Operations

Sweetgreen cutting corporate staff, still committed to growth

Provided

August 11, 2022

In an effort to save about $4 million, Sweetgreen reported this week that it is cutting corporate staff by 5% (20 people) and moving its Los Angeles-based support center to a smaller office space next to its existing location.

Co-Founder and CEO Jonathan Neman, however, said on a Tuesday earnings call that the 170-unit company was still planning to hit 1,000 units by decade's end fueled by rolling out desserts, beverages, hearty food and kids meals. A loyalty program is also coming in 2023.

"Thanks to our team's execution, second-quarter revenue grew 45% year-over-year and restaurant level margins increased to 18.5%," he said in a company press release about Q2, of which the chain's adjusted EBITDA reached a negative $7.4 million compared to a negative $13.8 million to last year's period. Operations losses were up to $42.2 million, however, compared to $24.2 million the previous year's quarter.

"The team remains laser focused on operational discipline and our path to profitability," Neman said. "We will continue to invest in our key strategic initiatives to drive long-term growth and are committed to being a positive force on the food system while creating a sustainable and durable brand and business loved by customers."

CFO Mitch Reback said he was pleased with the Q2 performance.

"From a profitability standpoint, we delivered above our expectations," he said in the release. "Restaurant-level margin and Adjusted EBITDA on both a year over year basis and since Q1 '22 saw meaningful improvements. However, we began to see softness in revenue around Memorial Day and are therefore lowering our 2022 guidance. We will continue to manage corporate overhead and efficiently run our restaurants as we work towards profitability."

For the rest of the year, the chain expects: