SG - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. My name is Jeannie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sweetgreen Inc.

Second Quarter 2024 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Rebecca Nounou, Vice President, Head of Investor Relations.

begin. may You

Rebecca Nounou

good and Thank afternoon, you, everyone.

statements Q&A today's Co-Founder Neman, on Both being the be during to webcast be call recorded prepared Chief like are in Jonathan our Chief call. also applies our everyone of made we Executive will included These on to today, the that or earnings assume Gap] questions [Audio to based replay. will live statements and our all following Officer; forward-looking the is Officer. the information remarks. Today's as no Speaking heading, forward-looking forward-looking Financial statements. information call publicly the comments session for under and I'd and revise Reback, during Mitch and remind release update obligation

our corresponding for our release direct measures. We financial additional measures, reconciliations to their also of use mentioned of you with GAAP regarding measures call including non-GAAP financial non-GAAP the information on earnings

With found kick Our my things be to earnings turn release off. Jonathan pleasure can investor on that, call to to it's the over website. our

Jonathan Neman

over and This highest the Company's points of basis the traffic the performances X%. margins in mix. Restaurant-level team. and of second strength and menu year-over-year one XX.X%, XXX impact positive a this Thank consisted X% strong for had of a XXXX, the a growth expanding grew Same-Store laid testament everyone. quarter $XXX.X to price margin sales X% our million, strategies, We representing Rebecca, good groundwork our benefit history. the sales afternoon, year-over-year, of and from restaurant-level of we you, We second growth. making quarter, was reported in the XX%

due restaurants. and quarter. operating launch $XX.X execution, of Additionally, creating guests disciplined all products a expand second building brand we and Garlic connection including openings, the the one, guest to adjusted factors, strong our building several Trueprong strong for generated by We our experiences; and operational to Steak, an delivered of Caramelized Strategy: million EBITDA simple of great by continue great part restaurant two, our quarter

the from quarter. of me highlights this some Let share

During D.C., Jersey, the a Salem, Hampshire X for we restaurants, new New New New Morristown, being in Hampshire; Washington, quarter, us. and opened new second X market Chicago,

of an and weekly openings ramping revenue nicely XXXX that average are cohort the have average. existing to already continue restaurant new outpaces Our fleet

a intimacy-at-scale As prioritize we ago, playbook new which to choosing This estate, investing shared awareness, brand relaunched dividends. the having strategically real best quarters leaders few right we our is openings. the place, paying playbook and in in execute

saw the as we emerging Southeast. and Additionally, strong the such performance top-line Midwest, markets Texas, in

Plaza, some that Our renovation footprint for far We new space brand's X the week. fastest of at retrofit is results the delivered levels was at reopening, The which and to our and retrofit target made the in Kitchen both value throughput time are we Penn have seen costs. contract today's first in compelling with Infinite we we Infinite on white completed by seeing Since extends which the manufacturer, store. of July On is way highest consumers markets. for delivery. fully clearly resonating close ordering backdrop. the continue industry able show online Kitchen and Sweetgreen our partially restaurant complete. keep our to open began weeks get X high-quality New was during X took and of restaurant were The June weeks It relevancy is to X beyond in at with Sweetgreen's now to the current existing offering first XX, York in our City. considerable and

Kitchen XXXX. restaurants total restaurants X as the Infinite the existing of we in X featuring month with a to than open Infinite less as the of performance in are on the track to Kitchen While pleased restaurant. retrofitting remain with new well operation, We X a

XX% with range. XXXX to majority upper and of Looking ahead, of XXXX lower of growth our range at the is the being we the working are are on and XX% end pipeline. resuming targeting The XXXX end and unit our annually beyond of rate a we this identified pipeline new XXXX

has Caramelized in X Garlic sales, the now sizes. at year-over-year. p.m. second guests, at mid-day XX% innovation driving was X new which to driving Dinner in Protein non-weekends This percentage traffic successful attracted and points excluding have and menu daypart. an May, same-store particularly expansion and of X Our dinner check launched quarter. been represents sales Plates Steak, of the

area quarter Part be these the We prioritizing allow include the steadily us our a June, fourth head mix as in seen We've experience weekend reflected on throughput. long-term to bonuses culinary as digits. an operations, driver our saw to grow to sales it increasing our since and fleet well focused for last to guests an These same-store also traffic. and mindset of With by respect increased guest aligned We of ownership us forward. our grew year. progress for coaches. continue culture incentives further of our our of believe Additionally, is focus teams and results and are ] creating double acquired share values. this moving be of quarter. across This grants will the nail our incentives will our [ in remain innovation equity dinner

coaches we've growth building our more a investing Sweetgreen from within, we is employee that are in restaurant over why We been future culinary skills, a path coaches pipeline on hospitality. in performance job. on all believe thrilled the Many proud members. openings This are an promoted for are developed within. are As team including emphasis opportunities learning our best upgrading and we we experience, not from with like head our coming of career leadership of head of just about are skills for that XX% years, focused and and prepare offers solid the a management, and the

a restaurant head stabilized at coaches on to a committed improve is turnover, is Sweetgreen new in reduce week, As We've XX. investing to our goal in X, food we leaders crave-able, to we've being has turned fresh, had been keeping low. move sustainable. that forward, vision Since increase stability which day percentage. concept a this Last because convenient, place by and redefine can fast post-pandemic to creating focused

out restaurants sourcing combined and category to plan the We model, continue lead our work. I for program, our with our farmers partnering team the unique want our how new by this formats, their innovating to to at via thoughtfully hard know and digital define Our Infinite expanding members menu, leader. all will of a future operate we of thank compelling trust, building has introducing commitment Kitchen. suppliers Sweetgreen with value delivering category and scale made to and

X financial past strengthening model years, the positioning our accelerate growth. focused have ourselves Over on been we operations profitable and and to

call the review further to results Now to I Mitch detail. our will in over financial turn

Mitch Reback

Jonathan, you, afternoon, everyone. and Thank good

our to EBITDA. As and reaching with through growth X revenue margin in Jonathan our over just its We consecutive highest in as level and capital quarter shared, achieved hard commitment demonstrated disciplined past XXth XX% same-store our sales restaurant-level several over adjusted to efficient results. flowed of work growth, quarters years. second the quarter This

EBITDA XXXX, year-over-year. $XXX.X quarter track the quarter XX% up annual we For for Total growing to million $XXX.X be from remain of an on was million, adjusted revenue positive the on XXXX, in basis. second

increased For the positive All positively increase and strong Florida, traffic due benefit grew newer is consisted menu at X%. Midwest. Year-to-date, comped running quarter, a by prices growth sales same-store with markets to sales same-store Atlanta, second X% This and mix. year-over-year. led markets, of the and X% from Texas, very a change X% Upper

to quarter restaurant-level is XX.X% was quarter This cohorts. the second Restaurant-level $XX.X increase in second average a margin for XX.X%. of the and Margins margin point the $X.X volume was more quarter improvement year all Our a XXXX. from regions unit ago. a profit strong million, second the in Restaurant-level year-over-year. XX.X% than across second profit were was more profit is XX% compared than age million. XXX-basis Year-to-date, quarter

For restaurants. of including a we Jersey; earnings opened Morristown, quarter restaurants, new a margin reconciliation quarter comparable please the the and second XXX Washington, total D.C.; market of Salem, release. In to We X in a New of us. to restaurants Hampshire, XXXX, New refer with the for GAAP figures, restaurant-level ended Chicago;

service Infinite May $X.X crossed with just and to Our financial, Naperville continue our customer sales. Kitchens X-year in deliver anniversary operational, in million its on metrics.

first in a see quarter, margin stage. second XX.X%. restaurant-level the turnover we was similar restaurant a the member team was what its at year, In For classic less than XX% around

Huntington Our Beach is following months old and [ X IT a ] trajectory. similar

the reliability hour. and Our Penn weeks with XXX has for opened bowls its performance. XX Kitchen shown XXX reach few day, Infinite the second nearly produced bowls strong potential minutes on-time retrofit, to per XXX% Plaza in On has a

order average mentioned, Penn Sweetgreen of Plaza just under the get an Jonathan minutes. to fastest X.X As way completion time offers with

Kitchen. QX to to of open track will restaurants, on XXXX, are X These which XX scheduled was restaurants of and the QX For contain this related the which XX and XXXX, are in improvement XX% opened new quarter, were week we point Food, opened of Infinite expenses Fashion revenue were Island for year-over-year. one Labor between X packaging of and Newport second XXX-basis in costs California. XX% beverage, and quarter, Beach, the in year-over-year. flat of for revenue a be

in a due for as was $XX.X for expenses our in million. restaurants an to in change the our million of balance with for has of decrease of was of wage in million above. an primarily in XXX-basis depreciation as increase experienced a of contingent labor decreases was profit XXXX. general and quarter increase an more million with excludes quarter expense, a prior $X.X in quarter which improvement $XX.X consideration. million net of administrative and XX% in compared our million XXXX as and was cash the $XX.X value decrease expenses is related the fiscal We adjustments, an year-over-year. $XX.X or $X.X year and primarily second in $X.X X% General in of $XX.X partially of with related in expenses the well offset other million a certain partially improvement general $X.X decrease $X.X EBITDA, loss primarily administrative by to quarter the point stock-based decrease Adjusted to optimization. $XXX prior in period. increases, were million advertising. increase associated amortization decrease period. loss in was million year improvements and million a stock-based Occupancy quarter, to and a to in a compared administrative ended offset by and expense, restructuring, in second we of this These XXXX of Net described compensation The preopening, second than a loss rate compensation expenses restaurant-level While second million The the increase offset fair $XX.X and as XX% an the other investment revenue, which increase the decrease to from in were revenue expense million revenue or due

flow During we the X positive cash first a months XXXX, generated million. $XX.X of of operating

turning to guidance. Now

XXXX, For of the economic year, the the the in raise about in backdrop. given second fiscal the cautious U.S. we reading our guidance half of year remain year. the We what first are uncertain strong reflects half for the performance

Additionally, to restaurant-level with XX and EBITDA Chicago. our margins million. new sales Kitchen, XX%, the $XX between high-volume guidance XX% revenue X%, in openings, adjusted Infinite restaurants and X including and X% $XX and reflects same-store retrofitting between to from $XXX restaurant the XX $XXX of million, million million net ranging between Willis growth Tower

chain, accelerate profitability we focused innovation, building brand, before, can the the for to We unique growth shared turn long-term remain so culinary call stakeholders. capital-efficient we are this positioned and driving leveraging With our I'll With to to that Sweetgreen remain we focus, operator supply believe well on we As and disciplined growth excellence. to operational Q&A. start deliver our our the committed delivering back we flywheel. that,

Operator

question now for with of comes Instructions] is [Operator open line the floor Sharon Blair. William questions. Zackfia first Your The from

Sharon Zackfia

I The really between Can obviously and components? and probably quarter nice the stake transaction driver comp sequentially those had uptick Because a a recognize mix you was was mix. X primary impressive benefit. was talk in this what about

want should we uncertainty the the about if mix? really to secondarily, seem you're So is, you're clarify to talking And traffic but anything, I'm versus Mitch, like seeing the when not that case. environment, it attribute in much how just sure then I fact, doesn't macro in

Mitch Reback

Sharon, Thank question. for much, you very the

the apart on buckets of quarter. which traffic was break me any into to about the built. the how question first sequentially If take mix X have and let the it's second kind we one, and comments So

Steak. largely positive benefit Let launch me was that during the quarter, say attributable built traffic The mix just each sequentially for the our quarter. and the was to of month is

I the translate question, quarter to was other the on early a of a what little cautious soft terms seeing second guide? are reported, QX. what of have in are Like week believe, I that first in I'll of Your we bit Xth the And of around we guess people was lot July. the seeing

And we July, away the Xth moved up. of top last at our business guidance. our for from comped of picked of the As our X business weeks the July, end

and feel the showing happy weekly would customer the labor and our happy in in our and out-of-home, to more the with about than very rates Class the menu and and as things we marketing our We're pleased with a We comment And opened really with new our with very of acceptance of growth response XXXX deployment in hospitality and kind past control I higher results. strong We're market of that our we're strong business. to revenue up items. scheduling talked with all more comfortable we've new revenue, we're importantly, the script, that's improving our in very markets as an comp we're moved is think labor order to seeing alluded very happy what overall lower very percent with our we say costs that of I the of the new and we in pleased very improve fleet. innovation strong across and and making seeing the results.

X of kind the that at came environment. Having of the fact as around and However, reads same that, weeks a everybody stuff said end have in the guidance. And of external cautiousness are I we world, reports read and our we of last like July on. paper degree with top the -- control pleased kind in do the the think we we the same feel not July of outside we

Sharon Zackfia

follow-up, in or does it IK Penn, channel on my customers more improved the are seeing the as And happen discover you digital first? via walk-in throughput the

Jonathan Neman

Sharon, you, good hear question. thank and to from for you the

our a Sweetgreen to begin, Sweetgreen single bring So quarter. mission And want moment every -- our thank the I head team I before of just I'd to coaches that work life to day. lot hard just every team A especially to get person, phenomenal members, to this the take just to love for point. our a frontline whole really thank

it's if I under go Penn amazing. food As minutes. mean, you we're Plaza, relates it to I X.X delivering think it, and experience pretty

it to can you If have probably XX to food, There's we've you your you out you you X much before practically as pretty had with that way ordering well now food the as store until minutes. your -- get gone another peak, and XX you're in. concierge then at to weight would for order, the your X once almost so waited walk in about designed order And the minutes. X.X ordering started minutes kiosk in is line

again, which, on phone, -- fast. that your the also it's from orders, if So aside digital that are ordering is you're

great restaurant had really is seeing This from really feedback seeing consumers, positive -- very an Sweetgreen team encouraged. worked important. we new old members, some in key the also from in where our existing an which positive working feedback that We're members now the are is So model. first that some

work lot a how an get It's them. on seeing experience, for place they're an interesting and easier really more we just thrilled. So it's and they view test the fun to

it. And so really excited about

think their potential as fast continue to encouraging. understand get I see can Sweetgreen, it's through some they will but traffic-driving I how think there. over think early And get time, we I and customers

Operator

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

Katherine Griffin

a marketing. Steak a Caramelized It's advertising been the another First, I Sweetgreen on Garlic It's ask seems question, tact for around I seeing guess, successful. to It like been launch. it. return on clearly different wanted you're

thoughts, on thinking So forward? go-forward about I'm reserved something in Just if strategy -- curious launch? big if going I this Sweetgreen you're a any or it's is guess, culinary something for your that's for advertising incorporating or

Jonathan Neman

the Sure. for question. Thank you

We've team. much marketing you our of I'd it's good say to in talent expect around us investments how the So made go can more some forward.

to seeing XXX leverage really it. team done how So out taking campaigns, including out-of-home, job. community, marketing and shout really great some we a Really -- about we're around results thinking great our digital have

our be We've supply this food, we the then think salad a chain, Sweetgreen we that about craft make food. really From idea company in a the as types We've So was -- way. also how unique to many incorporating viewed fresh into our never create and that apply will of to different a around still leverages strategy. go-forward beginning, very people company. it that

so, known and the as around next it we're Of and course, you're starting And is something or what to that going leverage working of over and the innovation. consumer that's fresh place. while, started to to been broadening really crave-able has salads, about that much apply with which brand on seeing, this we food, our is we're then branch more that But daypart. the that menu we've you're out for lot our see quarter, the very seen one a in And of of we've we're excited for. quality, things and license broadening year a

a at we've combination marketing. that had innovation massive comps attribute bit great us. that those for a lot culinary shift dinner in brought growth some of dinner nice the part. consumer was of we've we've actually a the from emerging this that questionable some with day seen lot and I to point So of with and results saw markets one in little the We to a were the approach of markets, seen, huge new a success We a the in of

Katherine Griffin

I menu I'm more menu how you're how thinking forward habitual to Sweetgreen That's to your curious been like And for in resonating balancing cohorts then existing? what it's with innovation going that about And existing executing, customer versus your great. means base? that new appeal order guess innovation has on the

Jonathan Neman

Yes, both. we've seen success across

a look the frequency can and that look where we pleased and -- remove trends, that a about especially at Steak, both vote value, too. I if it, acquisition loving get and I but Garlic existing Caramelized both with I bowl And a greens, many customers If are at how Steak Sweetgreen a our -- in of really dinner option occasion created now that hearty you not and bowl Wild Rice we the brought may can environment. want with really new it's great we've it's in experience. ways guests and in been want this the customer full pretty veto

So I'd in say and seeing customers. it we're both with existing new

Operator

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

Brian Mullan

question a development. on Just

As with year, to might to have Kitchens terms still have is has to determined? of is answer to do you think there or those Or well? locations you're your pipeline? many do yet constructing be the about manufacturing wondering more you yet really way in any that that And how contract look next visibility of Infinite if just as constraints

Jonathan Neman

Sure.

answer percentage we're new include as majority, higher of next yet pipeline. expect disclosing a how say, an a than short XX% Kitchen units Infinite Infinite design, many you in would exactly is of finalizing much Kitchens the year. the not We're more expect, So but I'd

Brian Mullan

the And or give also Kitchen question over longer. the a optionality you continues next the to perception for follow-up, proposition? a talk the you XX do that even with to gives does development? John, And opportunities the about that and does then value the hope, do anything What strategic with just with strategic it years, value consumers company just way X, help you of you Infinite But progress the you. more if

Jonathan Neman

of and becomes of a we a increase, I we TAM be absolutely. designed success. the do we about around we're and of lot applications the with, the labor is should there's things that one well. perspective, saw today, to of white a us and your expensive. margin for fewer as run way it's as optionality, whether team this point, Yes, a there's excited unlock unlocking a for the reason challenging especially have for the of core the were application we from tool and us value more we And so is more it can this mean, lot outside time, bowl reasons we huge over that been it -- And price space that seeing But the this automation us. allows employees believe with innovation it that as lot

take there's job a I just and a we spice option automation thank to project. say incredible done whole team who've an what of leading just And lot I'd the built around to Kitchen. this So Infinite with value the moment want

Operator

of the Your Reich Logan RBC question line from Capital with next comes Markets.

Logan Reich

do solid margin forward. really Steak mix the margins. question But you this on this margins about and year-over-year. out My guys you like I Obviously, expansion on more growth just coming what impressive have Congrats so a results. or And follow-up. into takes quarter quarter guess sort the for? trending? restaurant restaurant-level was that really this are year going I puts of of of Obviously, is how then beyond the looking sort think And sort most are

Jonathan Neman

Logan. Thanks,

me think question Since the term next that the was more in I the over think years. way question broader I phrased. let the few that's answer

a of could opportunity, And course, opportunity coming We be and more success come I few improvements of forward. labor years, to past areas, deployment. our think some we've but near continue continuing the see few to see term, around going is that I going think most and seen labor from in our to great we to There's in occupancy. a expanding lot in margins of see

to the area will as expenses, opportunities continue continue leveraging those. As And find to a you'll the by deep throughout of occupancy was other come we urban small our grow And think us I company, of in area them. drive down. And we heavily P&L some newer and the other steadily our grow influenced basically see of occupancy in markets, areas.

an will this exactly increase. basis. the next very So annual And of I is I not I retrofit should be absent if expansion, our margin we you'll believe, see years. can may the IK. few they a the margins over on years, few the supercharge high-volume on to want The rapidly. But it next basis, deployment believe quarter-by-quarter particularly stores IK, the over improve caution

Logan Reich

Penn retrofit, the that views that the sort on How what going or key there X- period? learnings instruct the I sort does of that views forward? be the assets, Plaza sort of retrofits through whether impact then And guess sales forward X-week are of on going Great. that performance guys' on your your ratio

Jonathan Neman

So is are question, Or trying to we the did what what learn? we learn?

Logan Reich

guess to were I Yes. during that retrofit? expectations what learnings your relative like

Jonathan Neman

Yes. able -- first impressive time. I'd that say that store during were of all, I think operating it we the keep was to

get, So digital of first for we to X we I encouraging week an it But it running for able that were we'll And the X to of you'll that past, perfect. was things each the openings. well just you decision in -- to as us. able from It's improve, we really a very so overall as a should that Tuesday. down think and the testing during the for pickup, with and perfect I've Like week. of lot to sure the And perspective team labor to all said the many to experience. to from good were bring Other continuously and week and that to able that feel, vibe build-out start time, a one this Infinite over pretty still times the costs just in flow a for notice walk keep we We you I in weeks when think close that to accelerate down. on all hospitality down scale will think -- making the for learning bring one I opened cost customer the feeling X and continue adjacencies trying right the with we're our and trying right that perspective, training running a do as I new start new the think about look We turn from feel We're as one, in on you the significantly we the down. each weeks. the be delivery while experience X Kitchen. working ordering, continue made see, time store with that and and member learnings, we're restaurant that to really team really focus we we look to technology, nailed

confidence this see we'll year. retros. for given this year, X So I'd results us. today. belt, the and new a open year, more our and thus We're builds with focus about both we've it's more far, which very But say results area learning has pleased a what under huge us a learned we're with that ton, accelerate is confidence going wouldn't open -- bunch continue lot if the next we we're to to have And X to didn't seeing And a more. the we I'm

Operator

of JPMorgan. with line the from Rahul comes question next Krotthapalli Your

Rahul Krotthapalli

results excellent on and Congrats execution.

into as regional share early How or to bills out your today back TAM? as you I your menu over And time, have about some an you follow-up. price? build you of margins truly being reinvesting a some of of your this or philosophy realize expands Sweetgreen can thoughts thinking from national you organization into customer As the are

Jonathan Neman

Sure.

the question, So Rahul. thanks for

last in a in seeing planted the emerging restaurants Atlanta, in depth me, grew point, for quarters been lot momentum So growth, that a of and we've of lot all we the really the I -- momentum markets -- of to that Midwest, and one, company, seen encouraging one year of has your the breadth one we're lot of the of in things sales think seen the the the markets Texas, Florida past the where across most over couple specifically, we've we upper the growth. a robust

our get we We're nationally. a of we're whether as margin that's that in they're drive awareness. we do consumers activities still people a think more and sticky. once there's the marketing more a XXX There lot success get aware of I over years I XXX because to a with is trying as it natural national, a Sweetgreen, lot Sweetgreen are of that to of And of think able one mean, lot the seeing that, habitual people think try to food. advertise have nature thing very unlock that brand know is scale, away continue number, get we a time, to in marketing efficiencies once think our a couple scale, or different given does I in from and built opportunity units I but we flywheel we

just try. to just and get do a are got people more we we who that us Something to give is know

Rahul Krotthapalli

And longer Perfect. on build expect at Kitchen, then any all? term, Kitchens Infinite to the discussed in past considering without labor would savings the the you stores we Infinite

Jonathan Neman

I you the So question any without would that build heard Rahul? is I stores The question I Infinite that Kitchen? way answer being, correct, an think --

Rahul Krotthapalli

Yes.

Jonathan Neman

Yes.

the we're our So to and lot, learning to the be in do we're Kitchen. an return future place I'd would At all a feature capital stores this Infinite trying very we're get meet moment, to where sure say make a vision we -- still threshold.

labor it So where more or you'll higher a throughput challenges see seeing you're is needs prioritize. have or have from stores put perspective higher into volume more maybe us that

Rahul Krotthapalli

think the restaurants. ability the the around all over to as it the Infinite down in bring we not and of time, entire But unlock really cost overall Kitchen, eventually the most but costs build, be automation, I just the build-out will

Operator

Your next line with question comes Citi. of the Tower from Jon

Jon Tower

just Maybe the and Kitchen other after. a in Infinite bit little one more

Obviously, had that lower? manufacturer. the contract you now the about little to a timing? you machine, on to give the the moved of seeing you Are can itself, roughly a us maybe begin retrofit you've to on machine bend Just the bit you think mentioned gave $XXX,XXX of originally, I $XXX range us for due on to And cost you itself. that store? a And retrofit the specifically cost talked the

Mitch Reback

costs say, Jon, guidance These with coming me gave. the in that just rolling of right early off. are are the let kind that in we line machines are

fact, Penn unit first think was the contract at I the In Plaza manufacturer. made

come anticipate road. means manufacturing, would the of have any So to type we of by scale some no we in obtained down that

we I the have the you There out In CapEx give numbers individual at of store cost. same we time really of what want done the number get terms course, Penn, cost the when to store-by-store basis. of on remodeling the total have But available. other were, an don't is

Jon Tower

just think then there earlier, their consumers curious, as with into a about forming consumer. some pivoting price, how X% you are do pinched backdrop you're I'm alluded if model. on year, this you're Mitch, some softness a that And inflation the guys bit seeing spend? pricing. more to you where XXXX is across And seemingly But the know I we're kind given to maybe in about of little of just running the pricing

Mitch Reback

that of month comment Jon, yes, just point to did we roll the in have off. a price July, make first, X let me

from pretty running currently the XXXX -- a We at watching closely. we're slightly a at vantage X more the level, outside to haven't point and today, about taking So can a people in pricing our but finalize world guidance, take we like certainly years, of we're or the maybe points that we I view of this price. in really cautious certainly in of than of past begun say lot have kind view couple our reflected

Operator

comes Your & of the Bittner next Co. with line question Oppenheimer Brian from

Brian Bittner

the in restaurant be driven that demonstrating leverage it's margins on relative to margins, you're labor. restaurant continuing to the On upside by significant expectations,

that strategic moving this Is restaurant the to that strong a there to forward, of quarter item, strengthening on despite same-store you this there And is As can forward? you quarter moving you about Mitch, is may execute us some line very this optimistic going the help relates as be expense there some result comp? what's line secondly operating item and with the deleverage it understand that, factors sales? just other keep other

Jonathan Neman

Yes.

for So we're talk labor some that me about the things seeing. of let

had a the past stable, we by environment of working in are We're So we Steak also addition head promoted for teams. stay a yes, best beyond greatest, the And But of seen lot retention reflects best focused And of and great that the -- there. results. sales. that and improvements the obviously, positive developments coaches over head really we've and their from that, on of some with and finding They improving that create the a believe very, us leverage coaches and also having teams, the seeing developing within. been the year we're lot with our there. we've very

it has at has stabilized continued our So turnover Lowe's. --

head to XX-year can We continue that stability we're our continue to see on coach's growth. our very in we exciting drive coach's working that. think things grow head And some

things on Beyond labor think continuing and help that throughput, leverage that, can peaks just around line. making not we we're labor hospitality working of terms on the some that deployment staffing us we're to also sure properly, in but

to have leverage in things restaurant-level some So margins. the and -- on all labor to works to our drive exciting real I drive say, some continue we think

Mitch Reback

second Brian, expenses. And other the question, of was I part on the your I'll think which take

and The result things HVAC, in as across business not of channel really of other up the and the country. heated shifts have other what the unlike maintenance, particularly expenses higher repair around a have people reported level largely were mix

Brian Bittner

think about it's of important brand in And the the maybe company. is of remains than the I are my And question, the this be guess stages should very Kitchen. in obviously the ultimately, that that's future prototype areas learnings said store scaling front portability that on just how the of an of Infinite Surprise, this because vast to yes, units, Jonathan, you're more Infinite confidence you prototype the the XXX every But is more us. And the to more math originally question But to says majority thought? in I I understand is true. even gain you of is, this and here. surprise. to work know and still thing long-term these basically of this obviously a early And you more starting follow-up can the an trade important only Kitchen. of just behind prototype open thinking portability we're

Jonathan Neman

is think I'd And see the yes. you'll start say And this short Absolutely. you year. answer that to

the very already Infinite neighborhoods. intentionally Kitchen. with deployments of in environments and the unique So We've piloted very

heavily more So just whether Island week in then Breville fast-paced this Penn a Huntington urban, Beach Fashion environment suburban. it being and be and Plaza,

market, You'll we Infinite store help an market markets, to new the it's the less a open about pushing with year what portability. in for it, more again, on believe And urban is, we perfecting lot it's about and more the how perfect other really of really right markets, experience suburban that broadening to in the beyond technology, sure going open -- think broadening do get the a more including of learn us see the first overall a try this we're waiting us the and -- I Kitchen. we menu We'll salads. the with in experience, to make we're brand position open

quarters. and Kitchen that's to format going with excited to what continue perspective that. coming of success can to we really from to leverage consumers broaden how we're about more expect place where But Infinite to share Sweetgreen in stake the So the us to and power push a needs

Operator

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

Andrew Charles

sales obviously outsized are service number. you've on the from then for the the quarter, got from for first just could first, industry. a speed new within what between the rank the I'm buzz picked historically track if if it off, you that X% of traffic? substantially just And the drivers traffic? you disclose second, just But I'm grew operations. can positive around know mix I rarity Mitch, and the we tailwinds combined first help streamline can positive you the But what that positive year, contributions in second now couple of improvements a said skip of store -- quarter. ramps the right curious was more up was in It's Steak,

the positive in you how that what help rank do So traffic was of quarter? order drivers

Jonathan Neman

you, Andrew. Thank

very me think that base comping kind cylinders, Let I positive. our have into say, in the of high a seem that everything hit that we I as second to it The quarter. at you -- all fired on level, that say came stores were very,

positive it that as I I had really grew just the growth of menu And I broadly of really coalesce traffic very question said the the And and course, a very throughput. received well well was picked think very was was strong call, comp had traffic. things of -- and and quarter, received. it happy we're the strong these sequentially kind up very throughout all that markets a our earlier new deployment And something on that labor Our traffic. think The just on with.

Andrew Charles

those of And improvement then are you efforts resonating? peak just quantify this? us you there? How Is service enhancements. peak around to see hour that And what are us labor you better did seeing a question deployment, Can driving transactions minutes? help per follow-up how is of labor help it XX monitoring what you're or speed kind understand

Jonathan Neman

higher overall share I'd as expect and we labor that. -- bit on better it's we through back throughput scheduling. do Andrew, little see as a at too leverage peak come to early. well more to like But would

fleet, better You work see et overtime, around management fair things like less cetera.

restaurant We've there's do make both we simplifying talked a their and team make easier in head can across to be do, through easier the in-store lot how whether really and done So to We've more a micro a things a that of do, single better from this of The lot the way -- our changes -- benefits every -- how at I'd deploying continue systems, I to make say it of little adjacencies. could a we be see members, tasks the role continue think tasks we inches, job joyful layout about like lot we similarly just that coach tools, around like level, be of past game and that it's they for and job -- in all optimize or restaurant, administrative look everything day. and upstreaming, is we labor. whether new business that that's bit to also work. the

next years. a continue to see, Mitch the steady leverage to margin earlier, we mentioned our as few path So over

Operator

Goldman line the Christine comes next Sachs. Your from question Cho with of

Hyun Jin Cho

off, congrats on First great a quarter.

quarters of AUV the X million the kind of help under really us since of X% $X.X in of same-store you versus could year. bridge last the solid growth of between second Firstly, last flattish kind a averaging sales gap quarter kind

store new of at imagine the But is actually mix, basis. I the look bit some you from would think coming I on store if it's this a a new coming year-over-year down dynamics.

of the in factors help need AUV And would I'll the see then be us question. that it are That's terms what increasing also you to again? do And you first So follow-up. great driving a if can that? understand

Jonathan Neman

you, Christine. Thank

over dynamics $X.X about just just remained trailing You're It's XXXX, It's has the been and same-store million. sales half XX in AUVs the a up X X% articulated. and right, in it take base. X% the bringing you one is underneath really degree months. some is at just quarter about the rounding comping It's that first new it, of One grown factors. one our And to $X.X mindful we that second stores we million, into in of every store a fact is are it. as we're build more the the of there

Hyun Jin Cho

there increasingly largely you products kind Is of look think opportunity John, in you're untapped something And near specific a can And heard forward this for are that about? whether I highlight marketing of the thinking as any to Sweetgreen. attachments or initiatives we future? I kind

Jonathan Neman

includes we that how because don't want we we road attachments, we're and to from kind think everything, like announce map, quite have of do should around occasion treat of we there's whether signature industry as how about to opportunity look beverage a where near I dish, do tackle perspective, which culinary beverage, think too much but we our share if the robust you we not ready and a well. the that a Absolutely. side business, some very be index not both at

that and innovation robust see testing have core next So format beverage nice across and learning expect mentioned, bowl piloting outside you and within also, kind but the all a things to things we're some going exciting of really and core of around that country lot of on, treat. there, the we of year, the both -- kind entree size of from innovation as

Operator

Gager line Your Dennis the comes of from UBS. next question with

next the UBS. with comes from of Geiger Your line Dennis question

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

Brian Harbour

for in you Would Mitch. XQ one, inflation citing quick mind and food us? A wage

Mitch Reback

and were are Yes. in -- saw in Thanks, was really by wages the very inflation digits. the we COGS Wages in both very second of single Brian, level low What quarter. way. low

Brian Harbour

year? is that about markets. you How of your out Curious existing I market. New your pipeline of of strong gate? one open a How into one you it of call Are new done Hampshire. periphery Salem, is you of on kind your finding the core the much know of of easier It's of kind New kind sort England? as of expansion sort scale given some and this of it that units your peripheral those of year think in about of to some markets towns next

Jonathan Neman

very asked. success glad if today, national actually intentionally at Yes. markets. build brand strong at wanted as we of you we actually how of you that I'm category core when as seeing we're metros in major this a And most lot It's look think point. And about to something a really we a to out in expand we're set Sweetgreen leader. out,

if very And -- look these you really got at places. so we a went But cities. you're lot them, all out and we a major you planted of flags of -- you're these lot in across not just dense

run. if sub-XX All to room and it's you the there's Texas, we Midwest, brand much have so And of new, just look at restaurants.

and So of we the our a as happen of tackling supply lot chain, of more see there a food of markets. And forward, we'll costs, opportunity we benefits the leverage actually regionally. densifying around our adjacent look markets of scale is existing economies a the see lot huge

kind and eyeballs we And within and of robust restaurant business leaders. marketing places in to from Hampshire. Obviously, an markets bench the we'll Boston lot spend knows opening in overlapping leverage management So and markets leverage also to a is get of easier really able some anyone like perspective. a existing our New see there. operations of be lot between those a the leverage build We'll

flags in and we markets of places. these where and expanding So out see into we lot see these as look you'll all forward, back we finding markets new markets. other in going going first, deep hard and think we a more And did of that the fewer just kind room some in existing part ways, adjacent

excited do in quite for it's profitable and think actually we way. I'm our So and can a we really accelerate disciplined and footprint so this how way,

Operator

comes And Dennis with your line question of from UBS. last Geiger the

Dennis Geiger

me? hear you Can

Jonathan Neman

you. hear can We

Dennis Geiger

questions. terrific. Great, team. to Two Congrats quick the

solid similar. be like as relates one, helpful first something, to to non-IK, probably the get there. number the versus margin cutting to Naperville the seeing somewhat it I The IK It assume, sounds

it's of of in add we get sort in margin the last ballpark that there? to you'd of wanted to more sort on spread if how of the that quarter, Just kind if what anything frame a saw there's up sense

Jonathan Neman

ballpark would certainly visit can I all say and modeling we what Dennis. of than or our Thanks, line, some largely in cost coming IK with store we've past, see an slightly obviously, is seen when of better which goods. benefits in additional the thought out the labor and you you of it the in

the with early So results. very pleased

Dennis Geiger

go it Appreciate I have that quarter then on your unit volumes a relates IK And stores of kind throughput. at know it's kiosks, juncture just days, about this thinking one, AUV? non-IK kind thoughts of second thinking now to the belt, just Any where another AUV average on a you early as on under from views but early that to an about that. potential could latest

Jonathan Neman

stores, the Yes. I'd continue suburban on say we -- the on X original pilots.

We seeing serving to and Penn I in this now. periods? understand think will more traffic early Fashion definitely now an continue the But of be customers. where AUV. But well. is start in and Can with peak drive have into us just high-traffic see The but in urban can So this help we are believe to experience long hit ways, opportunity off have for Naperville that now more drive store it's more We I'd those common time. expect, to we capture of when say restaurants will continue see better customers those accurate, a to the comps better lines better locations, to test real experience We that say encouraged, to to should by numbers. with it's similar environments we do pretty some that's in we're when customers an heavily very to first just having, start And do is based with a do Plaza, experience we on see Island get lift opportunity, some we're in AUV comp go locations. think pretty trends store these year to as we really we're ticket. a the that first higher time going more high-traffic

Operator

for call. today's concludes you today's and Q&A session Thank conference This attending.

may You now disconnect.

Sweetgreen (SG) 8 Aug 242024 Q2 Earnings call transcript