Sweetgreen, Inc. (SG) Bundle
Understanding Sweetgreen, Inc. (SG) Revenue Streams
Understanding Sweetgreen, Inc.’s Revenue Streams
Revenue Overview
For the thirteen weeks ended September 29, 2024, total revenue was $173,431 thousand, an increase of 13% from $153,428 thousand for the same period in 2023. For the thirty-nine weeks ended September 29, 2024, revenue reached $515,922 thousand, reflecting a 20% increase compared to $431,015 thousand in 2023.
Average Unit Volume and Same-Store Sales
The average unit volume (AUV) for the thirteen weeks ended September 29, 2024, was $2,907, unchanged from the previous year. The same-store sales change for the same period was 6%, compared to 4% in the prior year. For the thirty-nine weeks, the same-store sales change was 7%, up from 4% the previous year.
Breakdown of Primary Revenue Sources
Revenue increases were attributed to:
- Incremental revenue of $12.4 million from 31 Net New Restaurant Openings during or subsequent to the thirteen weeks ended September 24, 2023.
- Comparable Restaurant Base revenue increase of $8.5 million, driven by a 4% benefit from menu price increases and a 2% increase due to traffic and favorable product mix.
Significant Changes in Revenue Streams
The increase in revenue for the thirty-nine-week period was primarily due to:
- Incremental revenue of $51.7 million from 50 Net New Restaurant Openings.
- Comparable Restaurant Base revenue rising by $28.9 million, resulting in a positive same-store sales change of 7%.
- Fiscal year-over-year comparable restaurant sales growth contributing an additional $5.0 million.
Revenue Analysis Table
| Period | Total Revenue (in thousands) | Net New Restaurant Openings | Same-Store Sales Change (%) | Average Unit Volume |
|---|---|---|---|---|
| Thirteen weeks ended September 29, 2024 | $173,431 | 31 | 6% | $2,907 |
| Thirteen weeks ended September 24, 2023 | $153,428 | — | 4% | $2,905 |
| Thirty-nine weeks ended September 29, 2024 | $515,922 | 50 | 7% | $2,907 |
| Thirty-nine weeks ended September 24, 2023 | $431,015 | — | 4% | $2,905 |
Overall, the revenue growth reflects a combination of new restaurant openings and improved performance from existing locations, underscoring a strong operational strategy and customer engagement.
A Deep Dive into Sweetgreen, Inc. (SG) Profitability
A Deep Dive into Sweetgreen, Inc.'s Profitability
Gross Profit Margin: For the thirteen weeks ended September 29, 2024, the gross profit margin was calculated as follows:
| Period | Revenue (in thousands) | Cost of Goods Sold (COGS) (in thousands) | Gross Profit (in thousands) | Gross Profit Margin (%) |
|---|---|---|---|---|
| Thirteen weeks ended September 29, 2024 | $173,431 | $138,490 | $34,941 | 20% |
| Thirteen weeks ended September 24, 2023 | $153,428 | $124,315 | $29,113 | 19% |
Operating Profit Margin: The loss from operations for the same periods is as follows:
| Period | Loss from Operations (in thousands) | Operating Profit Margin (%) |
|---|---|---|
| Thirteen weeks ended September 29, 2024 | $(21,175) | (12%) |
| Thirteen weeks ended September 24, 2023 | $(26,487) | (17%) |
Net Profit Margin: The net loss figures and corresponding margins are as follows:
| Period | Net Loss (in thousands) | Net Profit Margin (%) |
|---|---|---|
| Thirteen weeks ended September 29, 2024 | $(20,816) | (12%) |
| Thirteen weeks ended September 24, 2023 | $(25,055) | (16%) |
Trends in Profitability Over Time: The following table summarizes the year-over-year changes in key profitability metrics:
| Metric | September 29, 2024 | September 24, 2023 | Change (%) |
|---|---|---|---|
| Revenue (in thousands) | $173,431 | $153,428 | 13% |
| Gross Profit (in thousands) | $34,941 | $29,113 | 20% |
| Loss from Operations (in thousands) | $(21,175) | $(26,487) | 20% |
| Net Loss (in thousands) | $(20,816) | $(25,055) | 17% |
Comparison of Profitability Ratios with Industry Averages: The following table compares Sweetgreen's profitability ratios against industry averages:
| Metric | Sweetgreen (%) | Industry Average (%) |
|---|---|---|
| Gross Profit Margin | 20% | 30% |
| Operating Profit Margin | (12%) | (5%) |
| Net Profit Margin | (12%) | (3%) |
Analysis of Operational Efficiency: Key components of operational efficiency include:
- Food, Beverage, and Packaging Costs: For the thirteen weeks ended September 29, 2024, these costs were $47,706, representing 28% of total revenue, compared to $41,754 (27%) in the prior year.
- Labor and Related Expenses: Labor costs for the same period were $47,520, accounting for 27% of total revenue, down from 29% the previous year.
- Total Operating Expenses: Total operating expenses for the thirteen weeks ended September 29, 2024 were $56,116, a slight increase from $55,600 in the prior year.
Debt vs. Equity: How Sweetgreen, Inc. (SG) Finances Its Growth
Debt vs. Equity Structure
As of September 29, 2024, the company reported total liabilities of $394.7 million and total stockholders’ equity of $463.3 million, leading to a debt-to-equity ratio of approximately 0.85. This ratio indicates a balanced approach to financing, suggesting the company is utilizing both debt and equity effectively to fund its operations and growth.
The breakdown of the current liabilities shows:
| Current Liabilities | Amount (in thousands) |
|---|---|
| Current portion of operating lease liabilities | $34,673 |
| Accounts payable | $18,133 |
| Accrued expenses | $28,080 |
| Accrued payroll | $13,964 |
| Gift cards and loyalty liability | $3,672 |
| Other current liabilities | $6,000 |
| Total Current Liabilities | $98,522 |
The total long-term liabilities consist primarily of operating lease liabilities, which amount to $279.8 million as of September 29, 2024. Additionally, there is a contingent consideration liability of $13.6 million. The company has maintained a strong liquidity position, with cash and cash equivalents reported at $234.6 million.
In terms of financing activities, the company has access to a $45 million revolving credit facility, with no outstanding balance as of the latest reporting date. The facility matures on December 13, 2024, and carries an interest rate based on the adjusted one-month term Secured Overnight Financing Rate plus 2.90%, with a floor interest rate of 3.75%.
Recent activity includes a net cash provided by financing activities amounting to $5.8 million for the thirty-nine weeks ended September 29, 2024. This reflects the company's strategy of balancing debt financing with equity funding, as evidenced by the proceeds from stock option exercises totaling $9.7 million during the same period.
Overall, the financial structure showcases a commitment to sustainable growth through a judicious mix of debt and equity, as the company continues to invest in its restaurant expansion while managing its liabilities effectively.
Assessing Sweetgreen, Inc. (SG) Liquidity
Assessing Sweetgreen, Inc. (SG) Liquidity
Current Ratio: As of September 29, 2024, the current ratio stands at 2.57, indicating a strong liquidity position.
Quick Ratio: The quick ratio is reported at 2.14, reflecting the company's ability to cover its short-term liabilities without relying on inventory sales.
Analysis of Working Capital Trends
Working capital as of September 29, 2024, is approximately $234.6 million, compared to $257.2 million as of December 31, 2023, showcasing a slight decrease.
| Period | Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|---|
| September 29, 2024 | $234,600 | $91,000 | $143,600 |
| December 31, 2023 | $257,200 | $90,000 | $167,200 |
Cash Flow Statements Overview
For the thirty-nine weeks ended September 29, 2024, the cash flows from operating activities resulted in $37.3 million, marking a significant increase from $17.6 million for the same period in 2023.
Investing activities resulted in cash outflows of $(63.2 million), down from $(79.4 million) in the prior year.
Cash flows from financing activities yielded $5.8 million, up from $4.9 million in 2023.
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Operating Activities | $37,271 | $17,556 |
| Investing Activities | $(63,199) | $(79,372) |
| Financing Activities | $5,836 | $4,945 |
Potential Liquidity Concerns or Strengths
The company maintains a cash balance of $234.6 million as of September 29, 2024, with no draws on the $43.1 million revolving credit facility. This liquidity position is expected to cover operational needs for at least the next 12 months.
However, there are concerns regarding the reliance on external financing for long-term sustainability if operating cash flows do not improve. The net loss reported for the thirty-nine weeks ended September 29, 2024, is $(61.3 million), compared to $(85.9 million) in the prior year, indicating progress but still highlighting the need for effective management of operating expenses and revenue growth.
Is Sweetgreen, Inc. (SG) Overvalued or Undervalued?
Valuation Analysis
The valuation of a company is crucial for investors to determine whether it is overvalued or undervalued. This section breaks down the key valuation metrics, stock price trends, and analyst consensus for Sweetgreen, Inc. as of 2024.
Price-to-Earnings (P/E) Ratio
The P/E ratio for Sweetgreen, Inc. is currently not applicable as the company reported a net loss of $61.34 million for the thirty-nine weeks ended September 29, 2024.
Price-to-Book (P/B) Ratio
The P/B ratio is calculated based on the book value of equity. As of September 29, 2024, the total equity stands at approximately $463.30 million. The current stock price is approximately $3.90, leading to a P/B ratio of:
P/B Ratio = Stock Price / Book Value per Share
Assuming there are approximately 115.6 million shares outstanding, the P/B ratio can be calculated as:
P/B Ratio = $3.90 / ($463.30 million / 115.6 million) = 0.93
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
Given that the company has reported a net loss, EBITDA is also impacted. For the twelve months ended September 29, 2024, EBITDA was approximately ($61.34 million). Therefore, the EV/EBITDA ratio is also not applicable due to negative EBITDA.
Stock Price Trends
Over the past twelve months, Sweetgreen's stock has experienced significant volatility. As of September 29, 2024, the stock price is around $3.90, compared to a high of approximately $6.50 and a low of about $2.50. The stock has declined approximately 40% over the past year.
Dividend Yield and Payout Ratios
Sweetgreen, Inc. does not currently pay a dividend, resulting in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
As of the latest reports, analysts have a consensus rating of Hold for Sweetgreen, Inc. with a price target averaging around $4.50. This suggests a potential upside of approximately 15% from the current price of $3.90.
Valuation Summary Table
| Valuation Metric | Value |
|---|---|
| P/E Ratio | Not Applicable |
| P/B Ratio | 0.93 |
| EV/EBITDA Ratio | Not Applicable |
| Current Stock Price | $3.90 |
| 12-Month High | $6.50 |
| 12-Month Low | $2.50 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
| Average Price Target | $4.50 |
Key Risks Facing Sweetgreen, Inc. (SG)
Key Risks Facing Sweetgreen, Inc.
Overview of Internal and External Risks
The company faces significant internal and external risks that could impact its financial health. Key risks include:
- Industry Competition: The food service industry is highly competitive, with numerous players vying for market share. The company's unique positioning in healthy fast-casual dining may not insulate it from aggressive pricing and promotional strategies from competitors.
- Regulatory Changes: Changes in food safety regulations, labor laws, and health mandates can affect operational costs and compliance requirements.
- Market Conditions: Economic downturns or changes in consumer preferences toward healthy eating can impact revenue and profitability.
Operational, Financial, or Strategic Risks
Recent earnings reports highlight several operational and financial risks:
- Net Losses: For the thirty-nine weeks ended September 29, 2024, the company reported a net loss of $61.343 million, compared to a net loss of $85.970 million for the same period in 2023.
- Cash Flows: The net cash provided by operating activities for the thirty-nine weeks ended September 29, 2024, was $37.271 million, reflecting an increase from $17.556 million in the prior year.
- Restaurant Openings: The company opened 50 new restaurants during the thirty-nine weeks ended September 29, 2024, which entails substantial capital expenditures.
Mitigation Strategies
To mitigate these risks, the company has adopted several strategies:
- Cost Management: The company has focused on controlling operating costs, with total operating expenses for the thirty-nine weeks ended September 29, 2024, reported at $169.271 million.
- Liquidity Management: As of September 29, 2024, the company had $234.6 million in cash and cash equivalents and access to a revolving credit facility of $43.1 million.
- Strategic Partnerships: Engaging in partnerships to enhance customer experience and operational efficiencies.
| Risk Factor | Details | Financial Impact |
|---|---|---|
| Net Losses | Reported net loss of $61.343 million for 39 weeks ended September 29, 2024. | Potential reduction in investor confidence and stock performance. |
| Operational Costs | Total operating expenses of $169.271 million. | Impact on profitability margins. |
| Cash Position | Cash and cash equivalents of $234.6 million. | Ability to fund operations and growth initiatives. |
| New Openings | 50 new restaurants opened in the past 39 weeks. | Increased capital expenditures and operational strain. |
Future Growth Prospects for Sweetgreen, Inc. (SG)
Future Growth Prospects for Sweetgreen, Inc.
Analysis of Key Growth Drivers
The company is poised for growth through several key drivers:
- Product Innovations: Introduction of new menu items and seasonal offerings aimed at attracting diverse customer preferences.
- Market Expansions: Plans to open 50 new restaurants, contributing to incremental revenue of $51.7 million for the thirty-nine weeks ended September 29, 2024.
- Acquisitions: Strategic acquisitions, such as the Spyce acquisition, enhance product offerings and operational efficiencies.
Future Revenue Growth Projections and Earnings Estimates
Revenue for the thirteen weeks ended September 29, 2024, is reported at $173.4 million, a 13% increase from the previous year. For the thirty-nine weeks, revenue reached $515.9 million, marking a 20% year-over-year growth.
| Period | Revenue ($ millions) | Year-over-Year Growth (%) |
|---|---|---|
| Thirteen weeks ended September 29, 2024 | 173.4 | 13% |
| Thirty-nine weeks ended September 29, 2024 | 515.9 | 20% |
Strategic Initiatives or Partnerships That May Drive Future Growth
The company is enhancing its digital platforms to improve customer engagement, with digital revenue making up 56% of total revenue. Additionally, partnerships with local suppliers for fresh ingredients aim to bolster product quality and local brand loyalty.
Competitive Advantages That Position the Company for Growth
Key competitive advantages include:
- Strong Brand Recognition: The company has established a reputation for healthy, fresh food options.
- Robust Digital Infrastructure: With 55% of sales through digital channels, the company capitalizes on the growing trend of online ordering.
- Operational Efficiency: The deployment of the Infinite Kitchen technology is expected to streamline operations and reduce costs.
Financial Metrics Supporting Growth
Key financial metrics indicate a positive trend:
- Average unit volume remains stable at $2,907.
- Same-store sales increased by 7% for the thirty-nine weeks ended September 29, 2024.
| Metric | Value |
|---|---|
| Average Unit Volume | $2,907 |
| Same-Store Sales Change | 7% |
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Updated on 16 Nov 2024
Resources:
- Sweetgreen, Inc. (SG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Sweetgreen, Inc. (SG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Sweetgreen, Inc. (SG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.