SG - Earnings call transcript Q1 2024

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Operator

Thank you for standing by. My name is Katherine, I will be your conference operator today. At this time, I would like to welcome everyone to the Sweetgreen Incorporated First Quarter 2024 Earnings Call.All lines have been placed on me to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. To ensure that we can accommodate as many participants as possible, we kindly request that each participant limit themselves to one question and one follow-up question. would Nounou, to Relations. VP, you.I over the Thank Rebecca to Head Instructions] now turn like call [Operator of Investor

Rebecca Nounou

you, everyone. afternoon, and Thank good

Here begin, we and a couple Neman, Mitch are Chief have with reminders. Officer; Reback, we Executive and Co-Founder Officer.Before Financial of me today Chief Jonathan

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

uncertainties.For company's call, which reconciliation of Risk These nature. will or A on XX-Q. and this filings, of to available statements.Additionally, over certain financial differ and press no non-GAAP Jonathan latest revise our measures to GAAP. may those and today, for quarterly in the expressed Form information these assume SEC Actual in implied forward-looking report performance Form various we a as measures, in update or more our materially of prepared to be accordance including on GAAP forward-looking of comments be the my making on we discussing afternoon's obligation it's website.With of to a please substitute IR are statements with will that, release things this filed some titled turn be annual found the nearest off. measure results pleasure During US of can items we subsequently report Factors section call forward-looking addition publicly kick are XX-Q financial in not to to the based result and as these a filing information our about review from risks on risks,

Jonathan Neman

begin is of continuing had Sweetgreen to XXXX. build end momentum The we as the XXXX at

end and driving experience, we the profitability With quarter guidance. the focus first our exceeding are adjusted growth of EBITDA guest on high

working. is strategy Our

of long-term points revenue restaurant We efficient unrelenting year-over-year work representing their reported results have level Total performances of without want our in a growth.The wouldn't of capital year-over-year, drive multiple those XXX digital them were gratitude build from to highest million, X%. the ago. quarter strong for each quarter sales be for over hard team company's mission real via a the of my Same-store first coming sales to first channels. moment to and passion increase take our members. quarter year XX% to XX% connecting represented possible a making today the XX% to was on people growth. levers of own XX% million, history.Restaurant-level for XX.X%, our Restaurant-level our I with to total $XXX.X extend this food.We of to further basis foundation of one digital was margin quarter a first sales the the $XX.X profit nearly margin first expanding sales

Additionally, positive the for adjusted we generated quarter. EBITDA

of simple: creating to strategies driving goal call, connection guests building by with on brand products on improve both are one, and years, our by As and our operating growth model the last these and great I and restaurants.Over been focused profitability. X.X financial shared we've the expand guest to revenue great building past our experiences; strategic our our priorities continue two,

expanded margins this from profitable demonstrated the of results and growth, some QX highlights EBITDA Our share me quarter. revenue growth.Let adjusted

market, opened a we of in six restaurants, Seattle. including these new quarter, first the two new During

We and also San opened restaurants Miami, Denver in Austin. Francisco,

our the lower our suburban white We $X.X of first points trade brand the year, these, urban model, footprint, the of unit Seattle, benefits there tracking that with strategy.They to average location one performance our one areas of and better large weeks concept. massive of us such South reach openings, our become current quickly an are in order demonstrate Kitchens.At turnover. demonstrate XX average throughput, opening, which million, strongest our recent faster the continue the XX%, existing as volumes team to Lake greater the company's confidence have revenue, at Our Lake akin in also fleet our go-forward our accuracy, remain restaurant two average Infinite our QX average, significantly an top-performing in delivered like Infinite fleet two pleased and Totem above the quarter, new physical average in portion weekly category momentum located average.Building that quarter operating operating is in margin had defining history. consistency the an opening the of additional end than volume are Union giving one of and deployment cohort restaurants outpacing has Kitchens restaurants, substantially to first of XXXX member on restaurants.Openings they space Both of the to for already the has

three the Additionally, with operate to higher well track approximately on to urban XXXX, large we continue checks see average to open the new markets than Infinite retrofit remain we they Infinite restaurants Kitchen four as in.In restaurants Kitchen. as seven

powered in retrofit first be of plan Infinite XXXX, increasing Our to New new City this the number Kitchen. York by restaurants an summer.In deploy we will

see markets.In lower unit As the Boston growth with and beyond our and Protein Garlic across the traffic, broaden year, road this Stake drive XXXX at to launched to XXXX targeting United opportunities continue test plan innovation, to return the dinner menu, execute and February, markets.Starting the real menu culinary continue in XX% the year of of end to white we our to check. new build well the range map growth we Caramelized across range.We States future at both rate and we and our of market. upper of over-index as mix new per existing plates a next estate end tremendous a pipeline, we Southeast our Texas to in being and space XX%

Garlic of our pasture-raised time.We bonuses head aligned local stake real EntrÃ©e, Steakhouse the operations. grass-fed, herbs.Guests lines our spice is what any on Stake guest we making ingredients in Our to turnover at roasted connecting deep team for the always retention time our ranches At expertly deliver Chopped The is with in-house than our protein Steakhouse new internal steak oil in COVID.Our to our five process quarter people was and commitment to culture, want. completed to included ender XX-day guests throughput. a order our seen and exceeding in sweetening important our we the most the is customers including for have to running tipping saw the members.As to XXX% forward, Sweetgreen, and Boston, garlic our XX prior into And Garlic high-quality, menu stake the our something food, source become with our cuts a to market our practices, plate Coaches in introduce result of our we by with from with great XX dinner the item.During our proud can seasoned we've sustainable steak, of stake Head as nourishing option Chef-Crafted sourcing successfully standards.Turning We've are goal are grassfed around stake Chopped launched in incentives is favorite, our blend well in to it around talent the lowest with of front since commitment and add Caramelized investments the phase are daily.Our rallied coaches seeking any a priorities, Having to farmers sourced prepared dinner level in quarter of features innovates all first they've Incorporating restaurants. way and finish and for the the a experience nearly stabilized align higher points of are these orders. who internal our and our Over ingredient test Caramelized XXXX one testing in our prioritizing years, of lower first to on compared to our organization percentage. blend, driving XXXX. or has promotions. finding this from of and provides high and we've this we XX% custom as points They increase existing been move mission including serving to of and we guests Tuesday.As as past Fleet-Wide stake listening our Stake menu, are restaurants customers believed to more in expectations, to The

have As to time plan we strong pipeline are for walkaway the we we all future members.We years where have demand, a a our urban of excited Head lunch ramp Coaches and come, of team to capturing know remain restaurant growth additional openings in opportunities factor. focused on we our the about

progress the made few meaningful the labor Coaches floor spend over in and Head customers. We improvements scheduling quarters with last more time on having with have

routine consumer selective in-restaurant quality our increasingly dayparts. organization, and focused and menu there margins.Today's quarters, with brand, labor for on deployment by expanding their they innovation. given deployment improvements and product is reducing unparalleled growth on how choosing remain coming across the Across further income. the with are are our Over great mission-driven and discretionary we time operating improving opportunities Customers the restaurants, leading we hospitality all of our Sweetgreen, offer value to tasks spend

our with cook every ensuring This sourcing the has investments our know menu. and to financial and is and We in team making the we the proud every restaurants. model farmers dedication scratch Our operations commitment the one. evidence of guests.The on our our we restaurant line together. are right is day our each permeates top quality aspect trust, I'm partner promise accomplished of in highest to ingredients our our both what in people, of results very profitability that are level positive

to the ahead, with in and restaurants high-quality the rollout also in exceptional and accomplishments serve.Looking through massive have a we food Kitchen. financial bring their food results the to communities today experience hospitality industry of real in opportunity their see Infinite You the disrupt and the our more we

for We our business the to I turn results in detail. future generation.Now are Mitch review the to over a healthier call building next and a financial further durable will shaping

Mitch Reback

afternoon, good and Jonathan, everyone. you, Thank

driving As you mix. only This quarter. each from the X% first month the Jonathan, of quarter improved $XXX.X within flat across million a consisted sequentially XXXX million, demonstrated Total from business. the was just momentum the for that heard quarter, in traffic XX% related revenue first the grew is strong XXXX, same-store quarter first up sales benefit Same-store $XXX.X the from quarter in year-over-year. of groundwork prices first year-over-year.For menu the and sales X%

both additional Our QX January the of and two the holidays weather by quarter. in impacted was inclusion traffic

excluded was the the restaurants. new our factors, The level margin was revenue the was growth in Restaurant restaurant million. accelerate than of Our our close some quarter a In new continue $X.X comparable basis collectively This XX.X% XX.X%.Additionally, their from the first our non-comp margin quarter substantial margin greater fleet Southeast point in XXX level from of first expansion quarter and level had result strong collectively restaurant we a average that improvement average XXXX.Our unit restaurants restaurants of profit XX.X% in the to including is the the fastest base particular, grew saw of had in that newest profit margin volume XXXX our is several quarter our XX.X% from ago. growth compared double-digits they to a improvement of as that first first sales in restaurant markets year ramp. markets. was of to and are margin

restaurants. across legacy having on also guest both to our to improve head markets throughput.We more disciplined continue expanded of focus a scheduling to as our expansion and of and time floor spend portfolio across We labor result hospitality on margins the margin coach

Our fleet-wide ago. million, level quarter a restaurant basis was margin from XX% nearly profit trailing $XX.X increase Restaurant is on the year level for first a XX-month a XX.X%.

approximately please opened For we figures, quarter margin GAAP comparable of to two a the and XX Totem anticipate In Infinite first and Kitchen. South ending of contain of six refer restaurant-level earnings in opening we total the Union reconciliation the a XXX Seattle, restaurants, XXXX, which between release.In restaurants, the of will Lake seven quarter Lake, including XXXX, XX restaurants. with to new

of to improvement general related improvement increase credit year-over-year. related opportunity a center primarily from XX% in openings in were stock-based Kitchen the quarter, half due or white in with labor or compared to revenue for a of expenses year-over-year. decrease the first existing benefit fiscal improvement expenses both to tax improvement plan This of new X% due growth XX% capture giving price the and point period. continue XXXX, for around Infinite by a Jonathan accelerating $X.X mentioned Our This $XX.X of new and and XX% year million to and earlier, were that leverage administrative and was new XXXX. General received to first basis the year.As million was first over and the year markets, revenue offset markets.Food, quarter. partially basis our we the primarily in million from We're are revenue $XX.X on optimization.Occupancy expenses weighted expenses operational in pleased in back prior space we This point that as price the early confidence the increases. XX a packaging reads menu were $X.X XXXX quarter, menu in us of administrative towards retention the XX%, of the XX is and and in toward of the employee for point considerable results have restaurant XXX basis unit XX% to demonstrate revenue was XXXX improvement compensation in expense.We attributable improvement costs million the year-over-year. support revenue, in an increases a primarily beverage XX% in were the quarter Labor

the retention credit $X.X the benefit costs grew as of Excluding one-time of grew million, support XX%. XXXX sales X% year-over-year our center

loss one-time quarter, the associated credit quarter TheAdjusting and restaurants.Adjusted of quarter decrease excludes costs.The of The as EBITDA, in guidance. described the $XX.X profit of in from million pre-opening year level an due were Spyce, $XX.X and our profit decrease in in loss increase net a quarter for EBITDA XXXX. credit additional ended first partially million and and to was million prior consideration offset million.Now of the previously, the was our is for in of first $XXX,XXX our in compensation change for restaurant fair restaurant quarter expense million was $X.X in an increases related in expenses balance employment turning and $X.X depreciation period. Adjusting compared million. primarily the amortization improvement employment a value the loss net acquisition administrative of in the adjusted $XX.X level to $X.X Our of our in other of which $XX.X as increase well to XXXX, first improvement million contingent in as other for a million the the million expenses onetime improvement adjustments, general an first the year-over-year quarter costs increase We to certain XXXX. with with our pre-opening $XXX an in cash increase the from by stock-based

openings. XX%, our For $XXX and the $XX EBITDA to XX.X% $XX our our restaurant and create to These on experiences growth to we margin Sweetgreen focus points team guidance expanded first million restaurant-level updated ranging fiscal EBITDA XXXX, shareholders. to of from XX basis including the sales customer year the and to value reflect between with level XXX saw innovation, and million million, XX traffic, between and margins strength to we adjusted XX% X% growth for quarter, delivered Revenue together closing, better net adjusted new same-store over restaurants between strong million.In are of $XXX restaurant revenue infinite as expanding as our drive and well $XXX,XXX.Looking by long-term ahead, unlocking poised of positive member great menu kitchen. initiatives, the committed remains deploying offering running X%;

call back operator focus turn ahead.With positions well to with the a growth, unwavering that, opportunities sheet us for the coupled lie on Q&A. Our to healthy sustainable I'll start profitable that balance the

Operator

you. Thank

question-and-answer of session. Instructions] of [Operator the comes We line will now begin the question Brian first Oppenheimer. Your from Bittner

Brian Bittner

And first the midpoint, same-store to XXXX, suggest as for dig update at to was now to had which and X%. looks the it XQ, guidance the similar state you you very sales X% not on year quarter some X%, would quarter its the guidance weather want rest up I This out, is tough was And which just the in and of your really did raise. impressive now into range first the have rolling quarter. impact

guidance? the the can for same-store else the remainder Or regarding year? new assumptions baked is perhaps So some your into sales there anything conservatism is unpack there of you

Mitch Reback

I at Brian, understand you're question it. looking for the Yeah way the

says is I period, to starting heavily lot given guidance doing into And I Memorial is for summer. launch Day only as that taking negative really we've how the prior saw with if think the would the around we that approach came the then uncertain that of and fact the frankly, the through history. business.And major factored a what we're really company have years, that you holidays two impact not and on two days as of Tuesday recall had a the particularly we we're our holiday had stake think what the say through simply I traffic

Brian Bittner

the helpful. And lot what and new a hearing That's do really on inflection positive performance earnings does that this is about how believe calls, in you past units commentary forward? how the -- of strategy on and behind open outside to unit I'm of And new led profitability unit than inform moving to just more the the new are -- follow-up my that has units going volumes you're you so comp sales base?

Jonathan Neman

want thanking just our great start quarter. off all And together a for by with the team amazing to putting Sure. work

were we and expansion continued of a One, for things think markets some that in are and lessons at also adjusted estate of we've open. performance of some we attributes I grow. clearly an unlock -- can an that Atlanta once a a staff at also as being we and think we've learnings them, like the to the we And waiting target as and there's you've the that struggling, our targeting, brand adjusted unlock taken lead you coaches from brand lot Seattle operate past around the taking positive markets a see had of brand our those those internal there awareness example. of of how to talked our have we've successful perspective, unlocked a stores, places and in those suburban head we've restaurants, great train us Florida. growth.We've Texas, we've seen as I lot we've And head our the stores.Secondly, them awareness lot seeing As new that training we're how what marketing business, up has we we the done. and restaurants.And lot we open are a the the the strategies. bringing our understand look the how especially the of of coaches really having calls, new as I them. past promotion lastly, culture in few and understand units, our real focus there's then about and real look adjusted for and And that estate, how to

seen So stores launch, we've we how for not to months, open new three new shifted we've as positive the how but well for XX as results. six just support as restaurants, to could really market the those and we -- first

So good about we feel new really the stores.

of our momentum think and we a getting pipeline. of lot look as I us gives to here it we're confidence reaccelerate a lot

Operator

line of question comes Rahul the [ of ] from next JPMorgan. Your Kumar

Unknown Analyst

on not it's and an increasing side, focus. the chain It's optimization supply

examples are And we follow-up. have discussed perception. the the in quality we not this cost And evolving would set I worth discuss an with can I it's local you think it's say certain currently understand underway? be you What on process, past this if inning opportunity can some but exercise? on I less a the how ingredients or

Jonathan Neman

Sure.

that bringing can constantly single every -- team ways items to our meal. we new guests love execute every our but innovate with to we're easier menu, so our for will on it to members book promise looking deliver So our also making in continue

very steak with we a launch we time also for forward And the on of know, arrays. some And that grass-fed of proud so our big that put the as first very you first this menu, having pass it the offering meat us, was menu. with in simplified time launch, process,

of things it SKUs So a few continue make a to we couple moved to easier. optimized and

for we're sometimes rationalization heavily you where give things value, -- cooking we the looking year, to don't down.I'll at continuously always oil example. our upgrade value. to is not or are customer we some made double we're olive of say look Last what all around do I'd an want customers at of then the and SKUs that we So used

continue evolve. better is things like to we as at So of But we're one going things how philosophies -- as look Sweetgreen get do get our to of we we bigger.

to to people continue because looking protect food are and And what love efficiencies really continue we to see of quality our there. the that's supply we so we our scale, chain And as about really us. should

Unknown Analyst

like standpoint is labor the similar a XX And which believe or what points Perfect. you today, compliance on hours prep from streamlining you the on I on can of aspect? other labor labor earnings scheduling are this and a note, opportunity talk current

Jonathan Neman

very say much we're around innings still early I'd in the labor.

we've as an perspective, of seen and we've labor, opportunity. we demand starting So, see QX, that but offer as a how in of and just made to in quarter efficiency peak that say hospitality this but I'd QX our deploy from a ton not is we're lot capture customers headway, expect, there better to

to about focus in huge expect. we those to we've many of being we a to we continue labor can how products house. talked restaurants, the drive at and put systems it easier also as and in will we've more And today, But back peak look upstream different things over on and we efficient prep we'll tools at in in experience and easier that customers it both we customers staffing past, for on think the that make labor.In in periods. make those the efficiencies efficiencies what how do deployment more to make investments consistently the looking again, what can easier provide as that time are we we both around ready that So serve of deploy job

Operator

question William from of line of the Sharon next comes Zackfia Your Blair.

Sharon Zackfia

to California, don't you went you you but Maybe allotment. questions, of I when but expect you California, the inflation quarter minimum did did guess where saw you be price relative give second wage I know labor in of incremental I what the labor take California? first? In pressure to think kind an us my wage pay idea in see healthy in up, already two a in

Mitch Reback

quarter, first the In we saw little. very

place know, hit the April the It's Wage took you California Act Xst. second As really quarter. in

Our go price do kind of XXst.And February to increase California, pressure a in single-digits in that for year anywhere time. in point up more we rest and the see wages with which question, not a high at lot place the broader did of the offset California, mid X% of took labor this in else

Jonathan Neman

Yes.

So just add, anything could I Sharon.

on mentioned we've fully making so the can through a how the much I is prepared I as over think what comments, sweet them in strides flywheel at actually we've And all you'll system, call and to our of and and quality Coach time well somewhere seen come of we've getting American That of in grow internal promotion, made the being as $XXX,XXX huge to we Head people the within great team team rate. bigger years the as lot a a what focus at our internal Dream promotion starting is things three a much seeing Head As offer call see focused in. drive them Coaches really of the of year. member I momentum of I our stability over we we're with part a continuing on that talent really continue staffed more as think train levels.And

great something huge create members. it's for team only do about great a not for part customers, trying but what our So our we're opportunities create to is

Sharon Zackfia

time, there considering remain kind metrics relates very healthy then at where if level. Kitchen, Ultimately, I locations lift the mean as all the just Infinite you're the do kiosks would consider getting? is check over just Infinite And just on to all Kitchen? see you adding it the are overall this fleet separately, where margin given retrofitted?And of you something eventually locations Great. not,

Jonathan Neman

Sure.

pilot stores Not had quarter which the excited XX of we're stores mentioned, what seeing of we're the of have, about about -- we I we're as perspective.So, quarter, ahead that seeing about million expected the on trending the great XX% the from a expect delivering points economics on customer Infinite we in So that Kitchen. with we towards we Infinite results we feedback margin Kitchen a are We're X perspective. ran unit AUVs, two fleet.Last from only are rest $X.X two seeing kind so stores. the points of leverage shared very

higher look it's us.As think about So could go-forward than we're bit like seeing promising we a we that, Infinite going what going think kitchen part a forward, strategy. be that's very to of and the do little our for huge

the of we and set up to get -- this machines -- both drive and in experiences in As manufacturing those continue design how the more confident what we get down cost the to We're fit more ton new into in to year. stores stores.We places, mix four deployment going experiments. of retrofitting a to our learn you'll this higher much about see talked those three a from

learn what there of start the fleet to that the talked what time we'll is bullish of opportunity that cost pull there in but does it learn, do the for wait of is, and NROs we feature Kitchen we at in we we probably think tackle past go stores that a as renovations, terms be think and renovation is as to about and of huge the but each technology frame I'd uplift everywhere do and of high-volume As for they a expect Infinite bit we the well. about much I understand cycle? to year. what Or and is have retrofit.We've do it downtime more â€“ much we And renovation lot we're say that chunk more deployments there's the learn go increasing future huge a on part understanding we'll to how the we definitely an how the back and very the the percentage it a forward.So experience, we start we of very to more think have learn can little retrofit,

Operator

comes the question next of Your Citigroup. line of Tower Jon from

Jon Tower

Hoping others from kind quarter you quarter first of could -- we've heard was industry second itself that choppy. in the --

curious with of side? a of get wrong specifically on also what kind seeing direction to concepts. you're in of the demand, the going for quarter consumer to kind was on handful traffic respect Second your perspective I

Jonathan Neman

And Let other the end and halfway minute a a we the somewhere by and first a and didn't many halfway commented quarter off in first the attributable pick weather the slow the little calendar, little I of we're itself business a first bit something additional in then me single-digits, two first we're with and bit year.As mid-single-digits. about of about on.February, end I view second really Like to we quarter talk we would under in quarter spend through with a have to will still although quarter. in few what the March, start very and we slightly the X%. in little for we quarter, very started us, our second we on the second were saw, high the was January, quarter. shift up say, averages did ahead people in high tracking through quarter, out our guidance bit negative, holidays have people, our Also that that last off the remarks were

on and to On media. state really prior our the positive, that's launch to turning also prior us

quarter we're feel in we pretty at second point. So about good the at where this

Jon Tower

specifically, a lift could about you I hoping seeing appreciate as call, you got I and perspective. in was Great. were California. had speak Kitchens mentioned well you've last seeing you're into know the little versus nice drill Southern the traffic in bit the earnings Maybe the maybe as Infinite a stores check. it. on check I Naperville you that

led increases built markets, trended has those you in little has serving the what traffic how matured as is and level have around know you're expecting? that to kind as of a in the were technology bit traffic curious at to more those stores Just awareness

Jonathan Neman

under are you, are both So Both one thank stores John. -- stores year old.

-- actually able not we're its So just neighbor obviously one-year anniversary. hit --

think I it was yesterday.

So understand just we're seen what those we've to year-over-year. start going overall, that in momentum looks But to like stores.

stores to strengthening, weakening. has awareness as are so And not build continued the

people shared it technology putting about very reiterate feel scalability restaurants in before, love very that delivers. our forth. the So the asked I've it actually pretty the about lot and and -- what Infinite And as we what and about it of of those it we the we're technology feel what and And we're Kitchen, we is. level confidence teams is how past, we our feel good thinka said works, have -- the good the I'll about and I experience

to lot I within make the how more we and on experience of elevate better do see continue store that those how we that that iterate featuring components add you'll more to for us to magic to experience. things, is just around that think sweeping of experience of just designs is a there opportunity Kitchen.So and Infinite us something a hospitality -- do always sorts try experiences continue and we

very So overall, iterate continued momentum, pleased we'll to continue to improve. and

Operator

of Andrew Cowen. of question from TD Your Charles the next line comes

Andrew Charles

in to Great. ask included I that one mentioned five of orders. was that wanted about you stake test markets, in

Given sales loyalty the that robust data you stake test? observed of repeat users, help from can incrementality usage understand you and have us the you in

Jonathan Neman

Sure.

test consumer a in expand in a option huge as of there plates, lot we've dinner broaden a daypart won't think ago, Two we is about one that of good unless customers and days go with opportunity.So also, meat somewhere broaden on customer things it's encouraging, about protein, base. the had big protein So is also stake in, wonderful bring A was more insights business leaning ran the seeing a we're that and the the especially very one of which customers focus very been our stake on that was casual the lot surveys, one a and we're there's intentions with at reception. orders. fast of Boston. I to consumer, We're That we five we mentioned, the excited lunch. the

nice from seen rate well, gave which it as really why test have repeat is a launch. moving us in confidence really, a a We to

media So even people to has iterate throughout it period, by it's but results. encouraged yet, not wasn't turned and on as just and we only days early We in still test the recipes on the pilot some -- very trial. actual the and started we did period so very we're make two build ordering it. changes, coming early, saw saw we And improvements the back

new see more so price, drive some But should with dinner. perspective. hopefully things. from And we the occasion also in transaction we as tailwinds specifically One, probably a a hopefully extra some is you'll around stake what few customers mix bring growth see given see and you'll that

Andrew Charles

you opportunities a better also fully unlock you're just, can ultimate the doubt my ultimate follow-up the was of and the provide able talked identify Can throughput more Rosen's that once about you optimize then And product staffing Super. this? this brand. the no productive Okay. through think incremental on of opportunity, to staffing, initial help observations traffic you us

Jonathan Neman

ultimate traffic Are general? on the asking you unlock what's in

Andrew Charles

recently about? the talking From that the improved were you efficient Yes. and more staffing staffing

Jonathan Neman

additional Yes, things. pickup those One, there's transactions. few of immediate I think a it's the

think change around So go perception what you over faster, I a up brand. pick as can get time transactions. in you But the those you additional is

think are and then -- set, have how about your your that's in one or dinner about you your consideration you consumer time and brands in -- lunch that think So there's you and not. much there's

throughput, As enter that know time, and that have more we start over transactions. we up time to people you to start pick consideration that for that set limited drives

about seeing of moves are turnover already around why train head throughput, in huge, our labor, hospitality. we for really is talk throughput there our think we're to leading deploy internal our some why about how turnover, a we stability and and and our indicators our terms we So coach those teams both drive how promote, and we nice ability

field I our team, and started to amazing thank and here. we're they're whole job our doing, getting just So the coaches, I head think really our for want operators just really

Operator

question comes next Mullan of the Your Piper from Sandler. line Brian of

Brian Mullan

those to XX% volumes, to be? is Kitchen, that at follow on fair margin to Just it annual way a the an separately, Is clarification in that fair basis think margin And million Jonathan, might it X.X what then Infinite QX. on on about up an if would idea restaurant-level X great. location thoughts would be than that Just see something the an on think potentially maybe Infinite urban million, that AUVs XX%? to system average, see Kitchen location higher setting in happened any that were above margins urban above

Jonathan Neman

Yeah, probably nothing in Yeah, for margin million think $X.X lead was would think first two I I XX% Beach else. let an quarter and AUV, There me a IK. that to Huntington would the those for first in answer suburban the absolutely first us we the stores anything say Naperville the margin part. quarter that good for saw performance probably first is

still With the new Huntington that first store, is quarter. potential maybe very a exception Beach that was its

roll will little higher momentum stores, gets So correct, we AUV a bit AUV. flow that we be around in of the quarter, we're the more And retro. of the deployed for of call And call is upward course, give second in throughput, kind under urban with as improvement busy seeing higher cost margin stores, kind That the that. to up complete doing approximately hopefully us, a the Beach than next the numbers question in we'll we And that as in accurate on position in greater only particularly we're be cost goods of XX% that IK that or maybe suburban additional also Huntington reason no the big in is see uptick the will third the believe drag stores. largely of will your of forward.We believe that be through and the a as part throughput the labor. will driving

Brian Mullan

just How bit question is the Is looking about work were for next Last that potentially the you well. far out? on And along unit that that? at That's the you? you What's exploring you're some a smaller Could great. a doing? as Or Any development. color? you plan format Okay. further a or part are year quarter, talk mentioned of of two? perhaps just

Jonathan Neman

comments my continuing around we're about to the how Sure. That evolve plays actual kind of into earlier thinking experience.

expect smaller see begin and iterated have early on. units ready next those we've that And testing a should format so we few year. prototypes designs to And you

huge -- away those pipeline.I'd as from smaller look we're of our of we're think accelerate starting to about year one do a other So format, to see formats And levers accept, see, the that how say understand the of to we starting we perform. beyond a hitting, pretty part think we they kind to be they're we playbook. our as will as

we are have believe drive-throughs do we big And opportunities, something IK. especially the a at. looking really some powered we So with opportunity are and

with As you lane. know, great some our we've current suite seen success very,

We pickup also kitchen a only store. Again, TAM only IK phenomenally small, order into that know, a super the of lot is have well, just pickup us. for pickup adding and a you mobile that a which does unlocks

different opportunities of smaller as in some fill able formats. -- So, very we with and well that these densification already do markets in for of as we we types a forward lot in look pipeline, our actually see of kind of to already formats we we're

Operator

America. comes from Griffin next question Your from of of Katherine Bank the line

Katherine Griffin

clarification I just quick a question. and First, have then a

to that's revenue I So terms associated just because the assumptions the it in guidance had into downtime retrofit, clarify previous of case. with think some still baked the the

might It's you though the it into exactly haven't really like downtime guidance? haven't sounds even -- still what think that baked I like be. you quantified

Jonathan Neman

Katherine. Yes, correct, that's

Katherine Griffin

it seems -- much question Okay. the like. And the even like a how Plates quarters? of something quantify on I is do of traffic versus is of Great. just is more like seen transaction me Plates guess, frame trial Protein driver, pretty meaningful Protein couple Can going or as sustainable then forward? that you just you've last that growth from the then, much you And think over how that's help

Jonathan Neman

Sure.

Protein So I that. with can take been We've Plates. very pleased

it's as Sweetgreen I -- expanded definitely in created now people think, made it's something it's base that is at customer markets well. our dinner, again, new over-indexing and want

So dinner really we're the we're seeing really, that we're And is comps. coming growth as earlier, is seeing seeing growth the and performance weekend markets of of we're Protein from Places. I double-digit some promising. seeing, around where newer the mentioned the Much

Sweetgreen than going craveable, less we're continue months of hearty we see our So just still opportunity. build And still, see warm is solid to a on Protein more than Place, for again, but lot but talked options it's we to in and healthy before, as place, X with about guests. these we've the

Operator

Stanley. question next Brian Harbour of comes Morgan from Your line the of

Brian Harbour

closer to the is be is Or Mitch, on could of forward? to it us had X%? think for update number said you just year? previously still the pricing it the you going about rest right looking I X%,

Mitch Reback

going in point to in rest There's be point any to of at plan price closer I going moves we be more for time, X. don't that's And off, April. year. It's one to rolling think, the the this

Brian Harbour

of the improvement quantify just terms in you the could relative there could throughput, then Okay. that last is in order it other things year? for you've terms or topic of any you Got on might speed way about us, of and -- throughput operations, service it. And frame digital of to seen like anything say

Jonathan Neman

We we about talked with think an measure our that's period. before a transactions about a a one few what point about in about in ways frontline, we there's is that comp. XX-minute store that five additional in we throughput. then think on So And and throughput, both

then we then to average we're there because max the XX% So throttle XX backline, running. there's of a stores you what versus the the way theoretical that where max and a understand line throttles, the on which much throttle, see running, lines see minutes.So for in is more XX% data, the ton the minutes, we very are up we range. those XX on running where the is then and at at big understand a what digital call we huge best the manage for can we room make is where stores we things better opportunity we frontline And know opportunity.And do it's the managed is, have through look what have orders is in you our that we many stores to throttle if are, XX lines and --

They so to running them now that word as that It's -- right back. guests, again, we think great it this serve I'll that which habitual experience digital it deployed So you, correctly on to it. focus type there really we line, about consistent, to to feeling gives mouth. has the big this And continue take our throttles restaurants. of friends, food staffed to and talk opportunity get big really it just drives a nature it's make delivering much know is we we their the of a about of our trained is on opportunity.And a tell hospitable our which and opportunity and unlock it brings given

VP things do, very and So out very, we've in leadership, work the with experiences. [ as as when excited our they're her ] Operations, very here our drive operations this. And to we much under we're doing focused well we about consistent team, have we continue work to very feel Ann, well, of what need do as invested on good us to Rossann really to great

Operator

over to There Rebecca now turn back concludes this session. will I time. questions further are our no the remarks. at for call Nounou closing That Q&A

Rebecca Nounou

again thank we'll Thank for you in mission. take opportunity our quarter. And you delivering see to I'll everyone. Thanks, all team. Yeah, our day just that every this you do next

Operator

This concludes today's conference call.

may You now disconnect.

Sweetgreen (SG) 9 May 242024 Q1 Earnings call transcript