Stock Story -
Casual salad chain Sweetgreen (NYSE:SG) reported results ahead of analysts' expectations in Q2 CY2024, with revenue up 21.1% year on year to $184.6 million. The company expects the full year's revenue to be around $675 million, in line with analysts' estimates. It made a GAAP loss of $0.13 per share, improving from its loss of $0.24 per share in the same quarter last year.
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Sweetgreen (SG) Q2 CY2024 Highlights:
- Revenue: $184.6 million vs analyst estimates of $180.8 million (2.1% beat)
- EPS: -$0.13 vs analyst expectations of -$0.12 (6.2% miss)
- The company lifted its revenue guidance for the full year from $667.5 million to $675 million at the midpoint, a 1.1% increase
- EBITDA guidance for the full year is $17.5 million at the midpoint, above analyst estimates of $17.17 million
- Gross Margin (GAAP): 22.5%, up from 20.4% in the same quarter last year
- EBITDA Margin: 6.7%, up from 2.1% in the same quarter last year
- Same-Store Sales rose 9% year on year (3% in the same quarter last year)
- Market Capitalization: $2.93 billion
Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.
Modern Fast FoodModern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.
Sales GrowthSweetgreen is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.
As you can see below, the company's annualized revenue growth rate of 21.2% over the last five years was exceptional as it added more dining locations and increased sales at existing, established restaurants.
This quarter, Sweetgreen reported remarkable year-on-year revenue growth of 21.1%, and its $184.6 million in revenue topped Wall Street's estimates by 2.1%. Looking ahead, Wall Street expects sales to grow 12.1% over the next 12 months, a deceleration from this quarter.
Same-Store Sales Sweetgreen's demand within its existing restaurants has generally risen over the last two years but lagged behind the broader sector. On average, the company's same-store sales have grown by 5.3% year on year. With positive same-store sales growth amid an increasing number of restaurants, Sweetgreen is reaching more diners and growing sales.
In the latest quarter, Sweetgreen's same-store sales rose 9% year on year. This growth was an acceleration from the 3% year-on-year increase it posted 12 months ago, which is always an encouraging sign.
Key Takeaways from Sweetgreen's Q2 Results We enjoyed seeing Sweetgreen exceed analysts' revenue and gross margin expectations this quarter. We were also happy it raised its full-year revenue and EBITDA guidance, which outperformed Wall Street's estimates. Overall, this quarter had some key positives. The stock traded up 18.9% to $31.23 immediately after reporting.
