Sweetgreen Q2 revenue misses estimates, net loss widens on impairment costs

Overview

• Sweetgreen fiscal Q2 revenue rises 0.5% yr/yr, missing analyst expectations, per LSEG data

• Adjusted EBITDA for fiscal Q2 misses consensus, reflecting operational challenges

• Net loss widened due to increased impairment and closure costs

Outlook

• Sweetgreen expects FY 2025 revenue between $700 mln and $715 mln

• Company anticipates Same-Store Sales Change of -6% to -4% for FY 2025

• Sweetgreen plans at least 40 Net New Restaurant Openings in FY 2025

• Company forecasts FY 2025 Adjusted EBITDA between $10 mln and $15 mln

Result Drivers

• REVENUE DRIVERS - Revenue increase driven by new restaurant openings, offset by decline in comparable restaurant sales

• SAME-STORE SALES - Negative 7.6% change due to 10.1% decrease in traffic and product mix, partially offset by price increases

• COST PRESSURES - Increased restaurant-level advertising spend and impairment costs impacted operational margins

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy"

• Wall Street's median 12-month price target for Sweetgreen Inc is $19.00, about 35.2% above its August 6 closing price of $12.32

Press Release: ID:nBw1Ff6yVa