements was **$33.0 million**, expected to be recognized over a weighted average period of **2.25 years**[73](index=73&type=chunk) - Unrecognized compensation expense related to RSUs was **$8.9 million**, expected to be recognized over **1.71 years**[74](index=74&type=chunk) - Unrecognized compensation expense related to founder PSUs was **$6.4 million**, expected to be recognized over **0.66 years**[76](index=76&type=chunk) [11. Income Taxes](index=19&type=section&id=11.%20Income%20Taxes) The company recorded $0.1 million in income tax expense for both the thirteen weeks ended March 30, 2025, and March 31, 2024, and has received $3.4 million in cash payments for Employee Retention Tax Credits (ERC) - Income tax expense was **$0.1 million** for both Q1 2025 and Q1 2024[80](index=80&type=chunk) - The Company has received **$3.4 million** in cash payments for Employee Retention Tax Credits (ERC), reducing the ERC receivable to **$3.6 million** as of March 30, 2025[81](index=81&type=chunk) [12. Net Loss Per Share](index=19&type=section&id=12.%20Net%20Loss%20Per%20Share) Net loss per share, basic and diluted, improved to $(0.21) for the thirteen weeks ended March 30, 2025, from $(0.23) in the prior year period, with potentially dilutive securities excluded due to their anti-dilutive effect Net Loss Per Share (in thousands) | Metric | Thirteen weeks ended March 30, 2025 | Thirteen weeks ended March 31, 2024 | | :------------------------------------------ | :---------------------------------- | :---------------------------------- | | Net loss | $(25,039) | $(26,067) | | Weighted-average common shares outstanding | 117,307,189 | 112,772,776 | | Earnings per share—basic and diluted | $(0.21) | $(0.23) | - Potentially dilutive securities, totaling **19,836,811 common stock equivalents** as of March 30, 2025, were excluded from diluted EPS calculation due to their anti-dilutive effect[84](index=84&type=chunk) [13. Related-Party Transactions](index=20&type=section&id=13.%20Related-Party%20Transactions) The company made payments totaling $1.5 million to Welcome to the Dairy, LLC, for its principal corporate headquarters lease during the thirteen weeks ended March 30, 2025, with certain founders and the CFO holding indirect minority passive interests in an entity that owns equity interests in Welcome to the Dairy, LLC - Total payments to Welcome to the Dairy, LLC, for the principal corporate headquarters lease were **$1.5 million** for the thirteen weeks ended March 30, 2025, an increase from **$1.0 million** in the prior year period[85](index=85&type=chunk) [14. Commitments and Contingencies](index=20&type=section&id=14.%20Commitments%20and%20Contingencies) Sweetgreen is subject to various operating lease and purchase obligations, with the majority of purchase obligations due within the next twelve months, and does not anticipate a material effect from legal proceedings - The Company is obligated under various operating leases for office facilities, restaurant locations, and equipment[86](index=86&type=chunk) - Purchase obligations primarily relate to restaurant supplies and are due within the next twelve months[87](index=87&type=chunk) - The Company does not believe that the ultimate resolution of current legal matters will have a material effect on its financial position, results of operations, liquidity, or capital resources[88](index=88&type=chunk) [15. Reportable Segment](index=20&type=section&id=15.%20Reportable%20Segment) The company operates as one operating and reportable segment, deriving revenue from retail sales of food and beverages by company-owned restaurants in the United States, with the CEO serving as the chief operating decision maker - The Company operates as one operating segment and one reportable segment, with revenue from retail sales of food and beverages by company-owned restaurants in the United States[89](index=89&type=chunk) General and Administrative Expenses (in thousands) | General and Administrative (in thousands) | Thirteen weeks ended March 30, 2025 | Thirteen weeks ended March 31, 2024 | | :---------------------------------------- | :---------------------------------- | :---------------------------------- | | Operating support center cost | $27,706 | $26,992 | | Stock-based compensation | $10,221 | $9,626 | | Other expenses | $410 | $247 | | Total General and administrative | $38,337 | $36,865 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of Sweetgreen's financial performance, key factors affecting its business, and a detailed analysis of its results of operations, liquidity, and capital resources for the thirteen weeks ended March 30, 2025 [Overview](index=22&type=section&id=Overview) Sweetgreen is a mission-driven restaurant and lifestyle brand focused on healthy food at scale, aiming to be as ubiquitous as traditional fast food, operating 251 restaurants across 22 states and Washington, D.C. as of March 30, 2025 - Sweetgreen is a mission-driven restaurant and lifestyle brand focused on healthy food at scale, aiming to be as ubiquitous as traditional fast food[96](index=96&type=chunk) - As of March 30, 2025, the company operated **251 restaurants** across 22 states and Washington, D.C.[96](index=96&type=chunk) [Factors Affecting Our Business](index=22&type=section&id=Factors%20Affecting%20Our%20Business) The company plans to open at least 40 new restaurants and add at least 20 new Infinite Kitchen units in fiscal year 2025, while facing potential impacts from tariffs on supply chain costs and increased development costs - The company plans to open at least **40 new restaurants** and add at least **20 new Infinite Kitchen units** in fiscal year 2025[98](index=98&type=chunk) - Tariffs implemented in April 2025 are projected to impact Q2 food, beverage, and packaging supply chain costs by approximately **75 basis points**, declining to **40 basis points** in H2 2025 as packaging production transitions to alternative geographies[104](index=104&type=chunk) - New restaurant development costs may increase by up to **10%** on the average unit cost of **$1.4-$1.5 million**, and Infinite Kitchen unit costs (typically **$450 thousand-$550 thousand**) may increase by **15%** due to tariffs, though **10 units** are already tariff-insulated[105](index=105&type=chunk) - Revenue is historically lower in Q1 and Q4 due to holidays and inclement weather, but recent consumer behavior shifts (hybrid/remote work) have made seasonality less predictable[108](index=108&type=chunk) - A shift in sales towards Native Delivery, Outpost and Catering, and Marketplace channels could negatively impact margins due to third-party fees and higher refund rates, though margins are expected to improve with scale[109](index=109&type=chunk) [Key Performance Metrics and Non-GAAP Financial Measures](index=24&type=section&id=Key%20Performance%20Metrics%20and%20Non-GAAP%20Financial%20Measures) Same-Store Sales Change decreased significantly to (3.1)% in Q1 2025 from 5.0% in Q1 2024, reflecting a 6.5% decrease in traffic and product mix, partially offset by a 3.4% benefit from menu price increases Key Performance Metrics | Metric | Thirteen weeks ended March 30, 2025 | Thirteen weeks ended March 31, 2024 | | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Net New Restaurant Openings | 5 | 6 | | Average Unit Volume (as adjusted) | $2,907 | $2,889 | | Same-Store Sales Change (%) (as adjusted) | (3.1)% | 5.0 % | | Total Digital Revenue Percentage | 59.9 % | 58.9 % | | Owned Digital Revenue Percentage | 31.9 % | 32.8 % | - Same-Store Sales Change decreased significantly to **(3.1)%** in Q1 2025 from **5.0%** in Q1 2024, reflecting a **6.5%** decrease in traffic and product mix, partially offset by a **3.4%** benefit from menu price increases[149](index=149&type=chunk) - Total Digital Revenue Percentage increased to **59.9%** in Q1 2025, while Owned Digital Revenue Percentage slightly decreased to **31.9%**; the company anticipates an increase in Owned Digital sales with the introduction of a new loyalty program in Q2 2025[112](index=112&type=chunk)[117](index=117&type=chunk) Non-GAAP Financial Measures (in thousands) | Non-GAAP Metric (in thousands) | Thirteen weeks ended March 30, 2025 | Thirteen weeks ended March 31, 2024 | | :----------------------------- | :---------------------------------- | :---------------------------------- | | Restaurant-Level Profit | $29,687 | $28,537 | | Restaurant-Level Profit Margin | 17.9 % | 18.1 % | | Adjusted EBITDA | $285 | $113 | | Adjusted EBITDA Margin | 0.2 % | 0.1 % | - Restaurant-Level Profit increased by **$1.15 million**, but Restaurant-Level Profit Margin slightly decreased by **0.2 percentage points**[123](index=123&type=chunk) - Adjusted EBITDA increased by **$0.17 million**, and Adjusted EBITDA Margin improved by **0.1 percentage points**[130](index=130&type=chunk) [Components of Results of Operations](index=27&type=section&id=Components%20of%20Results%20of%20Operations) Revenue growth is driven by opening additional restaurants, diversifying the menu, and investing in marketing initiatives, including a new loyalty program, while costs are influenced by customer orders, new restaurant openings, commodity prices, and labor market dynamics - Revenue growth is driven by opening additional restaurants, diversifying the menu, and investing in marketing initiatives, including a new loyalty program[129](index=129&type=chunk) - Food, beverage, and packaging costs are expected to increase with customer orders and new restaurant openings, but as a percentage of revenue, they may vary due to menu mix, commodity costs, and inflation[133](index=133&type=chunk) - Labor and related expenses are influenced by minimum wage legislation, inflation, labor market strength, and benefit costs[134](index=134&type=chunk) - Other restaurant operating costs, including third-party delivery fees, are expected to increase in absolute dollars but may decline as a percentage of revenue for certain fixed costs like repairs and maintenance[136](index=136&type=chunk)[137](index=137&type=chunk) - Pre-opening costs are expected to increase in fiscal year 2025 due to the acceleration of new restaurant growth[140](index=140&type=chunk) - Restructuring charges include costs related to vacating former office spaces (Sweetgreen Support Center and New York office) and workforce reductions[143](index=143&type=chunk) - Other expense (income) primarily reflects changes in the fair value of the contingent consideration liability from the Spyce acquisition[145](index=145&type=chunk) [Results of Operations Comparison (Thirteen weeks ended March 30, 2025 vs. March 31, 2024)](index=31&type=section&id=Results%20of%20Operations%20Comparison) Revenue increased by 5.4% to $166.3 million, primarily due to new restaurant openings, while net loss improved by 3.9% to $(25.04) million, despite increased operating costs and restructuring charges Results of Operations (in thousands) | Metric (in thousands) | March 30, 2025 | March 31, 2024 | Dollar Change | Percentage Change | | :-------------------- | :------------- | :------------- | :------------ | :---------------- | | Revenue | $166,304 | $157,850 | $8,454 | 5.4 % | | Food, beverage, and packaging | $43,992 | $43,718 | $274 | 0.6 % | | Labor and related expenses | $48,071 | $45,766 | $2,305 | 5.0 % | | Occupancy and related expenses | $15,674 | $14,448 | $1,226 | 8.5 % | | Other restaurant operating costs | $28,880 | $25,381 | $3,499 | 13.8 % | | General and administrative | $38,337 | $36,865 | $1,472 | 4.0 % | | Depreciation and amortization | $17,106 | $16,427 | $679 | 4.1 % | | Pre-opening costs | $1,696 | $1,432 | $264 | 18.4 % | | Impairment and closure costs | $94 | $157 | $(63) | (40.1 %) | | Restructuring charges | $905 | $505 | $400 | 79.2 % | | Interest income | $(1,903) | $(3,016) | $1,113 | (36.9 %) | | Other expense (income) | $(1,685) | $2,059 | $(3,744) | (181.8 %) | | Net loss | $(25,039) | $(26,067) | $1,028 | (3.9 %) | - Revenue increase was primarily due to **$13.7 million** from **30 Net New Restaurant Openings**, partially offset by a **$4.9 million** decrease in Comparable Restaurant Base revenue[149](index=149&type=chunk) - Food, beverage, and packaging costs as a percentage of revenue decreased to **26.5%** from **27.7%** due to ingredient management and menu price increases[150](index=150&type=chunk)[151](index=151&type=chunk) - Other restaurant operating costs increased significantly by **13.8%**, primarily due to new restaurant openings, increased advertising, utilities, delivery fees (Marketplace Channel), and credit card processing fees[156](index=156&type=chunk)[157](index=157&type=chunk) - Restructuring charges increased by **79.2%** due to vacating the former New York office space, including severance and related benefits[165](index=165&type=chunk) - Other expense (income) shifted from an expense of **$2.06 million** to an income of **$1.69 million**, primarily due to a change in the fair value of contingent consideration[170](index=170&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 30, 2025, cash and cash equivalents were $183.9 million, and the company believes existing liquidity will be sufficient to fund operating lease obligations, capital expenditures, and working capital needs for at least the next 12 months - As of March 30, 2025, cash and cash equivalents were **$183.9 million**, down from **$214.8 million** at December 29, 2024[173](index=173&type=chunk) - The company believes existing cash and cash equivalents will be sufficient to fund operating lease obligations, capital expenditures, and working capital needs for at least the next 12 months[173](index=173&type=chunk) - Primary liquidity and capital requirements are for new restaurant development (including Infinite Kitchen deployment), customer experience improvements, marketing, working capital, and general corporate needs[174](index=174&type=chunk) - Capital expenditures for the thirteen weeks ended March 30, 2025, were approximately **$16.7 million**, expected to increase in 2025 for new store openings and Infinite Kitchens[178](index=178&type=chunk) - The prior Credit Facility with EagleBank expired on December 13, 2024, and was not renewed, leaving the company with no outstanding debt[179](index=179&type=chunk) - Net cash used in operating activities increased by **$16.6 million**, primarily due to a decrease in income (excluding non-cash items) and unfavorable working capital fluctuations[182](index=182&type=chunk) [Critical Accounting Estimates](index=37&type=section&id=Critical%20Accounting%20Estimates) No material changes to critical accounting estimates were reported compared to the Annual Report on Form 10-K for the fiscal year ended December 29, 2024 - No material changes to critical accounting estimates were reported compared to the Annual Report on Form 10-K for the fiscal year ended December 29, 2024[187](index=187&type=chunk) [Recent Accounting Pronouncements](index=37&type=section&id=Recent%20Accounting%20Pronouncements) Refer to Note 1 of the condensed consolidated financial statements for information on recently adopted and not yet adopted accounting pronouncements - Refer to Note 1 of the condensed consolidated financial statements for information on recently adopted and not yet adopted accounting pronouncements[189](index=189&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market) Sweetgreen is exposed to market risks including commodity price risks, interest rate risk, effects of inflation, and macroeconomic risks, with no material changes reported since the previous Annual Report on Form 10-K - Primary market risks include commodity price risks, interest rate risk, effects of inflation, and macroeconomic risks[190](index=190&type=chunk) - No material changes to market risk exposure were reported since the Annual Report on Form 10-K for the fiscal year ended December 29, 2024[190](index=190&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 30, 2025, with no material changes to internal control over financial reporting during the fiscal quarter - Disclosure controls and procedures were evaluated and deemed effective as of March 30, 2025[191](index=191&type=chunk) - No material changes to internal control over financial reporting occurred during the fiscal quarter ended March 30, 2025[193](index=193&type=chunk) [Part II Other Information](index=38&type=section&id=Part%20II%20Other%20Information) [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Sweetgreen is involved in various claims, lawsuits, governmental investigations, and administrative proceedings in the ordinary course of business, but does not anticipate these matters will have a material effect on its financial position or results of operations - The Company is subject to various claims, lawsuits, governmental investigations, and administrative proceedings in the ordinary course of business[194](index=194&type=chunk) - Management does not believe the ultimate resolution of these matters will have a material effect on the Company's financial position, results of operations, liquidity, or capital resources[194](index=194&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) For a comprehensive description of risks and uncertainties impacting the business, including those related to macroeconomic conditions, consumer spending, U.S. international trade policies (tariffs), and increased costs of ingredients and equipment, refer to Part I, Item 1A of the company's Annual Report on Form 10-K for the fiscal year ended December 29, 2024 - Refer to Part I, Item 1A. 'Risk Factors' in the Annual Report on Form 10-K for the fiscal year ended December 29, 2024, for a description of risks and uncertainties[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report during the period - None to report[196](index=196&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report during the period - None to report[197](index=197&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[198](index=198&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) During the fiscal quarter ended March 30, 2025, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended March 30, 2025[199](index=199&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, employment agreements, certifications, and XBRL interactive data files - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, Separation and Executive Employment Agreements, Certifications (31.1, 31.2, 32.1), and XBRL Instance Document and Taxonomy Extensions[200](index=200&type=chunk)[201](index=201&type=chunk) [Signatures](index=40&type=section&id=Signatures) [Report Signatures](index=40&type=section&id=Report%20Signatures) The report was duly signed on behalf of SWEETGREEN, INC. by Mitch Reback, Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer, and Duly Authorized Signatory) on May 8, 2025 - The report was signed by Mitch Reback, Chief Financial Officer, on May 8, 2025[206](index=206&type=chunk)

Core Viewpoint - Analysts project that Sweetgreen, Inc. (SG) will report a quarterly loss of $0.21 per share, marking an 8.7% increase year over year, with revenues expected to reach $164.61 million, a 4.3% increase from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate has been revised 2.6% lower over the last 30 days, indicating a collective reevaluation by analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are strongly linked to short-term stock price performance [3]. Key Metrics Analysis - Analysts estimate 'Same-store sales' to be -3.9%, a significant decline from the previous year's figure of 5% [5]. - The consensus estimate for 'Ending restaurants' is 251, up from 227 a year ago [5]. - The average prediction for 'New Restaurant Openings' is 5, compared to 6 in the same quarter of the previous year [5]. Market Performance - Sweetgreen shares have changed by -0.2% in the past month, contrasting with a +0.4% move of the Zacks S&P 500 composite [6]. - With a Zacks Rank 3 (Hold), SG is expected to reflect overall market performance in the near future [6].

Core Insights - Sweetgreen's initial public offering (IPO) in November 2021 was poorly received, with shares losing 80% of their value by November 2023, but the stock has rebounded with a 70% increase since the start of 2024 [1] - In 2025, Sweetgreen's stock dropped by 40%, contrasting with a 6% decline in the S&P 500, raising questions about its investment appeal [2] - Sweetgreen is focusing on major expansion, having opened 25 new stores in fiscal 2024, bringing its total to 245 locations, with plans to open at least 40 more in the current fiscal year [2] Digital and Technological Advancements - The company is positioning itself as a tech-forward restaurant, with 56% of its revenue in fiscal 2024 coming from digital channels, and 30% from its own website and app [3] - Sweetgreen is investing in automation through its Infinite Kitchen technology, which uses robots for food preparation, aiming to implement this in 20 new stores this year [4] Menu Innovation and Consumer Trends - Sweetgreen is actively innovating its menu, recently introducing Ripple Fries, and aims to increase the pace of menu innovation [5] - The growing consumer interest in wellness, with 82% of U.S. consumers prioritizing health, provides a favorable growth environment for Sweetgreen [2] Financial Performance and Market Challenges - Sweetgreen has not yet achieved GAAP profitability, reporting a net loss of $90 million in fiscal 2024, indicating challenges in scaling the business [8] - The average meal cost at Sweetgreen is higher than competitors like Chipotle, which may limit its total addressable market, and same-store sales are expected to rise only 1% to 3% this year, reflecting economic sensitivity [7]