Key Takeaways
- Sweetgreen reported a wider-than-expected loss for the third quarter as costs rose.
- The company spent more as it expanded its locations, and also faced higher labor expenses.
- Shares tumbled Friday, though even with Friday’s drop, they’ve more than tripled in value since the start of the year.
Shares of Sweetgreen (SG) tumbled in Friday afternoon trading after the salad restaurant chain reported a wider-than-anticipated loss as costs rose.
Sweetgreen posted a third-quarter loss of 18 cents per share, while analysts surveyed by Visible Alpha were looking for a loss of 15 cents per share. Revenue was up 13% year-over-year to $173.4 million, though that was short of estimates as well.
The company said it faced “higher protein costs and higher staffing expenses associated with increases in prevailing wage rates in many of our markets.”
Sweetgreen also noted it spent more money on expanding the number of its locations by 5 to 31. In addition, general and administrative expenses were up $800,000 to $36.8 million, primarily because of the cost of supporting restaurant growth.
Co-Founder and CEO Jonathan Neman said the company believes its expanded menu, performance of restaurants open this year, and growth in emerging markets, among other things, will promote “reacceleration of our 2025 unit growth.”
Sweetgreen raised the lower end of its full-year sales outlook, now anticipating a range of $675 million to $680 million, compared to the previous $670 million to $680 million.
Shares of Sweetgreen dropped over 5% in Friday afternoon trading, though even with Friday’s loss, they’ve more than tripled in value since the start of the year.
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