Shares of Sweetgreen Inc. SG -11.34% rose 19% in extended-hours trading after the salad chain reported better-than-expected results and outlook, boosted by higher prices and workers increasingly returning to the office.
The company, which went public in November, reported revenue for the quarter was $96.4 million, up from $59.2 million a year earlier. Analysts expected sales of $84.7 million.
Sales are improving in Sweetgreen’s urban stores, particularly in Midtown Manhattan, the company said. Co-founder and Chief Executive Officer Jonathan Neman said in a call with analysts that offices calling workers back in should help the salad chain’s business.
Same-store sales, which measures sales at stores opened at least 13 months, rose 36%. Analysts were expecting the metric at 17.8%. The rise was driven mostly by an increase in transactions. Higher prices also helped same-store sales in the quarter.
Sweetgreen raised prices by 6% earlier this year as it seeks to pay for rising wages and other costs and food, including avocados.
“We do feel like we have a lot of pricing power,” finance chief Mitch Reback said. The company could raise prices further later this year if inflation continues, he said.
It also eliminated a restaurant loyalty program to try to help improve profit margins, testing a narrower subscription service instead.
Mr. Reback said in prepared remarks that the results for the quarter, which ended Dec. 26, “demonstrate continued recovery from the pandemic.”
The Omicron variant of the coronavirus hurt sales, staffing and operating hours early in the current quarter, though the business improved by mid-February, executives said.
For the current year, Sweetgreen said it expects revenue to range from $515 million to $535 million. Analysts were expecting $513 million. Guidance for the current quarter was also ahead of expectations.
Shares in after-hours trading were priced at $25.45.
Sweetgreen went public in November with shares priced at $28. The stock soared as high as $56.20 but now is trading under its IPO price. Shares closed Thursday at $21.35, down 11.3% for the day and down 33% so far this year.
The company remained unprofitable. For the fourth quarter, it reported a net loss of $66.2 million, compared with a loss of $41.1 million a year earlier.
On a per share basis, the loss was $1.14. Analysts polled by FactSet were expecting a loss of 66 cents a share.
The company reported restaurant-level profit margin of 13% in the quarter. The profit margin was 16% in 2019, according to securities filings.
General and administrative costs were $46.6 million, compared with $27 million a year earlier. The company attributed the 73% increase largely to expenses tied to stock-based compensation and costs associated with becoming a publicly traded company.
Sweetgreen is trying to simplify its hiring process as it seeks to recruit more workers. The chain scaled down job categories in its restaurants to four from 25, helping with labor scheduling as it expands, the company said.
The company said it hopes to open at least 35 new restaurants this year. Mr. Neman said construction delays and supply-chain problems have weighed on the chain’s new openings, as many restaurants have reported. Sweetgreen is getting better terms from developers as it expands nationally, helping it grow, Mr. Neman said.
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