Shares of Sweetgreen (SG 28.41%) popped Friday morning after the fast-casual salad specialist posted strong results in its fourth-quarter report.
The company beat revenue estimates, made progress on the bottom line, and offered first-quarter guidance that was better than the analysts’ consensus view. As of noon ET, the stock was up 30.3%.
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Sweetgreen stock gets more appetizing
In Q4, Sweetgreen’s revenue jumped 29% to $153 million. That growth was primarily driven by new restaurant openings, as same-store sales rose 6%. The company also reported another quarter with average unit volumes of $2.9 million, a figure that’s among the best in the fast-food industry, and evidence of strong demand for its offerings.
Restaurant-level profit margin, a key industry metric, improved from 11% to 16%, and Sweetgreen’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss narrowed from $17.9 million to $1.8 million.
On the bottom line, Sweetgreen’s adjusted loss narrowed from $0.44 per share to $0.24 per share — slightly worse than analysts’ consensus expectations of $0.22 per share.
“2023 was a strong year for Sweetgreen — we continued to demonstrate high growth, substantial operating leverage and executed on significant innovation across the business,” said CEO Jonathan Neman in the earnings press release. “In the fourth quarter, we expanded restaurant-level profit margins by 500 basis points in 2023 compared to 2022, and our guidance calls for Adjusted EBITDA profitability in 2024.”
What’s next for Sweetgreen
Investors also seem pleased with Sweetgreen’s guidance. For the first quarter, management expects revenue of $150 million to $154 million, ahead of the consensus expectation of $147.3 million. For the full year, it’s guiding for revenue of $655 million to $670 million, which matched analysts’ expectations, and would amount to growth of 12% to 15%.
Sweetgreen expects to slow its pace of new restaurant openings, adding 23 to 27 this year to the 220 it currently operates, though it continues to invest in its robotic salad assembly technology, which it has dubbed Infinite Kitchen.
After another quarter of strong revenue growth and improving margins, it’s not surprising that the stock is moving higher Friday.
