Sweetgreen(US:SG)2024-05-10 03:35Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $157.9 million, representing a 26% year-over-year growth from $125.1 million in Q1 2023 [90] - Same-store sales grew 5% year-over-year, with a 5% benefit from menu prices and flat traffic mix [60] - Restaurant-level profit for Q1 was $28.5 million, a nearly 70% increase from a year ago, with a restaurant-level margin of 18.1%, expanding over 400 basis points year-over-year [41][62] - Adjusted EBITDA for Q1 was $113,000, an improvement of $6.8 million from Q1 2023 [111] Business Line Data and Key Metrics Changes - The two Infinite Kitchens are tracking to an average unit volume of $2.6 million, with an average first-quarter margin of 28%, 10 points above the fleet average [50][19] - New restaurant openings in Q1 outpaced the existing fleet average in terms of weekly revenue [79] - Food, beverage, and packaging costs were 28% of revenue for the quarter, an 80 basis point improvement year-over-year [94] Market Data and Key Metrics Changes - The Southeast markets collectively grew double-digits as they continue to accelerate their ramp [92] - Digital sales represented 59% of total first-quarter revenue, with 56% of those sales coming via the company's own digital channels [78] Company Strategy and Development Direction - The company plans to open approximately seven new Infinite Kitchen restaurants and retrofit three to four large urban restaurants in 2024 [51] - The strategy includes a focus on menu innovation, with the recent launch of the Caramelized Garlic Steak aimed at broadening the customer base [53][58] - The company aims to return to a growth rate of 15% to 20% new unit growth per year starting in 2025 [52] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter started off slow due to weather but improved significantly by March, averaging about 5% growth [3][4] - The company is optimistic about the second quarter, tracking ahead of guidance and expecting positive results from the state launch and media efforts [4] - Management emphasized the importance of guest experience and operational efficiency as key drivers for future growth [88][97] Other Important Information - The company has seen a 19-point decrease in turnover compared to Q1 2023, stabilizing at the lowest level since before COVID [87] - The company is focused on capturing urban lunchtime demand and improving labor scheduling to enhance customer service [88] Q&A Session Summary Question: Insights on consumer demand and traffic trends - Management acknowledged a slow start in January but noted a significant improvement in traffic by March, with overall positive momentum in the second quarter [2][4] Question: Performance of Infinite Kitchens - Management reported strong performance metrics for Infinite Kitchens, with higher average checks and improved operating model benefits [81][50] Question: Labor pressure and wage increases - Management indicated minimal labor pressure in Q1, with a slight increase in wages due to California's minimum wage law, offset by a price increase [14][15] Question: Future growth and market expansion - Management expressed confidence in the growth potential of new markets and the effectiveness of their adjusted real estate targeting and marketing strategies [71][72]