Sweetgreen shares tumble after salad chain reports weak sales but narrowing losses

Sweetgreen connected Thursday reported quarterly income that fell abbreviated of Wall Street's expectations, but narrowing losses.

The institution besides raised its forecast for restaurant-level margins and said it could interruption adjacent connected its adjusted net earlier interest, taxes, depreciation and amortization this year. Sweetgreen, which went nationalist successful November 2021, is aiming to crook a nett for the archetypal clip by 2024.

Shares of the institution fell 9% successful extended trading. The banal closed Thursday down much than 5%.

Here's what the institution reported:

Loss per share: 24 cents (That's not comparable to an estimation of 16 cents, according to Refinitiv statement estimates.)Revenue: $152.5 cardinal vs. $156.7 cardinal expected by analysts polled by Refinitiv

The crockery concatenation reported a second-quarter nett nonaccomplishment of $27.3 million, oregon 24 cents per share, narrower than its nett nonaccomplishment of $40.5 million, oregon 37 cents per share, a twelvemonth earlier.

The institution reported an adjusted EBITDA of $3.3 million, swinging from a nonaccomplishment of $7.8 cardinal successful the year-ago period.

"We were capable to grow our borderline beauteous importantly astatine the restaurant-level margin, each portion doing it with little G&A," CEO Jonathan Neman told CNBC.

The chain's restaurant-level profits expanded to 20% from 19% successful the year-ago period.

Neman said that the company's improved restaurant-level margins were mostly owed to labour savings from little turnover and much businesslike store staffing. He besides said the institution has been spending little connected its ingredients.

"I deliberation our proviso concatenation procurement squad did an awesome occupation astir the outgo of our goods, maintaining the precocious prime we expect, but doing it successful a overmuch much disciplined way," Neman said.

Net sales rose 22% to $152.5 million, fueled by caller restaurants.

The company's same-store income grew 3% successful the quarter, bolstered by terms hikes.

For 2023, Sweetgreen present expects restaurant-level margins of 16% to 18%, up from its anterior scope of 15% to 17%. It besides expects adjusted EBITDA successful a scope of a $10 cardinal nonaccomplishment to breaking even. The institution antecedently said is adjusted EBITDA would beryllium a nonaccomplishment of $13 cardinal to $3 million.

The institution reiterated the remainder of its outlook, projecting gross of betwixt $575 cardinal and $595 cardinal and same-store income maturation of 2% to 6%.