Earnings

Sweetgreen (SG) Q2 2022 earnings meet estimates

A employee wears a Sweetgreen Inc. hat whereas making ready meals inside the corporate’s restaurant in Boston, Massachusetts.

Adam Glanzman | Bloomberg | Getty Photographs

Shares of Sweetgreen fell after the salad chain lowered its 2022 forecast.

The restaurant firm additionally mentioned it laid off 5% of its help heart workforce and can downsize to a smaller workplace constructing to decrease its working bills.

Shares within the firm fell greater than 20% in after-hours buying and selling following the earnings report Tuesday. On Wednesday morning, the inventory was down about 4% amid a broader market rally.

As of Tuesday’s shut, Sweetgreen’s inventory has fallen about 47% this yr to $16.85. It reached a excessive of $56.20 shortly after its IPO in November.

This is what the corporate reported in contrast with what Wall Road was anticipating, based mostly on a survey of analysts by Refinitiv:

  • Loss per share: 36 cents, consistent with estimates
  • Income: $124.9 million vs. $130.2 million anticipated

Sweetgreen gross sales softened round Memorial Day, main the corporate to revise its forecast decrease, CFO Mitch Reback mentioned in a press release.

On the corporate’s convention name, executives attributed the slowdown to a lot of components, together with “unprecedented ranges of summer time journey,” a sluggish return to the workplace and one other wave of recent Covid-19 circumstances.

Within the quarter, ended June 26, Sweetgreen’s internet gross sales rose 45% to $124.9 million. Its same-store gross sales climbed 16%, boosted by 6% menu worth hikes.

For the yr, Sweetgreen now expects annual income of $480 million to $500 million, down from its prior forecast of $515 million to $535 million. The chain additionally revised its outlook for same-store gross sales, predicting development of 13% to 19%, down from the earlier projection of 20% to 26%.

“We expect that it is a conservative estimate, however trying again, we have simply been incorrect on so many of those calls,” Reback mentioned on the decision.

Furthermore, Sweetgreen additionally modified its outlook for adjusted loss earlier than curiosity, taxes, depreciation and amortization to a spread of $45 million to $35 million, wider than its earlier vary of $40 million to $33 million.

However the chain defined the steps it is taking to attain profitability, together with layoffs and decreasing its actual property footprint by shifting to a smaller workplace. Severance packages and associated advantages are anticipated to price the corporate between $500,000 to $800,000, whereas the workplace transfer will price $8.4 million to $9.9 million. The fees are anticipated to influence its third-quarter outcomes.

Sweetgreen reported a second-quarter internet lack of $40 million, or 36 cents per share, wider than a internet lack of $26 million, or $1.55 per share, a yr earlier. The corporate blamed a rise in stock-based compensation for its rising losses.

Read the full earnings report here.

Correction: A earlier model of this story misstated Sweetgreen’s earlier forecast for its same-store gross sales development.



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Source: https://www.cnbc.com/2022/08/09/sweetgreen-stock-plummets-after-salad-chain-cuts-forecast-announces-layoffs.html

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