Sweet Green rallies 25% as it sees a path to profitability with improved margins
1min read Sweetgreen Inc (SG) released its financial results for the fourth quarter and fiscal year ended December 31, 2023.
The company reported a 24% increase in total revenue for the fiscal year, amounting to $584.0 million. This growth can be attributed to the addition of 45 net new restaurant openings and a 6% increase in same-store sales.
Sweetgreen Inc experienced a reduction in net loss, improving from $(190.4) million in FY 2022 to $(113.4) million in FY 2023 . This significant improvement in financial health was also reflected in the net loss margin, which improved from (41)% to (19)% over the same period.
Additionally, adjusted EBITDA, a key metric for evaluating operational performance, showed notable improvement, going from $(49.9) million in FY 2022 to $(2.8) million in FY 2023.
The company's restaurant-level profit margin increased to 17% in FY 2023, up from 15% in FY 2022, indicating improved efficiency in restaurant operations. This improvement is attributed to menu price increases, labor optimization, and improvements in supply chain sourcing.
Looking ahead to fiscal year 2024, Sweetgreen Inc anticipates 23-27 net new restaurant openings, revenue ranging from $655 million to $670 million, and a same- store sales change between 3-5%. The company also expects adjusted EBITDA between $8 million to $15 million, signaling a move towards profitability.
CEO Jonathan Neman expressed optimism for the year ahead, citing a strong foundation, focus on menu innovation, and the Infinite Kitchen initiative to drive traffic and demand. However, the company still faces challenges in a competitive market and the need to effectively manage operational costs while maintaining growth momentum.
In summary, Sweetgreen Inc demonstrated strong financial performance in FY 2023, with significant increases in total revenue, improvements in net loss and adjusted EBITDA, and an increased restaurant-level profit margin. The company's plans for fiscal year 2024 show a continued focus on expansion, innovation, and achieving profitability. Investors and industry observers should closely monitor Sweetgreen Inc's ability to sustain growth, manage costs, and enhance profitability in the coming fiscal year.