Why Sweetgreen Shares Are Dipping Today

Sweetgreen, Inc. SG shares are trading lower by around 10% after the company reported Q2 2023 results.

Revenues rose 22% Y/Y to $152.5 million, missing the consensus of $156.7 million.

Revenues benefited from higher incremental revenue related to 47 Net New Restaurant Openings during or after Q2 2022 till the end of Q2 2023 and a Same-Store Sales increase of 3%.

Adjusted EBITDA came in at $3.3 million vs. adjusted EBITDA of $(7.8) million a year ago, aided by higher Restaurant-Level Profit and lower general and administrative expenses.

Adjusted EPS of $(0.20) missed the consensus of $(0.16).

"As we entered 2023, we doubled down on our commitment to durability – balancing high growth and profitability – and our second quarter performance put that commitment into action. In the second quarter, we recorded our ninth consecutive quarter of over 20% sales growth year over year. We delivered a restaurant level margin of over 20% as well as achieved Adjusted EBITDA profitability of $3.3 million. I could not be more optimistic about the future of Sweetgreen as we continue to execute on our mission and invest in profitable growth," said Jonathan Neman, Co-Founder and CEO. 

Outlook: The company reaffirmed the guidance for revenues at $575 million-$595 million (vs. consensus: $590.28 million) and Same-Store Sales growth at 2% and 6%.

SG raised the outlook for adjusted EBITDA to $(10) million-$(0) million from $(13) million-$(3) million and restaurant-level profit margin to 16%-18% (from 15%-17%).

Price Action: SG shares are down 11% to $13.75 premarket on the last check Friday.

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