SG - Earnings call transcript Q1 2022

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Operator

Good afternoon. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sweetgreen, Inc.

First Quarter 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After [Operator you. Instructions] Thank the like to now would conference to I turn over Ms. Rebecca Nounou. Please go ahead, ma’am.

Rebecca Nounou

good Thank and afternoon, you, everyone.

and today Co-Founder Here Jonathan Mitch CEO; me Reback, with CFO. are and Neman,

we begin, of a Before we have reminders. couple

website Our investor.sweetgreen.com. earnings at on release available is our

may we as results a various and materially this result nature. call, of forward-looking expressed uncertainties. be of will During from comments those making a Actual differ implied or risks

the the no information titled about update these company’s are filed subsequently some or forward-looking in Form SEC statements latest Risk our section as review obligations publicly assume These on XXXX, on XX-Q. revise our Form including more Factors of For XX-K on risks, filings quarterly of Report March information report based to forward-looking please statements. XX, and we Annual filing and

to Additionally, non-GAAP These reconciliation not financial financial GAAP. accordance kick GAAP we financial the to certain substitute IR afternoon’s our be release can it’s with measures press U.S. performance for be off. Jonathan measure found on will this and non-GAAP addition of With to to these pleasure over items in to available measures in call that, my a in measures. discussing prepared of turn things website. are nearest A the

Jonathan Neman

and every out farmers, the and win-win-win our supply producers us you, fresh, and teams a how and customers, who restaurant our thank moment stakeholders. for want a everyone. deliver good gratitude I afternoon, organic day. than of more distribution want I also continue communities Thank and Rebecca, for ingredients a sustainable XXX give to local to to start partners shout with with they to

amid allow that supply on chain meals supply and differentiated continued delicious, serve sheets. and sustainable to to chain local Our healthy long-term us global built partnerships is have

approach our to the and the sourcing communities business. growth planning, and our our key food and supporting core ethos and is to Our long-term health

of same-store approximately fueled XX%. quarter digital we $XXX.X growth first to strong growth, quarter, up to results. of total million our Average In $X.X report representing were reported sales via of QX and We by last channels. million, margins another of grew sales sales our year-over-year $X.X are pleased quarter. unit million, improved. XX% year two-thirds sales XX% for the with coming from volumes represented own Total XX% Restaurant-level of those a revenue the digital profitability

Our an managing leading incredible operators did efficiently. teams and job through turbulence their restaurants COVID-driven our

vision on remains redefine team fast food. to our focused Our executing

Our and communities and allowing add healthier customers new four strategic and restaurant to and four, food; employer digital in without experience connect their include: our volumes; two, live focus new markets customer values; industry make digital the objectives on to additional own compromising with evolve of channels, expand achieve our to drive us to our Sweetgreen a the relationships, our inspire member three, leader five-star one, existing footprint as create more vision to real team choice. brand frequency and solidify lives experiences enhance

and existing food. healthy in have sustainable Expanding in the quarter, to we and QX, a and year: pace and new In of provides new objectives, national in meet for years. robust response and with to Tampa, reach Midwest restaurants our particularly and We to Indianapolis, We new the open Minneapolis. eight opportunity a least Positive few to our strong for on and bring markets in next this with us opened openings, provide these suburban me of brand. market our update new brief a each starting Let power fast Sweetgreen additional the the excited Diego, four demand both at residential pipeline on remain this markets XX Detroit to restaurants. we had demonstrates footprint. customer a market opening growing our San presence are new the year

our on we testing we access, customers. This we for our that exclusively ease Sweetgreen our website and of opening placed new digital area leadership Mount in be first lead the reach direct third-party to kitchen into to and increase have are the to Washington, satisfaction. and Sweetgreen new customers we innovate August, app, restaurant will share or formats D.C. digital continue orders servicing Vernon connection we two platforms. As formats expand, via pickup I’m ahead excited

a With opportunity this no to already dining, hyper two-thirds for format to square sales store patio delivery outdoor for this pickup convenience use inside coming our channels, dining our to an ordering customers. digital our offering from have digital have we of and room. than footage smaller location create still due While will frontline typical unique or the

Additionally, the channels. next lane we opening the restaurant sweetlane, in digital first through place pickup Schaumburg, year, customers To utilize sweetlane, feature our will an Illinois. drive-through exclusively orders in the within advance our be in order-ahead, will

team’s will to our we Both convenient customers formats how a additional convenience the less for sweetlanes to us. wherever continue some diverse experience share be digital of can a we are customers. meets new we a are. digital Sweetgreen we and our they our results that Investing with unlock the our expand from focus to on approach digital for work. of platform relationships I’ll residential commitment expansion, these our key group suburban seeing own believe As multichannel friction highlights in of the continues with pillar reflect

this delivery to provides to now faster, ordering growth. better of while delivery We’ve more value. all channel channel early our times seen marketplace is have a free expanded have via as Native more are those the the cost Our XX% profitable. to in native third-party as We’ve a far We to our user XX marketed a growing revenue was delivery improved per Sweetgreen’s availability promising. make and channel outpacing QX the superior lift and improving delivered. best from per who experience, menu delivery XX% were way experience promotion. we miles. reliable this results and are a average delivery quarter, app customers to Ordering broader delivery delivery fastest deemed Sweetgreen It done in by

Our outflow end outflows, the channel added ending QX, XXX. of also the to XX we recover. quarter Since with continues

of gives rewards and In features and purchases to program about January, we where we new why $XX, digital craveable for excited be real XXXX. food. values. another develop loyalty the exclusive the A to plan total Sweetgreen for huge own target in $X with a survey to we XX% who highly passes This Omicron preferences would opportunity and We testing the to purchasing wanted during XXXX, sold and in and XX-day frequency. during their than frequency pass response, credit placed tripling We pass pass the frequency of almost customers made learn Despite most XX XX% day frequency the the QX monthly purchasers. and exceeded spend. trial, the their how importantly, doubling per customer wheel subscription outflows various presents cohort strength Sweetpass, our loyalty to program connect to drive opportunity new to healthy Sweetpass throughout digital businesses who and expand given were customers. piloted indicated on menu particularly of limited engaged continue more frameworks with our time their the again. additional up We interest supply users of and an days. low three-week period. is to surge, their delighted channels, of access one We and lapse and habitual customers up XX,XXX our our more that align average to offerings resonated that a influence to earned personalized product average their five are from Compared orders purchase our

that more continuing they of program did combine included. reimagined We loyalty the frequency prior retained designed purchasers personalized have and after the program. customers will to new than to than when with a to effect bought believe Sweetpass engage multiplier both our it half healthy with they results you subscription our these from We’re even continue features every lapsed positive and promotional see program menu more who a pilot has to and even the day. We’ve Sweetpass force be capabilities low brand that a

celebrating brand and a Booker campaign are awareness, Devin Sweetgreen in As our and excited via Shooting a versatility healthier our we and to guard to experience partner customization digital I highlight Naomi moment customer, brand as launched want Suns latest recently build we Sweetgreen Phoenix inspiring our Osaka, future. our channels. menu with continue welcome to spend Together seamless

your campaign, and your inspired create is bowl at Our create theirs. flavor, or have orders over it. exactly orders XX the our To our seasonal menu ingredients, unique Chimichurri. Today, you most millions dietary menu into or fresh XX% part how create almost app herby modification. like do of any Devin to our own prepared item brand Customers can as dressing, just can make XXXX, be and customized preference and bowl create of accommodate try profile over and including to features like or Naomi item go and menu own newest one popular least cooked your own their they of freshly

team We also our Devin Sweetgreen are feature in proud alongside to members brand campaign. this Naomi and

will custom you their find orders next the Over delicious able TikTok. to be weeks, on several

Our foundation the our team of members and ambassadors brand are our best success.

at to of and the that to path be the journey, many, part beginning job proud we’re For career a Sweetgreen of is opportunity.

head more opportunities and for new started team Our hourly few coach years. to about as restaurant growing a as as Today, our of one-third means our pace members. three become team openings leadership store of members

all in One and six-figure sure are rewards leaders total, our an o beyond broadening invest tomorrow. team owner, to inclusion is an other in retain important development are and to our coaches program diversity, that proud competitive us and that It’s to for equity in head continuing head and and and training our We for investing earn communication best equity in experience of across we Sweetgreen attract growth the go of offering like and build ways: act Sweetgreen’s rewarded the and wages Sweetgreen to inclusive have and coaches to cultivating trust recognition; a culture our and company, talent, values two-way success. pipeline internal make expanding benefits. package. our at representation we we’re important on an advance built members’ restaurant of

to a robust stay is retention. members almost member once We a XX-day retention is online that our training of it program training great team get has in-restaurant experience, immersive by by end tools. predictor the know We great XX Since have QX, that creating improved of interactive onboarding days we team complemented long-term a XX%.

While has laser we on Sweetgreen short-term great a for done that are sustainable position growth. long-term our making focused challenges, job team navigating decisions

footprint reach X,XXX our by white the to is positioned tremendous end We’re expand of fill the and space. our decade. U.S. goal continuing strongly Sweetgreen’s across to Sweetgreen believe of We restaurants the

Thank team. executing whole best-in-class again and culture unique your for to real team connecting by our by focus the mission you against on communities supported of is this our people of food. All Sweetgreen healthier building to

it review hand to over results. financial I’ll our QX Now Mitch to

Mitch Reback

This price good some to grew with which million afternoon, increases the Thank was up quarter of by and Omicron, limited increase first the of impact XX%, the in you, from staffing growth from results. everyone. felt line $X.X year-over-year. and I’m saw in sales quarter impact taken cases, $XX.X transactions average most growth Jonathan, first including million, Even a leading beginning Omicron. lower quarter, $X.X a was same-store XXXX, XX% primarily our during many our XXXX reduced reduced capacity. significant pleased businesses, mix of in volume XX%, areas, of of and from of hours in impact X% Like XX% first and to XXXX. $XXX.X million, from quarter reached unit we of revenue in the growing the across was X% first a and approximately in with operating driven million January QX up Total the in The consisting quarter temporarily of and demand, benefit XXXX.

with or owned website pre-pandemic total transactions AUVs our total QX the new that of Diego, We now quarter, exceed in on this digital restaurants up strong QX of is and revenue XXXX eight in Our dollars was XX% our Sweetgreen revenue. XX% one a XX% of $X.X revenue of opened level the made first revenue QX We San was from opening digital app million. Digital very one XXXX. opened in new grew Carlsbad. quarter year-over-year. market,

least We new this and both on at year restaurants are additional to open new XX markets. track in now existing an

the our first Restaurant of of factors improvement the of and in new performance rebounding labor, all our of in with in an recovered impact margins pleased our price leverage, reduction confidence line. be XXXX. to continue costs. These and our from residential We largely openings, quarter us Omicron. Restaurant-level the beverage, and margins major focused impact our throughout other quarter food suburban to and result the residential X% was discount development The suburban were of improved volumes as giving pipeline. items, line the increases from and margin across the sales improvement led XX%, occupancy

margin XX% of points a beverage comparable improvement of For refer earnings figures, were release. restaurant-level to to reconciliation basis of please Food, costs XXX in and packaging an the XXXX. revenue, GAAP

cost We inflationary throughout of and expect to the XXXX. pressures increase remainder

and XXXX. continue simplification and will with improvement XX% related be margin believe of from packaging improvement our This from as Labor resulted of that in of sales, revenue, We to XXXXX. an percent beverage greater of line model. operating costs XXX XXXX a costs for leverage points our and food, basis sales were

$XX increased rate wage the we an average under hour. quarter, the X% just to During

concluded pleased to are and still in XX% team first the we who bonus Additionally, retention of receive I’m quarter January, with say members our program bonus us.

a in By saw member staffed. applicant also steady flow. the improvement team XX% of stores first our We quarter, were the end

costs of is XXX volumes. leverage of Occupancy XXXX. with expect related XX% higher revenue, points from of improvement labor-related be improvement in and as line sales were basis a revenue of XXXX. an from We to expenses This the result percent

$X.X the expense, in spice-related million in $XX stock-based $XX.X million increase This to public attributable a and million of Our for expenses. costs increase $XX.X primarily to G&A company $XX.X general is administrative million million was million quarter QX in compensation and in $X.X expense compared XXXX.

move Excluding will and experience expenses increase meaningful these was we an excluding spice million to in XX% quarter company in XXXX. for revenue compared stock-based This continue public a $XX.X leverage G&A we the million increase of items, to was compensation, We $XX.X as G&A, compared to believe forward. XX%.

Adjusted in $XX increase million. quarter is higher the loss result in net was restaurant million the is of quarterly to was improved a narrowing $XX.X the to improvement $X.X loss level loss EBITDA by margins. This quarter XXXX. stock-based for attributable Our and million change primarily compared sales compensation. million the $XX a million, $XX.X of for year-over-year This

please comparable figures, refer of a EBITDA For adjusted our to reconciliation GAAP to earnings release.

and our guidance to Turning outlook.

between $XXX of and and are provided nor our $XX recently a same-store openings, fiscal ranging sales million, between neither least XX revenue restaurant-level of recovery We consistent. XX% new million XX%, reiterating $XX at guidance, linear XXXX has million loss restaurant year $XXX EBITDA growth million. to to from loss XX% to adjusted XX% margins a to of The path been

our We variability continue patterns. traffic see to in customer

product, are While to platform and profitability. the of United our us the end we gives of G&A, goal progress restaurants across to With States strength long-term. X,XXX path continue our restaurant-level building there the our focused short-term brand, the expanding profits by the decade. to our are environment, make approach operating disciplined on on steady for The in company challenges the digital team confidence of we reaching and in

With We to a and to I’ll on business. equipped keenly start call turn profitable that, the operator Q&A. are back the well growing focused

Operator

[Operator first to Instructions] sir. William Zackfia, you, We’ll Thank Sharon go Blair.

Sharon Zackfia

expect I first. afternoon. not good be Hi, did to

thank for usually as last. are So you these that

kind sound you companies confident of hearing permitting for XXXX. unit of your on. unusually so pipeline new and I a about delays lot mean talk So about we’re

in of of this to these expect costs kitchen compare the build you to embedded XXXX separately that us unit then new what out in at formats cost? So sweetlane where cushion new XX understand related, likely for locations. pickup And least how up And end of guidance help kind year? terms can you’ve like or of you do are what kind for but kind would

Jonathan Neman

happy that I’m Yes. take question. Sharon. Hi, to

So in a guidance that unit of there’s we’ve pipeline, given. store XX lot from new a the confidence

our of While development And the confidence a it’s deep been hard. we permitting construction costs to of to have our the we’ve a just and in up say very pipeline challenging over us around a couple environment, ramping that is pipeline been past – continue gives have a challenged. the I’d lot be years pretty

that team confidence job, incredible gives has which keep Our done to guidance. the us an

inflation, costs, of of procurement we with have seen here. able buying mass and lot ahead terms again we a to plan are In some but

the So we’re the industry team. an to somewhere digits mid-single seeing that new in unit seem inflation compared in probably

that. pretty we’ve that, return that feel capital good on able we are guided to about So with the And maintain to.

pilots. As innovations, it relates we’re the to store new and calling those kitchen, both very the what our early pickup sweetlane say both are I’d

team We return do the out experience, to they testing meet capital. But experience both those capital. understand the on threshold. and we’re course, exceed current So meet didn’t our them of consumer those wouldn’t we really ultimately, to return our expect if or the member roll on

So we digital the think a again, convenience very of infill seen And with of great seen that create you’ve the digital pickup with a way sweetlane, that have, the we we given rest penetration penetration, for to perform do, should industry channel factor. around we we’ve convenience. be And like given and see, excitement more us the lot we’ll well.

Sharon Zackfia

you. Thank

Operator

hear Next we’ll from Charles, Cowen. Andrew

Andrew Charles

community in Great. for of in guidance you is about guidance not to confidence wanted conservatism? to great intact. was rationale board It the end Thanks, to to XQ just led point you just you you’re thanks having for and guidance? the range? guys is see the XQ, the the your high this keeping guidance seeing And trends there Or raise in decide Is investment that something beat XXXX across ask but updates. positive guys, the

Mitch Reback

for the Hey Andrew, question. you very thank much

we change very, we to factors very look conservatism. on lot any me seeing I more on The optimism, time let paused would business, the question. control more recently way the inside, we’re I just have happy we’re the at say, think And reflecting it’s the the can’t nothing a guidance spent to of a great and have with. question that

very had we operations. We’re Frankly, the factors. has. bit many the of read level margins, The with company What analysts. things we’ve disciplined the frankly, of the losses really shrinking are approach on a external from G&A rigorous happy the the restaurant that restaurant little us are and concern, and quite causes the

So as we at execution hold guidance as we’ve we at us for that inside, the thought see see really ago. steadily together, look the two taking weeks about our And improving. we we at we world, added to the was we pathway as point the gave look best this it the outside eight

Andrew Charles

the helpful. That’s Okay. I cautious appreciate optimism.

Just a follow-up.

in and even is in any With mobility to the in Omicron you cliff from volumes intensify February, urban business are urban central sales look the it in in growth to suburban at similar to April, grew transfer kind post return January, as March the one of the suburban seeing Omicron way locations. office? interest Maybe sales between rebound after commuters markets in

Mitch Reback

I’ll Andrew, no as No, recovered, have change you, urban stores. in the our tell have stores suburban seen we

that by encouraged trend. really We’re

Andrew Charles

Super. it Thanks, I’ll guys. pass off.

Operator

JPMorgan John Ivankoe question. has from the next

John Ivankoe

openings, of ahead review thereof in in so? in some you’ve we there’s like Hi, XXXX. you May openings eight you success guess, what six opened go if stand and areas. in it’s highlight the of the expectations, – or over being those thank or the performance possible the to can either back gleaned as have some first about new any particularly how of we suburban of talk of or Diego. I And residential from quarters some on eight information that if in and San markets of in guess, quarters for been that quarter comments. newer for XXXX the lack performance line you. Thanks past can XXXX maybe the the market But the I or And of you XXXX the class, seen

Mitch Reback

for it outperform found pin our perform behind the urban class question. dropped. model. it’s for the the it’s urban pins the markets thanks is exceptionally The The with almost latest of question. bit, It’s from they Colorado, for new centers. forma really rest interesting really where slightly and has just means What as Florida. which found whole most we an dropped new some notably of been proportional our like like got pro almost little exactly lagged stores fleet, stores suburban of market keeping be Texas new And stores in us, we have which XXXX what and markets portfolio. continued the John, in to the to to is is the would example, with where the lagged the the A performers good a with

John Ivankoe

that accuracy. terms pin XX.XXX% to of you informing And forward, I dropping doesn’t of mean, see what in it mean Okay. you going get necessarily the

So of the you about have how that of XXXX influencing strategy, perhaps the and number begin me, think excuse your as in last site openings. quarters, experience is marketplace the some you over to XXXX

Mitch Reback

XX% we’re example for better markets. pipeline that continue Yes. capital to And finding that of get markets impacting XXXX those I’ll of in is to openings. give our an focused is how in category, the to you that’s our have and it higher we the what results suburban continue the return XXXX. into flow

John Ivankoe

know about I IPO, of – a talk frequency customers one drawing we from as you’re to points when – I wider guess you have presumably need area. And of as as part discussion suburban the the

built suburban. Sweetgreen Or that less talk be mean, you relative customer I from consumer about, often? that the I guess, or actually of a on? similar more I can the urban demographics you to, guess, mean even often? changing go urban that and are may shifting differ Are the wealthier consumer. the as in is I you come how brand is broader seeing you the base was to I seeing coming fact, how experience customers guess, So

Jonathan Neman

it’s John, here. Yes. Jonathan

So intentional. we and our been that’s really seeing consumer, broadening of very are a

our and more with we’re our You in as well positioning, channels the the lot we’re driving. with see convenience it a of brand menu what doing as

of strong are marketplace on has native. both of our suburban footprint delivery one really been the and our So channel, parts

to give for And lot of will our so our development demographics broadening a confidence consumer and overall, just us continue there.

John Ivankoe

you. Thank

Operator

Glass. John And hear next we’ll from up

John Glass

last are your over really few changed channels, the mix and volumes your digital much hasn’t overall between understand quarters. higher. the digital that digital own total I Own

as are When you And higher loyalty what of about you’re to – doing part programs. – moves assume digital. year is testing you guess, to does launch to I intentionally be talk digital get that on move this mix can program those mix. the it, system-wide year? sort the going working in a a XXXX I what is where might I own improve How through of that what of is think the you’re maybe question So a long on take, some own in Thanks.

Jonathan Neman

Yes.

take going I’m two in parts. So to that

own digital. reason around order very want to focused best we we the – We’ve we’re the First, at been driving. share intentional to very place And make that and Sweetgreen number something and is the Sweetgreen. on

A So a delivery That we around the done quarter ordering We’ve today did menu, improving value. in a includes better that. do experience better specifically. lot lot We broader a a the to drive lot. experience. last

improve improve We’ve an on our XX app, of lot example, it’s that. done speed just of to a rate about satisfaction that We’ve have a you delivery. today, So the on half a as our Sweetgreen to done to delivery the miles or channel. marketplace, lot

So continue Sweetgreen. again, our to going make own a place better to order to channel we’re

penetration. menu to the you largely the it’s opportunity as because and the to for a it high see lot in the we frequency every fact mentioned can As is big of that and really you one, habituation think brand opportunity it us. a digital due with a relates think big We two, loyalty, the day; it’s remarks,

it leading to of coming a unique launch can there’s of parts kind it year you right. something And think to a piloting do year. the see loyalty. special This to XXXX, we together. a And year, will testing as really is which more really be opportunity you So relates said

encouraged we later then is this personalized tested which did successful, challenging, results. really we more digital we’re And the they’re Sweetpass, CRM. as summer, launching we – mentioned, So very by around

that So see we’re what really excited does. to

can a a as to component that or up those for have users loyalty personalized combination component to you for that well. want everyone being two, you the of sign CRM and then imagine Sweetpass, almost You have

John Glass

like part Why not Or a you Was how you now? include? right Was you’re exactly, you can advanced us was do like remind about it? it large when what remind just you – stopped one? us you it to didn’t you get why it just that? discontinued talking Can that

Jonathan Neman

Yes. exactly really a It right. program. discount That’s was

consumers didn’t seeing didn’t be honest. wasn’t in company, nature we for much So the it find it, that do loved was personalized and it and it to

So delightful company. for was that’s really we a something the way something more and win-win-win. our real a And create sell make to consumers that that

So really we of a happy program for big leadership. think we’re moment, it deck to our us, And be this drive really sales will to consumers really did something will for with we – be it only special. clears a painful really love not but that up lot come the for we and digital and loyalty driver continue will that something really us penetration

John Glass

Thank you.

Operator

hear Next up, we’ll from Jared Garber, Goldman Sachs.

line your a is everyone. Garber, Mr. minute Just open.

Jared Garber

hear me? Can you

Operator

Yes.

Jonathan Neman

Yes.

Jared Garber

update missed this how here? the big are give Devin or outpost? opened Booker, that an partnership or to the of a as could end on announcement you Jon the just there to two update quarter obviously, if new I now of on us with for quarter the really in reaccelerate I there’s give or know sitting was us outpost Mitch And to sense the in one. where urban you see. just get with cool can starts of many the the wanted I’m maybe then second to questions. at you you program the if push sorry first kind an I Maybe great. a on But environment normalize. Okay, been quarter two,

a Thanks. in some wanted kind was to brand. right get partner maybe and he Just different of maybe of a consumers why the to to bring sense if strategy that’s the

Jonathan Neman

Jared. Hi,

the ended quarter of we outpost, terms in So XXX with outposts.

really almost businesses XXX to So seeing has an the the people outposts to are we from amenity. a of as in as world lot opened excitement work, getting up wanting added and Sweetgreen we’re quarter. bring And back in

of So still the And that we’re and signing acceleration of as in but up by early very, to back recovery. routine, number encouraged pretty get have businesses normal the sign-ups very outposts. people to their

campaign food. a food. brand people is and about for speaks of brand it. fast that the and of this changing As greater really about launch sponsorships and it on is really to think us, vision And And redefining about lot our excited the way And partnerships. it to relates Monday, about sports

like you were partnering long, fast eating. we’re eating, these shift it athletes fuel Sweetgreen, eat promoting really actually not Sweetgreen and so with Devin, people brands actually brands lifestyle, paradigm use – had they to support For brands to like healthier them. trying their around And we food that to who this were support

terms just go in could Devin. the future, Naomi. it’s Right Naomi, where in now, brought back of and we it’s it just Devin So not

to You us the about over the future culture, lead can tell stories of the food. years continue to to expect for

Jared Garber

so much. Thanks Great.

Operator

Brian And next up Bittner, we’ll hear from Oppenheimer.

Brian Bittner

Thank you all updates. the for Thanks.

dive line, As to impressive this results restaurant one’s margins particularly the how line item. the not on it’s really leveraging level no were the that notice leveraged where COGS quarter, into we hard you margins,

know said, But You to the you you year. more expect leveraged last side that points you have It quarter unpack Mitch, the can I how be them the margins full on line have that pricing strong strong you like your COGS not passed guess those was, with out I a And there. about do behind in question XXX basis basket assumptions cost is seems growing year-over-year. that for peers. year, outlook first food as it the you like just given seems as is,

to that item quarter. first can think you to relative color line how more any on give So about

Mitch Reback

really Thank It’s a those everybody very the in really sourced. I say important locally environment planned that you, and been we’re plant-forward really, remind we in, two to that’s a What significant have would we have for in is And have it’s really, forward us. advantages menu. Brian. menu that time. this question And good

where revenue led have our versus with the relationships in which – first knowing we chicken, XX% is what contract, oil throughout what have in during now see quarter. and look really about food the of to to that many have long-term of the of guidance pressure of Finally, avocado, we are was out of it XX% under those the to specifically sunflower going we our our right we year the XX% than When We build held distribution. rev it the revenue suppliers cost. in contract quarter. is past see is farmers, pressures me stick those to first And pricing and

the first see you reversing next the no pressures if of inflationary and quarters. three against some X% do increase, essentially, we So that the math, virtually in the quarter, price saw

Brian Bittner

sense. And That that makes is the follow-up just to pricing. a quick on

you Your is price, thereof about taking know pricing pricing or your own it? but the And customer if about your actions? what analysis recent love need says pricing resistance your research to lack power to you Everyone different that your is not peers. future tell into what does your from I’d

Mitch Reback

this customers obviously, no our resistance our inflationary believe we’ve talked see seen in when point prepared We in that call, in we food that So really last signs have open at. we last we the say for think freshly the we with bit We probably We a resistance. about time, this in we’re I increase any okay pressures At is further increase. don’t call build. much price would historically where of to saw XXXX. and cost understand a we’re little the food. need not said of if we price seen What were real a

Brian Bittner

Thank Great. you.

Operator

Capital Markets. Chris is RBC Carril, up Next

Chris Carril

Hi, the thanks for question.

to following around capacity execution. on earlier and throughput. Just comments ask about I up wanted

to on Just steady given are trend now. AUVs and are $X.X up upward million continuing the here,

more front levels, in to is throughput digital line, strong here. remaining given hear about curious just particularly the mix Just

Jonathan Neman

Chris. Yes, absolutely. Hi,

on understood of that trajectory, a huge capacity is we going early growth. that cap lot our revenue be and in part to of both very huge we a about something part So think and Sweetgreen throughput digital

of intentionally our built lot additional of we’ve a in all restaurants. capacity So

well So increases revenue. we digital on for very feel, any the side, digital prepared on especially

line As it back definitely has made pre-COVID levels. to continue, not you

back. number we’ve going But throughput and initiatives So front of comes grow initiatives had the of lot quarter. throughput future we still to of a actually a line the on a the in room front to like that we’re there’s feel on as share that line number

Chris Carril

you. Thank Great.

Operator

Teddy go Farley, we’ll Citi. next, And to

Teddy Farley

Hi, part the week. either if taking curious question. or in thanks for seeing was been any distinct day Thank you’ve you. I differences day just

Mitch Reback

now to say, In an history nice This Sweetgreen’s said linear neither been that biggest consistent, recovery be was is the pre-pandemic, I we interesting day. big was week in a when and the as is through, down. began business the we Teddy, locations. Monday Tuesday the Tuesday, you. is example. particular, the Hi taper find Mitch. urban of And What went to week, the volume Wednesday, stronger would day nor always the meet Thursday has in that would

work in seeing pattern the business. people their as our have a changed change we’re in So patterns,

mix we’ve in change seen really in business. the daypart, daypart significant of a the not terms In

Teddy Farley

Awesome. Thank you.

Operator

for additional does the that At to Mr. I like conclude would question-and-answer the this session. over remarks. to conference Neman Jonathan closing any everyone, or hand time, And

Jonathan Neman

for Thank much. just so want thank to you everyone here. time I your

about more of food a fast ever head going center While great of, It’s real together food. lot that Thank and and been I vision guys support their connecting proud of Again, quarter restaurant want our about we’re it work. all mission teams, much. a to to was hardworking you we’re coaches to our we’re together. what Sweetgreen for our of excited redefining of excited we’re people our really than so thank tireless and long-term build

Operator

that would We all conclude like your conference. today’s thank you today. Everyone, to for participation does

You may disconnect. now

Sweetgreen (SG) 7 May 222022 Q1 Earnings call transcript