Shares in Sweetgreen Inc. went up following the release of its first-quarter financial results in which it narrowed its net loss and increased revenue.
The West Adams healthy food restaurant chain saw its stock price jump by 34% from the close on May 9 of $23.56 to the close the following day of $31.56. The 21.4 million shares traded on May 10 represents a 52-week high in trading volume, outpacing the previous high number of 10 million reached in early March.
Earlier this month the company reported a net loss of $26 million (-23 cents a share) for the quarter ending March 31, a narrowing of the net loss of $33.7 million (-30 cents) from the same period in the previous year. Revenue increased by 26% from the first quarter of the prior year to $158 million.
The company attributed the spike in revenue to a jump in incremental revenue associated with 41 net new restaurant openings during or subsequent to the first quarter of last year.
On May 20, the stock reached its 52-week high closing price of $33.83.
The share price closed at $30.94 on May 23.
Eyeing long-term growth
Jonathan Neman, co-founder and chief executive of the company, said he was pleased with the quarterly results.
“We remain confident that our strategy positions Sweetgreen for success today as well as for long-term, capital efficient, profitable growth,” Neman said in a statement. “At the heart of our strategy and our business is our team members. I want to take a moment to extend my gratitude to each of them for their unrelenting drive to further our mission of connecting people to real food.”
Neman said in a conference call with analysts that the positive results are evidence that the investments the company is making in its people, its operations and financial model are the right ones.
“I’m very proud of what our team has accomplished together. You see their accomplishments in the financial results today and also in the experience in our restaurants through their exceptional hospitality and high-quality food we serve,” Neman said.
“Looking ahead, we have a massive opportunity to bring real food to more communities and disrupt the industry with the rollout of the Infinite Kitchen,” he added. ‘We are building a durable business and shaping a healthier future for the next generation.”
The Infinite Kitchen is the automated service that Sweetgreen began over a year ago with a store in Naperville, Illinois. It also has an automated kitchen in Huntington Beach.
Mitch Reback, the chief financial officer of Sweetgreen, said during the conference call that the company is committed to innovation and the deployment of the Infinite Kitchen.
“These initiatives, together with our focus on running great restaurants are poised to drive traffic, create better customer and team member experiences as well as unlocking long-term value for our shareholders,” Reback said.
This year, the company is planning to open approximately seven new Infinite Kitchen restaurants as well as retrofit three or four large urban restaurants with the automated equipment, Neman said.
“Our first retrofit will be in New York City this summer,” he added. “(Next year), we plan to deploy an increasing number of new restaurants powered by the Infinite Kitchen.”
