SG - Earnings call transcript Q3 2024

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Operator

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

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

Rebecca Nounou

afternoon, good and you, everyone. Thank

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

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

website. can release be earnings Our our found investor on

call to And turn to kick now the things off. I'll over Jonathan

Jonathan Neman

you, great on At Infinite fast and a and guest quality with innovation technology, never intersect been the relentless that's way a culinary a to real and cutting-edge industry. standard, our Kitchen, a our we're food through food committed to convenience focus transform in redefining new Thank afternoon, to across experience technology. Sweetgreen, accessibility food We're seen good ingredients, and setting both innovation everyone. Rebecca, in

Kitchen late million, the production sales Infinite reported opening $XXX.X we representing year-over-year align them quarter, of restaurants, third to with third opened in the intentionally growth. XX% For X schedule. of quarter our We X

third X% today, past X which from X emerging quarter digits. menu and markets Same-store expanding with company's quarter in Midwest, level X.X positive another were margin X%. led was Texas points the XXX our of the the of X% strong price opened double quarter basis third We to comping with Infinite marking XX, Kitchens. for a the consisted quarter Restaurant the in of This by compared And Southeast, over grew traffic sales year, and all benefit mix. the was third Growth by last and weeks. in operate history. began we XX.X%, as

and restaurant at came EBITDA of $X.X quarter. level million the result adjusted profit expansion a G&A for discipline, As in

some expansion products one, Let me Carolina, and operational Beach, deepen and highlight we our third new Ohio; delivering to Connecticut, achievements of the excellence. Beach, Jersey; by connection powered by Montvale and Westport, the quarter our and exceptional Kitchen, experiences; strategy our Infinite in Columbus, against Charlotte, through restaurants guest our X strategic opened twofold guests North brand strengthen to: X Among Charlotte. Montvale, are New Newport California; and two, Newport

North the best some us, weeks history. area our Our the short company's markets Uptown in X of of Charlotte, new had for Columbus openings in and opening

successful and is market year. launches Successful follow These physical category-defining significant current these strong greater footprint the our new for has at like reach concept. conviction opening our our space Seattle's openings that than significantly that of the brand our white there beginning further

to excited are Officer. added Chris dynamic in to team. as we pipeline, leader have August our development Development the joined Chief strong accelerate to late continue our a we As and Tarrant

brands. record estate proven industry of and a nearly real strategies decades of development with experience for global brings the critical Chris in X track executing restaurant spearheading

for pipeline been to We working have growth. Chris with accelerate our

expect least nearly the to This which of approximately to kitchens. new XX For infinite have of fleet. infinite the will end of half XXXX, XXXX, restaurants, we open kitchens we triple fiscal that be by at number year in means expect our

quality enabling experience. faster a Our food higher Infinite are guest the by transforming kitchens experience and

We speed, Plaza and and optimize surveys retrofit site opened attribute and not Kitchen in the mid-July. only this freshness guest reflected at in consistency. to management prepared Infinite fastest safety. is Kitchen's to our quality. climate X Penn receive flavor, improvements designed advanced their making the for temperature systems maintains Guest City. to Guests control Kitchen product Infinite in precise consistent New way integrating and items, restaurant, can food By Penn orders sweetener This needed the the first now texture Infinite quality within food ingredients in York but to Plaza minutes, ideal ensure the get conditions

guests Half since frequently visiting reported renovation. more of Kitchen the Infinite surveyed

of lower focus the than and expressed members average. experience the and preparing true opened elevating passions, environment. the September Infinite work our hospitality. both is month class a team have creating In turnover efficiency engaging Plaza exceptional for class Penn to of Kitchen allows providing food, September, that the the fleet full at Kitchens of on more culinary Additionally, them of restaurants their Infinite meaningfully for was new This

Penn our in an industry-leading in from still presence. While is Kitchen, learning the class sales digital revamped higher early with a frequency. days, financial accelerate across savings. Plaza native we We including Plaza has been in kitchens, labor with all basis launching noticeable XXXX, digital initial XXX believe achieving can Penn points the program Infinite loyalty metrics Infinite our our and increase see together also of ticket

Renovations We be the Street quarter. end fourth are the in currently Wall Chicago retrofitting Infinite Tower in complete New Willis with Kitchen. of York will the and by

that experience the are connected digitally needs today's consumer. We a meets delivering of reimagined

technology culinary in to leader Sweetgreen positions innovation excellence a commitment dual as food Our fast the and space.

been actively innovation traditionally perception as and salad are varieties. destination, have shifting known with we we Although menu this a protein new lunch

is of menu guests with attracting Our expanded craveable chef-crafted resonating ones. new current offerings and

in fall plates, we of the our harvest other release Following Caramelized and Garlic Steak menu mid-September. protein introduced

Inspired Brussel and menu for during with featuring sauce. maple weekends Caramelized show dinner mix. check Char fried flavors, and house-made Sprouts, Maple a are averages compared items Together, holding to weekday by than air higher Both a and Glaze strong driving dinner these are glazed weekends sales we with XX% which are lunch. seasonal ingredients dinner

that to fresh, our sourcing high are without seed of This cooked we're and includes oils. free and prioritizing salad, artificial additives ingredients committed we and expand optimize beyond As organic our standards. menu seasonal

also grow opportunities attachment our significant We see upside to rate.

better We drinks desserts you. size, delicious continue both for and are to introduce and that

broader beverages In we as Angeles, are Los Ripple as fries. well testing

fries served Ripple ketchup avocado fried sauce. are Our oil with pickle and garlic Ale and air with

on reinforcing the on ethos check relevancy our and term. build operational complexity To laser-focused enable our reducing long focused chain traffic and are and innovation, We are menu to culinary restaurants. over supply culinary in we

which quarter, we roll During next markets, broccoli plan De-Stem tested to fleet-wide Kale select the year. simplified prep and our in out we

in to also oven are cooking updating the the cooked while ingredients. improving of optimize We our capacity consistency of process recipes

can guest throughput. some speeding up reducing shift and complexity, our focus team we of members' prioritizing the By back-of-house experience into

see matters, continue a wait for also believe and on but business only times drive efficiencies, accuracy, order and the remains experience. operational detail a we progress seconds to focus to enhance every to not we While of sense, it us. In Sweetgreen

scheduling As improve experience, AI-driven part out labor continuously member commitment rolling team the we're of an our system. to

With teams of demand. can our coaching take focus in learning harnessing this coaches and tool, reducing aligning the results team on machine head guests, driving their members needs load, an with administrative through schedules time guest restaurants. more ownership and while app, our with better By staffing all spending can

an anticipate our pilot success. to feel X supported members set having expanded environment create and valued, we XX is where We week, to this -- markets. team across up our goal Just restaurants for

XX-day key coach stability metrics team member head improvements such sequential across We people retention. are and seeing as

not we job, just investing We leaders a believe a offering in within. and from in our career, are promoting

head In culinary enter can addition and as a members full the we offer training team And leadership coach to years, life spans a become few skills, X package, cycle. that equity X-figure including employee as Sweetgreen.

are we new excited of part restaurant are our creating. about As accelerating the roles footprint, we leadership of number

strength. Since on our taste, We system the and food remain freshness, fast a to our approach our focus and our beginning, positive vision redefine change unique convenience to and the in through committed elevating has been sourcing brand, food create sustainability. culinary

efficiencies will model continue our to financial to our both innovation guests. deploy We drive experiences for enhancing teams technology and while in

hard positioning commitment believe category work sustain to enable their growth, and the another to I'd team to for quarter. dedication expand and thank We like lead years to for will come. solid us our for this substantial us

in Now the turn who will the over call Mitch, detail. take financials more through I'll you to

Mitch Reback

Thank everyone. you, Jonathan, and good afternoon,

price period. and increases growth the sales third the consisted double-digit which led is positive emerging Southeast. quarter traffic Midwest, focus menu redefining and Strong performance against and growth revenue in has for expanded a the same-store from led the fast X% growing grew $XXX.X sales the benefit growth was prior across X%. top a X% quarter same-store sales Total Texas margins. and X% million, the Same-store from was year-over-year. the quarter million and profit the commitment XXXX, line culinary restaurant-level technology-enabled of for future to of innovation Our food up a mix. through of includes to third on by Year-to-date, $XXX.X XX% year markets, This

the in million. third volume was unit quarter $X.X average Our

the opened with X total of During we quarter, restaurants. a quarter ending third restaurants XXX the

As more restaurants basis expansion. margin for of to seventh our a today, marks of quarter XX% a margin new XXXX. quarter total Restaurant-level in the we've margin opened the XX.X% consecutive year This than fourth third profit a This X of in was point XX year-over-year quarter compared year-to-date. restaurant-level restaurants a the third ago. quarter of is improvement XXX from

restaurant-level XX% $XX.X the quarter increase is a profit for was margin profit Year-to-date million, year-over-year. XX.X%. Restaurant-level third

for and Labor a release. refer For third year-over-year. basis remaining quarter, point the costs. quarter, GAAP expenses margin beverage relatively with with figures, prior reconciliation of for XX% of XXX revenue please restaurant-level related improvement packaging revenue were the a earnings to year and than protein of costs unfavorable comparable slightly to period more were XX% the the consistent Food,

the revenue, This increases. X% related This improvement labor improvement year offset more rate Occupancy is below prior of revenue period. prevailing in to were than slightly expenses higher and primarily due optimization. and wage

For million and of revenue the the was of prior to XX% expense stock-based a in year a on $XX.X as expenses million due $XX.X partially $X.X third dollar million primarily a XX% to the of compared was revenue compensation compared administrative in center decrease was loss by This for increase XXXX, general increase administrative quarter $XX.X spend, $XX the or year million offset prior and Net basis to in general loss as period. period. expense. a in or quarter in slight million of support

by million net increase level stock-based increase million compensation, and EBITDA, and partially which in our increase to the from profit amortization a and certain due was for an offset a primarily $X.X increase $X.X an of third restaurants Adjusted as with loss was improvement an expense, third million $X.X as quarter depreciation adjustments, improvement expenses. $X.X in compensation other in This and associated primarily in stock-based a decrease the in in well million general excludes administrative XXXX. quarter, restaurant

$X million adjusted our demonstrate this a EBITDA $XX.X last focus time million versus of on Our profitability. to continues loss year year-to-date

available cash We over generated $XX of flow had million we At $XX of an XXXX, period quarter, end balance $XXX the the operating last cash of same of first the during increase a million year. positive million. months X the of

we raising million. net our $XXX between For $XXX year-to-date. same-store million, the guidance XX.X% are million new ranging EBITDA fiscal adjusted margin growth to XXXX, XX X% X% year revenue between restaurant sales restaurant to XX% openings, to $XX strong level million XX from $XX reflect performance and and between to

the with X retrofitting reflects Infinite York City. Street the in Wall guidance and Willis Our in Kitchen, restaurants Tower high-volume New Chicago of

a As a reminder, XX-week a was XXXX XX-week whereas period. is XXXX period,

priorities. XXXX, incredibly head and strategic to in place As the and foundation leaders build out we year right execute the into to strong an our we have on close

road year have high foreseeable confidence of per future. XX% We growth unit the our to in for map XX%

will XXXX new which by XX unit new of powered consist at of Infinite the approximately restaurants, pipeline be half Kitchen. least Our will

the and strength our emerging of across country. IK growth openings, kitchens the as accelerate such and and our in financial of the markets. to model by XX X/X same-store are our unit new the operating Midwest, Southeast deployment growth the and is in confidence double-digit Texas of Our XXXX sales today which Infinite markets validated running superior

the the flywheel. through X demonstrated of quarters of effects powerful Our Sweetgreen performance the first XXXX has

combined with strong our focus operations menu drive innovation, continues great category-defining to financial technology performance. Our on brand, relentless and

perception the next are broaden Sweetgreen year. We excited to salads open and are to communities in more beyond of continuing

I'll to the the With turn Q&A. that, call operator to back start

Operator

[Operator comes question Instructions] from Your Krotthapalli. Rahul first

Rahul Krotthapalli

of think brand appeal be growth Can a the and focus don't need income wider cohorts? the be as organic mean evolve on national? you person traffic the salad different to brand you to broadening you do you Sweetgreen person how demographic a I discuss awareness in a about to becomes of context and TAM a Sweetgreen as

Jonathan Neman

Rahul, thanks for question. the

ago, it's Protein a dinner, drive transactions. us lot some driving well. in here. more over-indexing helping philosophy done of core sets high-quality with expansion. our markets. broadening us terms of few about Steak, you focused in the terms craft as something consumer, a food Caramelized from this followed idea we've special salads So appeal unique which well creating while. year us TAM what up mentioned, of launched both food perspective, -- been on We And we how way Started a begun where months we apart prepare but is Really, our really as It's helping Plates. They've we've really has About broadening well, done is exactly as ago Garlic for a see really our emerging sourcing We in of as is do check is we our some of to experiences. Sweetgreen thoughtful our the again restaurants. think our our almost in offering, with places really the and a

So working innovation very, a menu very that on. have we robust we're platform

of things going our through that process. lot stage a are gate With

we one something markets today is in it, air is sides Southern thing -- size, RippleFries. They're the they're absolutely call around delicious. mentioned see beverage dessert. a we California opportunity, thing One we So fried, we're testing script things oil-free, seed and our the in call outside and bowl big like

on And year. sometime we're that's now that expect long next so go working the well, things roll to as continue out to test as

opportunity timing, there's have also we dessert a sandwich on think in a us category. call, think that few We working handheld, And that the a we wrap again, about we which, to have which talked other in real plays kind a on, are big like opportunity. also of we something no the last promise the things but things is

fast we resonate philosophy we say of So this I'll disrupt And our food things. and customers as our to to how lot we've seen want we other a of apply take food. make

So things you that to we those give want you want.

as a things indulgence. and eating permissible think do kind like to it fries like way we used of a You're about that in in Sweetgreen way a

I X. a think this out excited and in next and and operations the very culinary for lot the to we're it. proud of year company going I'm So the has innovation, driving they're or to license of teams do I'm come how

Rahul Krotthapalli

in-store Previously, points XX amazing. is sliced like prep. and productivity That's sound De-stemming Perfect. have a to was I well. also notice discussed be the the attributed versus that follow-up shredded food kale, to improvements very along it's on being carrot. it coming labor to the around easy of

we these time, And about the over avenues? productivity about opportunity to labor other As with gains menu, how IK we along much think reinvesting do there how among reduce into solutions cost? store, price, is dollars hours think or the

Jonathan Neman

Sure.

elevating around So going we're restaurants prep on quality been we've for to journey simplifying our and do the while, in while continue to this so. a

at De-Stem making the space and We're bringing of the of we push So that do to can going innovation. continuing ways you this create of dressings why we've some like to consistency to done. prep is tools look for our things mentioned restaurants. on like things in Part continue also to we some things easier more Kale where other and find upstream in

we as run the more So we add it to easier have to our restaurants. to to want make menu,

And some company. gains captured will productivity be by those of the

making hold get our how the menu But to restaurants, quality, how members it. can a that we're get really food on our how and through easier team for from do going -- how all our chain we is and cook And very good for to relentless food we about our that look lot -- supply create and of make at -- our and we operate sure promise. about be the if our broaden portion we know to it, better say talked the we team how focus bigger. to piece that's that our to we the place. all our hard we're taken I room something a we think And improving on it customers have is a our a quality deliver And we've last we as do core food in we

on improvement to we on expect iterative the and drive how able we benefits again, the those bottom the an prep, how some So are line. quality of -- to both

Operator

from comes question Jon with next Our Tower Citigroup.

Jon Tower

in to fourth to think could hate throughout you I myopically a looking to And maybe the had trends top I'm new do of when that channels I how and the idea quarter on last over can thoughts can then spoke more curious to approach you terms you some any think to the comes and speak but call, up but what it performed separate build have you testing drive brand communicate allocate a to focused, get we're of marketing. how around And where to you guys traffic question, quarter, it, consistent date open sales. in And time same-store awareness? to dollars of consumer? mediums new you are new which marketing

Mitch Reback

September was our me let the in were the where the quarter saw X%. quarter to a September the in of X% that within the quarter. into on sales take growth momentum October. revised guide we carried we're had and the But X% of month What certainly of comping first the third market. upward sales strongest question. patterns -- of half Jon, the same-store

think, was Second on part, I marketing. the

Jonathan Neman

you, Jon. Thank Thanks Yes. question. for the

we're marketing, So as marketing to approach. it evolve continuing relates to our

our perspective marketing It lot densification a densify of at creates also it of we drive speaks marketing. get Sweetgreen, of leverage strategy while can We leverage markets, level. One is how we done more to try to we've of that the lot more know that people G&A There allocating because frequency. once goals and is local a as a we our marketing brand to awareness. continue the create is lot set from to dollars out a and

of to approach funnel full social a lot combination played digital, our big of as part community. has and approach, a shifted this marketing be We influencer out-of-home, year really a

focused we're is how One that is of to big have things a of this on piece direct a be customers. more very puzzle. the going Loyalty do relationship with we our of

well other year, bringing of continually has large we'll marketing. be and very for next that And mean And will our community we us. half lot program, be that first So a I loyalty our introducing to a testing community we lever. we're think that marketing -- new talked loyalty in worked experiential things.

continue going to So to we're down double there.

We're resonate real feel they and when really seeing Sweetgreen in life. customers communities

think so with a emerging those of our effects with well you lot in as comps big see NRO And I markets as the performance. our

at cost of the year, If more been AUV for than you look this they've strong. our is that NROs average The fleet. class the existing phenomenally --

really we're we've can we going very So to so of that, think at that, approach, continue about, on excited opened, to on. build we're new build about the you we and some as continue to markets we that look that feel marketing and good especially

Operator

next Cowen. Charles Our from TD with question Andrew comes

Andrew Charles

wanted Great. and Kitchens with how decision for Infinite Plaza year. I recognizing for ask this mean, with retrofits though, Penn the I your curious, summer in about big to now this informs have a this pipeline hopper. Curious you're the retrofits. very X I'm early opening for XXXX, next

Mitch Reback

Penn in first let was say, you're mid-July. me It retrofit. Andrew, opened right. our

we the in When concentrated the and look things whole from the of and a satisfaction that with at AUVs perspective how the a sales and very not are So store the IK, the quarter. for it X about period level. We're we're a stores was would very, place customer Penn, team think of member say acceptance happy we take time. labor I particularly both seeing savings retrofits with a at from results open third

more the it's towards lunch if throughput. a IK time, it really tight us faster So for an lends

term. challenging it IK can we people, have IKs say, look markets, is greater we at with fewer I into The lot labor believe a would factor other the more we and really, And for benefits runs labor markets. the us if get long challenged will

Andrew Charles

a Okay. my segue good Mitch, follow-up. just

curious more points is for if levels there's which the higher the well staffing potential business Plaza And stores [ as basis number districts wages that the what the said I'm the given retrofit move you these of average. the line XX at past. to higher we've ] up in with labor put just system room retrofit You in higher savings Penn as as versus in

Mitch Reback

room over we there probably more time. Yes, think is

I store. other opened but out, we bit that will, generally think overstaffed a will training have the it to a up period the point suspect store a the believe look, as be I efficiently. go new and -- an in I'd for beginning store if operate labor better Andrew, we that dynamics just of thing, NRO And how similar we'll IK We and little you like kind and learn period. an get to We fast. ramp it more have a

over see So probably long run, I think the you'll that.

Operator

UBS. Geiger Dennis Our question next with comes from

Dennis Geiger

of that to Great. Appreciate thoughts IK. few about think additional around AUVs some you just check, stores on latest might based those to relative AUVs another what as more the Any on us color even a share to level? kind on on stores frequency what throughput at high on at told of non-IK if share results, a on on I mean ask update any quarter of to wanted you've open the benefits.

Mitch Reback

IK time higher going faster of let in. just customer Dennis, store. an to reasons, volume we that's an including expect IK satisfaction happen an and for We grow IK over the will that put in think say, throughput in after a store combination me the we

the now in of the for for of open the some quarter. month range What are that's at I been York October Penn the seeing Penn, full IK year. are Naperville open We only City. the seeing did as certainly faster end Naperville. even was is we grow New is store not for out, that of a said, at we should point

seeing. happy we're pretty what we're with So

Operator

comes Harbour Stanley. with Our Morgan next from Brian question

Brian Harbour

next year? that? the year-over-year kind driver do labor kind much labor? that of that favorability the optimization Like main for of get how what is next the And can in the Just about, you of think steps you of are talked you

Mitch Reback

changes scheduling the optimization of is coach made the on in labor head a deployment think and I result line. we've yes, Brian,

in tools that are business. room from script, the think, Jon and I forward, over optimize several it, considerable we talked Looking perspective both about, the have a scheduling into the some deployment the perspective of next years still a AI labor that bringing we his store. in scheduling in We to think

Brian Harbour

comment and the rates the what food will third were And looking kind you in be of view what labor on forward. you inflation quarter? have if those a could Mitch, on

Mitch Reback

They point actually ran approximately it, pretty X%, in have this see we others at as and time. reported, tame

Operator

comes Katherine Our Griffin next question from with Bank of America.

Katherine Griffin

of First, about I X that another decision maybe an about just investment on to becomes labor thinking for because understand that seem different there the tool not like optimization. in incremental you're are another of need of would wanted in question ask AI the needs how sort margin invest I'm want into to XXX that as part a reinvesting that of justify me may larger kind context to it different the walls, labor of IK labor fleet points labor. the in I to savings. the curious be could basis that

that's first And then follow-up. a have one. I So the

Mitch Reback

your of So break me kind let question. apart

point the all, the And IK of labor -- at in in this labor, XXX still component cost element time XXX you're stores. is highest about use IK, running still the less you're the but through have the stores First about right, labor, labor a savings correct points industry. in the they points,

an an store labor lot efficiencies without for optimize has So still a with store. IK having or an of business to us tool IK help the AI

to the on asked, margin of the really commented people we the savings haven't it near Many will fair the where have being deployed. see IK say it's from I to company. think drop margin We term,

Jonathan Neman

workforce We're out. rolling save It's help although build us could this help that new if on to just we're us tool there. excited on it that. not meant just Katherine, very I about management will labor,

I experience help lot team members. our think us the both for our it it of that improve customers and is around a can

to have It cool labor modern. what So in their the other more allows do match times at also better member curves to our swapping of And a shift to team restaurants. as and restaurants. us much preferred well it's it is our and allows the of we schedule our in that IK sales it lot as shift like both features has restaurants just classic us

loving our much us capturing demand it. throughput helping better way, hopefully So driving staff again, members to also, team appropriately. are in It's peak a and

Katherine Griffin

what just complexity. How menu talked you opportunities these And about of attach. looking for things and the kind with do then Great. expanding to the trade-off about earlier new think ask for operational between you and I wanted other adding to menu the

Jonathan Neman

have. Thank top to concern. simplifications and have order we stage why And optimizations to gating things. you do And of question. for the It's make that the spoke we some to I a these for that's in speaks process that to room the also

be worth and that So anything we a is we operating to is and sure within it items fit our the about we make new lot really drives and new frequency. And how that we then have of work do how going those drive broader thinking simplify acquisition the work consumer have, how really do model.

of testing and we lot to it's right, art of So philosophy this science. have get and a it

the that think ideas way to just gives of really us kind need modular and fits we've with restaurants explore delicious, relevant, we we've then but things. a them operationalize way set culturally up a that to are given we brand our in model. license the of our some lot need of and that way craveable a new So And in these very I built

Operator

Reich Logan from Capital Markets. with comes RBC question next Our

Logan Reich

same-store the in on sales just the couple quarter. a had trend I

sort second on the Northeast you Seaboard. the comps and what traffic in the comps in and of can you to So just in double-digit is Eastern were the share question of newer more guys some wondering mature if alluded markets. was mix. I And markets then

Within this how that the you share was driven much quarter, by can steak? of X% mix

Mitch Reback

total, quarter. as for by said very, like same-store that company the really We're in the everything very don't that fair comp emerging in to markets happy throughout the to Let earlier, pretty say me sales, consistently. tell we the break market. we you, X% comping the with around a quarter. out digits built And averaged It's are double

historically mix, out We X% broken is total of traffic the the have the and components but not positive.

Operator

All right.

go question. the think I we'll to next

from Blair. Zackfia comes question Next with Sharon William

Sharon Zackfia

one catch-up. to pickle cannot wait for try I

if of but retrofits. what be forward? or I bring size, likely I know about that any run So for any ask that them I that the how it's day the me. small be to average cost might want a wanted on done for I you -- you've kind a X thought mean, look downtime to now. Is will process Chicago, is there the sample you to know of there average is as to on happy

Mitch Reback

a one -- done quarter-to-date and modification. year-to-date, slight just that's Plaza. the Penn so Sharon, far We've

retros amount take We we is as dependent. pretty of Willis much and really going X on, around being X retros have Wall be are But standard our what time I Tower store is The now, that right think using the X to weeks. worked currently to kind Street. of

Sharon Zackfia

the profit the because pricing of well percentage. terms to curious a I on in And you COGS were Okay. question was think in steak, the one, that I protect on mix on but penny as impact was good

line? much you this kind So full that of when we look could being impacted first think COGS of at steak, help us the the about COGS how the with quarter

Mitch Reback

menu the but I steak slight will, the upward and COGS significant. than business, the you has in other elements just say a on total, overly of nothing COGS would if the the in higher pressure, in kind

Operator

Sandler. from Our with Brian next Mullan question Piper comes

Brian Mullan

Infinite on question a Kitchen. Just

start the units would which manufacturer? look that you how in cost about beyond or perhaps be down? us And deploy purchasing year that would it the Or then contract in scale -- you you to thinking from Sweetgreen would that your of as and beyond, the would to longer? drive cost take XXXX XXXX, be a For do want 'XX, in

Jonathan Neman

question. the for Thanks

$XXX,XXX we've in So to yes, guided cost to Kitchens. incremental for about $XXX,XXX Infinite

expecting entering We are to X We manufacturing. as opportunities to maturity scale scale We're Phase and see start time some that we savings there's in with to bring We're think over manufacturing. down. of continue kind Phase both of of to II manufacturing. that some just

heavily We focused. are

that's about Kitchen bring Infinite total overall see is Chris cost IK, down including of as right priorities opportunities is to all area units, key that we the to going really becomes new care on and what work build we for -- including and focus core be pretty a costs, the the big And build-out of us prototype. development most it's what cost. One the for team some to the is overall now. major the the

Brian Mullan

And the and Penn AUVs more so to Have has the uplift margin far. understand just store or to average prior the the run to to thus benefits I'm throughput have the or back revenue the trying grow been the just weekly clarify side far seen if an then of if financial isolated the retrofit, comments. some the Plaza far? location wanted rate at of to deployment I sales helped that so you the

Mitch Reback

rapidly seen and store the have seen the grow, store we over we've grow No, months. more the

Operator

question with next comes Our Brian Bittner from Oppenheimer.

Brian Bittner

about talked think and and that in October versus Just on trends insights, all business? you your do macro the dynamic? in there what general, Or Do broader September of just believe couple is you months. going data something follow-up. stronger behind you have specific prior And in it's on a I based sweetly is the the sales your

Mitch Reback

to a markets. Brian, the period hard But moves the further think Coast away accelerated of very it's time. always of from East is and narrow we in some what summer exactly we on particularly it as the saw I sales same-store got really what know

Jonathan Neman

room the year, from And bringing. make of we've add the that new of is seasonal items to thing this for away in been menu only I'll we intentionally our to some some moved order menu

lot We more I least driver we for good Brussels do us, referred our bring at really to. back beginning have been forward. Sprouts, now to returned a on Bowl we with plan has which That campaign, bringing and lot as seasonal that Harvest of to a a look items

So really getting locked. that marketing menu playbook

Brian Bittner

picture And Great. a question. just bigger

pressure targets given that unit of go were? upwards you economics to want journey growth us keeping going be thinking mix where the next you IPO? some at they relative As how Or mean targets expectations to talked units? and just those do us about reaccelerate kind unit new I least you potentially Infinite and maybe want on original is about about your you the to of talked at year you there IK being into on the this beyond, Kitchen, half do

Mitch Reback

Brian. you, Thank

will $X.X I classic modeling, think the just way Jon than would the in say in the improvement approximately be a of I think for IK roughly costs spoke higher in I a model store. the Sweetgreen that And the million clearly the is build-out have margin that number clearly about. basis you XXX point

benefits. second it's think the order I to model hard in

but point. I at put We number on confident this and of very it's challenging seeing them we're think to them them, a more are

Operator

comes Our final with Christine Sachs. question today Cho for Goldman from

Hyun Jin Cho

clarification. So first a

seventh of the a basis great expansion, I points reasons tad was So mention wanted specific it's very year check but as the quarter. unit you any real usual your mentioned takes the did think it's it see and And delivery the IT double kind in years. of you versus improvement. cadence But question, ahead? I Can in quarterly another early, I you some that. lighter could whether that? margin think talk this timing, level consecutive driving is additions we the think, there puts discuss restaurant like And the about to prior XXX about but of quarter to you seems the quarter was on of

Mitch Reback

that so Christine, how we were pace modeled in of new them at me openings actually let with had and the number. say right store line the the

expectations. anything as anticipated. in business come we're the change And the quarter with any were did in significant late in dynamics there's line in with it. actually we our they in that's the happy don't that of So or pretty We think any way they

we certainly but at margin out earnings prepared are XXXX, on XXXX, that on of in our next will guidance in probably terms to we -- next In in this not projections doing be our really, looking give the stage, call.

Operator

All right. Thank call. That all concludes you for today's joining.

You may all disconnect.

Sweetgreen (SG) 7 Nov 242024 Q3 Earnings call transcript