Los Angeles-based salad chain Sweetgreen may have started out as primarily a weekday lunch spot for office workers, but since going public, the fast-casual company has evolved beyond salads for commuters on their lunch hour to gaining substantial traffic in the dinner daypart (which now represents 40% of all transactions), and even weekend traffic. In June, weekend same-store sales grew by double digits.
Diversification of dayparts and demographics are two aspects of Sweetgreen’s continued momentum, as the 231-unit company reported same-store sales of 9% in the second quarter ended June 30 — the highest in two years — and its 13th consecutive quarter of more than 20% revenue growth.
“Sweetgreen’s high quality offering and compelling value is clearly resonating with consumers in today’s industry backdrop,” company founder and CEO Jonathan Neman said during Thursday’s earnings call.
The company’s growing popularity during the dinner daypart has been boosted by the addition of non-salad meal options and new, heartier proteins like the new caramelized garlic steak, which launched in May and has been driving sales in later dayparts and on the weekends.
“We believe our culinary innovation will allow us to further grow our dinner mix, as well as be a driver of long-term traffic,” Neman said.
Beyond menu innovation and sales diversification, Sweetgreen has been focusing on development and improving operational efficiencies. The company has been able to do both with the launch of the Infinite Kitchen prototype, which first opened in Nashville, Tenn., last year and uses automation technology to move bowls down a conveyor belt.
Sweetgreen just completed its first Infinite Kitchen store retrofit in Penn Plaza in New York City and remains on track to open seven additional Infinite Kitchen stores by the end of the year, as well as two or three retrofitted locations. With Infinite Kitchen, Sweetgreen said, total order completion time has dropped to just under 3.5 minutes. By next year, Neman said, they expect that more than half of new Sweetgreen locations will be created using this automated model, and the technology could be in all stores down the line.
“The reason we were so excited about this is we saw this as a huge tool for us, and especially as labor becomes more challenging and more expensive, and today, we’re seeing a lot of success,” Neman said. “We believe that there are applications outside of this core bowl application as well. There is a lot of option value around automation, and what we’ve built with the Infinite Kitchen.”
Sweetgreen’s development pipeline has been accelerating as well. The company has a growth rate of 15-20% annually, targeting 2026 and beyond for development acceleration. For the rest of 2024, Sweetgreen is on track to open between 24 and 26 new restaurants, more than a quarter of which will be automated.
For the second quarter ended June 30, Sweetgreen reported revenues of $324.9 million as compared to $249.9 million in the same period of 2023. Net income was $22.2 million as compared to $9.7 million in the same period of 2023.
Contact Joanna at [email protected]m
