Sweetgreen Inc (SG) Reports 24% Revenue Growth in Q3 2023
Q3 2023 total revenue increased by 24% to $153.4 million compared to Q3 2022
Restaurant-Level Profit Margin increased to 19% from 16% in the prior year period
Net loss reduced to $(25.1) million from $(51.0) million in Q3 2022
Adjusted EBITDA improved to $2.5 million from $(7.2) million in the prior year period
On November 2, 2023, Sweetgreen Inc (NYSE:SG) released its financial results for the third fiscal quarter ended September 24, 2023. The company reported a 24% increase in total revenue, reaching $153.4 million, up from $124.0 million in the same period last year. This growth was primarily driven by an increase in incremental revenue associated with 54 Net New Restaurant Openings and a 4% Same-Store Sales Change.
Financial Highlights
The company reported a loss from operations of $(26.5) million, a significant improvement from the $(52.9) million loss in Q3 2022. The loss from operations margin was (17)%, compared to (43)% in the prior year period. Despite the net loss of $(25.1) million, this figure also showed a marked improvement from the $(51.0) million net loss in Q3 2022.
Restaurant-Level Profit was $29.1 million, up from $19.9 million in Q3 2022, and the Restaurant-Level Profit Margin increased to 19% from 16% in the prior year period. The company also reported 15 Net New Restaurant Openings, compared to 10 in Q3 2022.
CEO Commentary
We delivered another solid quarter that included 20%+ revenue growth, 300 basis points of restaurant level margin expansion from the prior year period, and positive Adjusted EBITDA," said Jonathan Neman, Co-Founder and Chief Executive Officer. "We are pleased with our results and remain focused on driving long-term, profitable growth so that we can capture a massive market opportunity. I could not be more excited about the future of Sweetgreen and the progress we are making to redefine fast food."
Outlook for Fiscal Year 2023
Based on the Q3 results, Sweetgreen Inc (NYSE:SG) anticipates finishing 2023 with 35 Net New Restaurant openings, revenue ranging from $575 million to $585 million, Same-Store Sales Change between 3% and 5%, Restaurant-Level Profit Margin between 16.5% and 17.5%, and an Adjusted EBITDA between $(8) million and $(3) million.
Financial Tables
The company's financial tables show a consistent trend of improvement in key metrics. The net loss per share for Q3 2023 was $(0.22), compared to $(0.46) in Q3 2022. The company's total digital revenue percentage was 58%, slightly down from 60% in the prior year period. The owned digital revenue percentage was 37%, compared to 40% in Q3 2022.
Despite the challenges, Sweetgreen Inc (NYSE:SG) has shown promising signs of recovery and growth. The company's focus on driving long-term, profitable growth and its commitment to redefining fast food are reflected in its Q3 2023 financial results.
Explore the complete 8-K earnings release (here) from Sweetgreen Inc for further details.
This article first appeared on GuruFocus.
