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Sweetgreen (SG) Q4 Earnings Miss Estimates, Revenues Top
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Sweetgreen, Inc. (SG - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis.
In the fiscal fourth quarter, Sweetgreen reported positive outcomes stemming from menu innovation, supply chain advancements and cutting-edge technology integration. Also, it reported increased throughput, enhanced order accuracy, consistent portioning and a notable reduction in team member turnover from its Infinite Kitchen. The company plans to prioritize initiatives aimed at increasing traffic to drive positive same-store sales growth. The strategy encompasses accelerating culinary innovation, refining the rewards program, optimizing throughput, ensuring excellent restaurant operations and increasing advertising expenditure.
Following the results, the company’s shares gained 13.8% during the after-hour trading session on Feb 29.
Delving Deeper
In the fiscal fourth quarter, Sweetgreen recorded an adjusted loss per share of 24 cents, wider than the Zacks Consensus Estimate of a loss of 23 cents. The company reported an adjusted loss per share of 44 cents in the prior-year quarter.
Sweetgreen, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $153 million beat the consensus mark of $151 million. The top line increased 29.1% year over year. The upside was primarily driven by new restaurant openings (during or subsequent to the fourth quarter of fiscal 2022 through the end of the fourth quarter of fiscal 2023) and an increase in Same-Store Sales (6% year over year). Same-store sales growth mainly comprised a 5% boost from menu price adjustments and a 1% rise in traffic/mix.
Operating Results
The restaurant-level profit margin was 16% in the fiscal fourth quarter (compared with 11% reported in the prior-year quarter). The upside was primarily driven by menu price increases, labor optimization and improvements in supply chain sourcing.
During the fiscal fourth quarter, labor and related expenses increased 17.4% year over year to $44.8 million. Other operating costs during the quarter declined 24.1% year over year to $25.9 million.
General and administrative expenses during the quarter came in at $35.5 million compared with $43.5 million reported in the prior year quarter. The downside was caused by a decline in stock-based compensation expenses ($6.4 million), research and prototyping costs and travel and related costs. However, this was partially offset by an increase in management salaries and benefits.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) during the fiscal fourth quarter amounted to $(1.8) million compared with $(17.9) million reported in the prior-year quarter.
Other Financial Information
As of Dec 31, 2023, Sweetgreen had cash and cash equivalents of $257.2 million compared with $331.6 million as of Dec 25, 2022.
Fiscal 2023 Highlights
Total revenues in the fiscal 2023 amounted to $584 million compared with $470.1 million in fiscal 2022.
Adjusted EBITDA in the fiscal 2023 came in at $(2.8) million compared with $(49.9) million reported in fiscal 2022.
In the fiscal 2023, the adjusted loss per share came in at $1.01 compared with $1.73 reported in the previous year.
2024 Guidance
For the first quarter of fiscal 2024, the company expects total revenues in the range of $150 million to $154 million. The company anticipates that the same-store sales change will be approximately 3%. Restaurant-Level Profit Margin is projected in the range of 16-17%. The company expects adjusted EBITDA in the fiscal first quarter to be between $(4) million to $(2) million. For the first quarter of fiscal year 2024, the company expects to open 5 to 6 new restaurants.
For fiscal 2024, the company expects total revenues in the range of $655 million to $670 million. The company anticipates same-store sales change to be between 3-5%. Restaurant-Level Profit Margin is projected in the range of 18-19.5%. The company expects adjusted EBITDA to be between $8 million and $15 million. For fiscal 2024, the company expects to open 23-27 new restaurants.
McDonald's Corporation (MCD - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, MCD reported adjusted EPS of $2.95, outpacing the Zacks Consensus Estimate of $2.81. Adjusted earnings increased 11% from the prior-year quarter’s figure. Quarterly net revenues of $6.4 billion missed the consensus mark of $6.5 billion. The top line rose 8% year over year. The upside was backed by menu price increases, effective marketing campaigns and continued digital and delivery growth.
Yum China Holdings, Inc. (YUMC - Free Report) reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, YUMC reported adjusted EPS of 25 cents, beating the Zacks Consensus Estimate of 13 cents. The bottom line surged 92.3% from 13 cents reported a year ago. Quarterly revenues of $2.5 billion outpaced the consensus mark of $2.4 billion. The top line rose 19.4% on a year-over-year basis. Excluding foreign currency translation, revenues increased 21% year over year. The upside can be attributed to net new unit contribution (12%) and same-store sales growth (4%).
Brinker International, Inc. (EAT - Free Report) reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. Effective marketing and pricing strategies backed the upside. Sequential improvements in guest traffic bode well.
During the quarter, EAT reported adjusted EPS of 99 cents, surpassing the Zacks Consensus Estimate of a loss of $1.47. The company reported an adjusted EPS of 76 cents per share in the prior-year quarter. Quarterly revenues of $1.07 billion missed the Zacks Consensus Estimate of $1.08 billion. The top line increased 5.4% on a year-over-year basis. EAT gained from Chili's solid performance.
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Sweetgreen (SG) Q4 Earnings Miss Estimates, Revenues Top
Sweetgreen, Inc. (SG - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis.
In the fiscal fourth quarter, Sweetgreen reported positive outcomes stemming from menu innovation, supply chain advancements and cutting-edge technology integration. Also, it reported increased throughput, enhanced order accuracy, consistent portioning and a notable reduction in team member turnover from its Infinite Kitchen. The company plans to prioritize initiatives aimed at increasing traffic to drive positive same-store sales growth. The strategy encompasses accelerating culinary innovation, refining the rewards program, optimizing throughput, ensuring excellent restaurant operations and increasing advertising expenditure.
Following the results, the company’s shares gained 13.8% during the after-hour trading session on Feb 29.
Delving Deeper
In the fiscal fourth quarter, Sweetgreen recorded an adjusted loss per share of 24 cents, wider than the Zacks Consensus Estimate of a loss of 23 cents. The company reported an adjusted loss per share of 44 cents in the prior-year quarter.
Sweetgreen, Inc. Price, Consensus and EPS Surprise
Sweetgreen, Inc. price-consensus-eps-surprise-chart | Sweetgreen, Inc. Quote
Quarterly revenues of $153 million beat the consensus mark of $151 million. The top line increased 29.1% year over year. The upside was primarily driven by new restaurant openings (during or subsequent to the fourth quarter of fiscal 2022 through the end of the fourth quarter of fiscal 2023) and an increase in Same-Store Sales (6% year over year). Same-store sales growth mainly comprised a 5% boost from menu price adjustments and a 1% rise in traffic/mix.
Operating Results
The restaurant-level profit margin was 16% in the fiscal fourth quarter (compared with 11% reported in the prior-year quarter). The upside was primarily driven by menu price increases, labor optimization and improvements in supply chain sourcing.
During the fiscal fourth quarter, labor and related expenses increased 17.4% year over year to $44.8 million. Other operating costs during the quarter declined 24.1% year over year to $25.9 million.
General and administrative expenses during the quarter came in at $35.5 million compared with $43.5 million reported in the prior year quarter. The downside was caused by a decline in stock-based compensation expenses ($6.4 million), research and prototyping costs and travel and related costs. However, this was partially offset by an increase in management salaries and benefits.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) during the fiscal fourth quarter amounted to $(1.8) million compared with $(17.9) million reported in the prior-year quarter.
Other Financial Information
As of Dec 31, 2023, Sweetgreen had cash and cash equivalents of $257.2 million compared with $331.6 million as of Dec 25, 2022.
Fiscal 2023 Highlights
Total revenues in the fiscal 2023 amounted to $584 million compared with $470.1 million in fiscal 2022.
Adjusted EBITDA in the fiscal 2023 came in at $(2.8) million compared with $(49.9) million reported in fiscal 2022.
In the fiscal 2023, the adjusted loss per share came in at $1.01 compared with $1.73 reported in the previous year.
2024 Guidance
For the first quarter of fiscal 2024, the company expects total revenues in the range of $150 million to $154 million. The company anticipates that the same-store sales change will be approximately 3%. Restaurant-Level Profit Margin is projected in the range of 16-17%. The company expects adjusted EBITDA in the fiscal first quarter to be between $(4) million to $(2) million. For the first quarter of fiscal year 2024, the company expects to open 5 to 6 new restaurants.
For fiscal 2024, the company expects total revenues in the range of $655 million to $670 million. The company anticipates same-store sales change to be between 3-5%. Restaurant-Level Profit Margin is projected in the range of 18-19.5%. The company expects adjusted EBITDA to be between $8 million and $15 million. For fiscal 2024, the company expects to open 23-27 new restaurants.
Zacks Rank
Sweetgreen currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
McDonald's Corporation (MCD - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, MCD reported adjusted EPS of $2.95, outpacing the Zacks Consensus Estimate of $2.81. Adjusted earnings increased 11% from the prior-year quarter’s figure. Quarterly net revenues of $6.4 billion missed the consensus mark of $6.5 billion. The top line rose 8% year over year. The upside was backed by menu price increases, effective marketing campaigns and continued digital and delivery growth.
Yum China Holdings, Inc. (YUMC - Free Report) reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, YUMC reported adjusted EPS of 25 cents, beating the Zacks Consensus Estimate of 13 cents. The bottom line surged 92.3% from 13 cents reported a year ago. Quarterly revenues of $2.5 billion outpaced the consensus mark of $2.4 billion. The top line rose 19.4% on a year-over-year basis. Excluding foreign currency translation, revenues increased 21% year over year. The upside can be attributed to net new unit contribution (12%) and same-store sales growth (4%).
Brinker International, Inc. (EAT - Free Report) reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. Effective marketing and pricing strategies backed the upside. Sequential improvements in guest traffic bode well.
During the quarter, EAT reported adjusted EPS of 99 cents, surpassing the Zacks Consensus Estimate of a loss of $1.47. The company reported an adjusted EPS of 76 cents per share in the prior-year quarter. Quarterly revenues of $1.07 billion missed the Zacks Consensus Estimate of $1.08 billion. The top line increased 5.4% on a year-over-year basis. EAT gained from Chili's solid performance.