Sweetgreen, Inc 10-Q for FY2022 Q3

Sweetgreen, Inc. (SG)

10-Q 2022-11-09 For: 2022-09-25

Added on April 08, 2026

About this 10-Q

Sweetgreen, Inc filed this 10-Q on November 9, 2022, covering the quarter ended September 25, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 25, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $124.03M; up 29.4% from $95.84M a year earlier
Net loss: $47.4M; compared with a net loss of $30.07M a year earlier
Diluted EPS: -$0.43; compared with -$1.58 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware						27-1159215
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3102 36th Street Los Angeles, CA						90018
(Address of Principal Executive Offices)						(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	SG	New York Stock Exchange


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	o
		Emerging growth company	x


		Page
Part I Financial Information
Item 1.	Financial Statements	1
	Consolidated Statements of Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Preferred Stock And Stockholders’ (Deficit) Equity	3
	Consolidated Statements of Cash Flows	5
	Notes to the Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market	42
Item 4.	Controls and Procedures	42

Part II Other Information
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
Signatures		45


	As of September 25, 2022		As of December 26, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	381,035	$	471,971
Accounts receivable	4,579		2,644
Inventory	1,202		903
Prepaid expenses	10,087		13,763
Tenant improvement receivable	15,148		16,695
Current portion of lease acquisition costs	627		525
Other current assets	815		155
Total current assets	413,493		506,656
Property and equipment, net	208,270		180,666
Goodwill	35,970		35,970
Intangible assets, net	30,670		32,868
Lease acquisition costs, net	5,512		4,391
Security deposits	1,609		1,770
Other assets	4,543		—
Restricted cash	166		328
Total assets	$	700,233	$	762,649
LIABILITIES, AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,688	$	11,197
Accrued expenses	16,543		16,338
Accrued payroll	11,464		12,093
Gift cards and loyalty liability	1,643		1,839
Current portion of deferred rent liability	7,100		6,061
Other current liabilities	2,175		—
Total current liabilities	47,613		47,528
Deferred rent liability, net of current portion	49,709		38,402
Accrued payroll, net of current portion	—		2,500
Contingent consideration liability	18,322		20,477
Other non-current liabilities	967		500
Deferred income tax liabilities	184		125

Total liabilities	$	116,795	$	109,532
COMMITMENTS AND CONTINGENCIES (Note 14)


Stockholders’ equity:
Common stock, $0.001 par value per share, 2,000,000,000 Class A shares authorized, 97,275,477 and 95,868,394 Class A shares issued and outstanding as of September 25, 2022 and December 26, 2021, respectively; 300,000,000 Class B shares authorized, 13,477,303 and 13,477,303 Class B shares issued and outstanding as of September 25, 2022 and December 26, 2021, respectively	111		109

Additional paid-in capital	1,196,173		1,129,224
Accumulated deficit	(612,846)		(476,216)
Total stockholders’ equity	583,438		653,117
Total liabilities and stockholders’ equity	$	700,233	$	762,649


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Thirteen weeks ended				Thirty-nine weeks ended
	September 25, 2022		September 26, 2021		September 25, 2022		September 26, 2021
Revenue	$	124,026	$	95,844	$	351,535	$	243,448
Restaurant operating costs (exclusive of depreciation and amortization presented separately below):
Food, beverage, and packaging	34,474		26,701		95,477		67,125
Labor and related expenses	38,006		30,316		109,321		79,343
Occupancy and related expenses	17,188		14,053		47,815		35,919
Other restaurant operating costs	14,535		11,640		42,753		33,001
Total restaurant operating costs	104,203		82,710		295,366		215,388
Operating expenses:
General and administrative	41,381		28,944		142,313		78,395
Depreciation and amortization	11,887		9,303		33,870		25,558
Pre-opening costs	3,061		2,789		8,093		6,256
Impairment of long-lived assets and closed-store costs	1,693		4,415		1,845		4,415
Loss on disposal of property and equipment	21		—		41		56
Restructuring charges	11,081		—		11,081		—
Total operating expenses	69,124		45,451		197,243		114,680
Loss from operations	(49,301)		(32,317)		(141,074)		(86,620)
Interest income	(1,644)		(78)		(2,406)		(299)
Interest expense	23		23		68		65
Other (income) expense	(303)		(2,196)		(2,166)		608
Net loss before income taxes	(47,377)		(30,066)		(136,570)		(86,994)
Income tax expense	20		—		60		—
Net loss	$	(47,397)	$	(30,066)	$	(136,630)	$	(86,994)
Earnings per share:
Net loss per share basic and diluted	$	(0.43)	$	(1.58)	$	(1.24)	$	(4.88)
Weighted average shares used in computing net loss per share basic and diluted	110,375,126		19,084,124		109,848,272		17,836,525


	For the thirteen weeks ended September 25, 2022 and September 26, 2021
	Preferred Stock			Class S Stock			Common Stock			Additional Paid-in Capital		Loans to Related Parties		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount		Shares	Amount
Balances at June 27, 2021	69,231,197	$	614,496	—	$	—	17,635,784	$	18	$	26,523	$	(4,000)	$	(379,969)	$	(357,428)
Net loss	—	—		—	—		—	—		—		—		(30,066)		(30,066)
Exercise of stock options	—	—		—	—		4,243,589	4		21,546		—		—		21,550
Exercise of common stock warrants	—	—		—	—		14,333	—		32		—		—		32
Issuance of Class S Stock	—	—		1,843,493	2		—	—		30,702		—		—		30,704
Stock-based compensation expense	—	—		—	—		—	—		2,832		—		—		2,832
Repayment of related party loan	—	—		—	—		—	—		1,159		4,000		—		5,159
Balances at September 26, 2021	69,231,197	$	614,496	1,843,493	$	2	21,893,706	$	22	$	82,794	$	—	$	(410,035)	$	(327,217)

Balances at June 26, 2022	—	$	—	—	$	—	109,963,357	$	110	$	1,177,522	$	—	$	(565,449)	$	612,183
Net loss	—	—		—	—		—	—		—		—		(47,397)		(47,397)
Exercise of stock options	—	—		—	—		258,844	1		1,050		—		—		1,051
Issuance of common stock related to restricted shares	—	—		—	—		530,579	—		—		—		—		—

Stock-based compensation expense	—	—		—	—		—	—		17,601		—		—		17,601
Balances at September 25, 2022	—	$	—	—	$	—	110,752,780	$	111	$	1,196,173	$	—	$	(612,846)	$	583,438


	For the thirty-nine weeks ended September 25, 2022 and September 26, 2021
	Preferred Stock			Class S Stock			Common Stock			Additional Paid-in Capital		Loans to Related Parties		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount		Shares	Amount
Balances at December 27, 2020	62,562,051	$	505,638	—	$	—	16,731,625	$	17	$	19,662	$	(4,000)	$	(323,041)	$	(307,362)
Net loss	—	—		—	—		—	—		—		—		(86,994)		(86,994)
Exercise of stock options	—	—		—	—		5,147,748	5		25,310		—		—		25,315
Exercise of common stock warrants	—	—		—	—		14,333	—		32		—		—		32
Issuance of Class S Stock	—	—		1,843,493	2		—	—		30,702		—		—		30,704
Stock-based compensation expense	—	—		—	—		—	—		5,929		—		—		5,929
Issuance of preferred stock (net of issuance costs of $226)	6,669,146	108,858		—	—		—	—		—		—		—		—
Repayment of related party loan	—	—		—	—		—	—		1,159		4,000		—		5,159
Balances at September 26, 2021	69,231,197	$	614,496	1,843,493	$	2	21,893,706	$	22	$	82,794	$	—	$	(410,035)	$	(327,217)

Balances at December 26, 2021	—	$	—	—	$	—	109,345,697	$	109	$	1,129,224	$	—	$	(476,216)	$	653,117
Net loss	—	—		—	—		—	—		—		—		(136,630)		(136,630)
Exercise of stock options	—	—		—	—		819,454	2		3,976		—		—		3,978
Issuance of common stock related to restricted shares	—	—		—	—		587,629	—		—		—		—		—


Stock-based compensation expense	—	—		—	—		—	—		62,973		—		—		62,973

Balances at September 25, 2022	—	$	—	—	$	—	110,752,780	$	111	$	1,196,173	$	—	$	(612,846)	$	583,438


SWEETGREEN, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(dollar amounts in thousands)	As of September 25, 2022		As of December 26, 2021
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	381,035	$	471,971
Restricted cash, noncurrent	166		328
Total cash, cash equivalents and restricted cash shown on statement of cash flows	$	381,201	$	472,299


			Fair Value Measurements as of September 25, 2022								Fair Value Measurements as of December 26, 2021
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
(dollar amounts in thousands)
Contingent consideration	18,322		—		—		18,322		20,477		—		—		20,477
Total	$	18,322	$	—	$	—	$	18,322	$	20,477	$	—	$	—	$	20,477


(dollar amounts in thousands)	Contingent Consideration
Balance—December 26, 2021	$	20,477
Change in fair value	(2,155)
Balance—September 25, 2022	$	18,322


(dollar amounts in thousands)
2022	$	1,846
2023	5,488
2024	2,853
2025	433
2026	—


(dollar amounts in thousands)	As of September 25, 2022		As of December 26, 2021
Furniture and fixtures	$	23,682	$	26,168
Computers and other equipment	27,939		22,890
Kitchen equipment	65,296		47,911
Leasehold improvements	195,626		167,362
Assets not yet placed in service	28,915		21,981
Total property and equipment	341,458		286,312
Less: accumulated depreciation	(133,188)		(105,646)
Property and equipment, net	$	208,270	$	180,666


(dollar amounts in thousands)	As of September 25, 2022		As of December 26, 2021
Rent deferrals	$	1,749	$	2,547
Accrued general and sales tax	2,874		3,115
Accrued delivery fee	907		778
Accrued settlements and legal fess	1,384		2,156
Other accrued expenses	9,629		7,742
Total accrued expenses	$	16,543	$	16,338


	As of September 25, 2022	As of December 26, 2021

Options outstanding under the 2009 Stock Plan, 2019 Equity Incentive Plan, Spyce Food Co. 2016 Stock Option Plan and Grant Plan and 2021 Equity Incentive Plan	13,410,616	13,773,414
Shares reserved for achievement of Spyce milestones	714,285	714,285
Shares reserved for employee stock purchase plan	3,000,000	3,000,000
RSUs and PSUs outstanding under the 2019 Equity Incentive Plan and 2021 Equity Incentive Plan	8,685,080	9,013,854


Shares available for future issuance under the 2019 Equity Incentive Plan and 2021 Equity Incentive Plan	11,157,109	12,159,177
Total reserved shares of common stock	36,967,090	38,660,730


(dollar amounts in thousands except per share amounts)	Number of Shares	Weighted Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value





Balance—December 26, 2021	13,773,414	$	6.87	7.42	$	337,269
Options granted	741,118	22.64
Options exercised	(819,454)	4.85
Options forfeited	(252,190)	13.44
Options expired	(32,272)	6.94
Balance—September 25, 2022	13,410,616	$	7.74	6.99	$	125,586

Exercisable—September 25, 2022	9,254,215	$	5.77	6.27	$	102,364

Vested and expected to vest—September 25, 2022	13,410,616	$	7.74	6.99	$	125,586


Fair value of assets acquired	As of September 7, 2021
Restricted cash	203
Property and equipment, net	707
Other assets	660
Developed technology	20,050
Goodwill	29,695
Total assets acquired	$	51,315

Fair value of liabilities assumed
Other liabilities	628
Total liabilities assumed	$	628
Total identifiable net assets	$	50,687

Fair value of consideration
Cash consideration, net of cash acquired	2,762
Closing third party expenses	781
Equity consideration	30,704
Contingent equity consideration	16,440
Total consideration	$	50,687


(dollar amounts in thousands except per share amounts)	Number of Shares	Weighted-Average Grant Date Fair Value
Balance—December 26, 2021	2,392,426	$	24.18
Granted	566,245	21.59
Released	(588,620)	22.15
Forfeited	(306,399)	26.06
Balance—September 25, 2022	2,063,652	$	23.77


	Thirteen weeks ended						Thirty-nine weeks ended
(dollar amounts in thousands )	September 25, 2022			September 26, 2021			September 25, 2022			September 26, 2021
Net New Restaurant Openings	10			11			26			21
Average Unit Volume(1)	$	2,892		$	2,459		$	2,892		$	2,459
Same-Store Sales Change (%)(2)	6		%	43		%	17		%	21		%
Restaurant-Level Profit	$	19,823		$	13,134		$	56,169		$	28,060
Restaurant-Level Profit Margin (%)	16		%	14		%	16		%	12		%
Adjusted EBITDA	$	(6,793)		$	(14,085)		$	(30,698)		$	(48,928)
Adjusted EBITDA Margin (%)	(5)		%	(15)		%	(9)		%	(20)		%
Total Digital Revenue Percentage	60		%	63		%	62		%	68		%
Owned Digital Revenue Percentage	40		%	43		%	41		%	47		%


	Thirteen weeks ended
(dollar amounts in thousands)	September 25, 2022		September 26, 2021		Dollar Change		Percentage Change
Revenue	$	124,026	$	95,844	$	28,182	29	%
Restaurant operating costs (exclusive of depreciation and amortization presented separately below):
Food, beverage, and packaging	34,474		26,701		7,773		29	%
Labor and related expenses	38,006		30,316		7,690		25	%
Occupancy and related expenses	17,188		14,053		3,135		22	%
Other restaurant operating costs	14,535		11,640		2,895		25	%
Total cost of restaurant operations	104,203		82,710		21,493		26	%
Operating expenses:
General and administrative	41,381		28,944		12,437		43	%
Depreciation and amortization	11,887		9,303		2,584		28	%
Pre-opening costs	3,061		2,789		272		10	%
Impairment of long-lived assets and closed-store costs	1,693		4,415		(2,722)		(62	%)
Loss on disposal of property and equipment	21		—		21		100	%
Restructuring charges	11,081		—		11,081		N/A
Total operating expenses	69,124		45,451		23,673		52	%
Loss from operations	(49,301)		(32,317)		(16,984)		53	%
Interest income	(1,644)		(78)		(1,566)		2008	%
Interest expense	23		23		—		—	%
Other (income) expense	(303)		(2,196)		1,893		(86	%)
Net loss before income taxes	(47,377)		(30,066)		(17,311)		58	%
Income tax expense	20		—		20		100	%
Net loss	$	(47,397)	$	(30,066)	$	(17,291)	58	%


(amounts in thousands)	Total		2022		2023		2024		2025		2026		Thereafter
Operating leases	$	444,031	$	11,619	$	52,022	$	54,389	$	53,833	$	52,576	$	219,592
Purchase obligations(1)	$	743	$	743	$	—	$	—	$	—	$	—	$	—


(amounts in thousands)	Thirty-nine weeks ended September 25, 2022		Thirty-nine weeks ended September 26, 2021
Net cash used in operating activities	(24,081)		(36,215)
Net cash used in investing activities	(70,995)		(69,746)
Net cash provided by financing activities	3,978		140,555
Net increase (decrease) in cash and cash equivalents and restricted cash	$	(91,098)	$	34,594


	SWEETGREEN, INC.

Date: November 8, 2022	By:	/s/ Mitch Reback
		Mitch Reback
		Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer, and Duly Authorized Signatory)


			/s/ Jonathan Neman
			Jonathan Neman
			President and Chief Executive Officer
			(Principal Executive Officer)


			/s/ Mitch Reback
			Mitch Reback
			Chief Financial Officer
			(Principal Financial Officer)