Sweetgreen, Inc. (NYSE:SG) Q3 2023 Earnings Call Transcript

Katherine Griffin: Okay. Fair enough. Thank you.

Operator: Your next question comes from the line of Matt Curtis with William Blair. Your line is open.

Matt Curtis: Hi. Thanks for taking my question. Just to follow-up on the Sweetpass discussion, I mean I understand it’s going to be an important driver of comps for you in the future. But I was just wondering if you could talk about what the impact – what impact Sweetpass has had on comps so far, or is it too early to say?

Jonathan Neman: I would say very marginal so far. As I mentioned earlier, we are very much in the enrollment and acquisition period, more of an investment period. And as we build that membership base, we will move into leveraging it. So, like I said, it’s a huge focus for us to make some optimizations on – less on the underlying framework, we are pretty happy with how that works. But I think there is some work we can do in terms of the journey and how we leverage the CRM, to drive that frequency of guests. And there is probably a few minor things you can do in terms of driving better enrollment upfront. So, expect to see some minor changes, but overall, pleased with the start, and do think this will be a big comp driver in the years ahead and has not been a huge impact for us thus far.

Matt Curtis: Okay. Got it. Thanks for that. And then just one other question on the quarter, it looks like other restaurants OpEx was pretty significantly, at least more than we were expecting. Can you just describe what drove that?

Jonathan Neman: Can you say that again?

Matt Curtis: Yes, sorry. It’s just a question on the third quarter, other restaurant operating costs. It was up pretty significantly, at least more than we were projecting. I was just wondering if you could say what drove that.

Mitch Reback: Actually, it’s difficult for me to explain why it was up versus what was expected. We saw no significant change in our inside numbers or planning.

Matt Curtis: Okay. Thank you.

Operator: And your last question comes from the line of Andrew Charles with TD Cowen. Your line is open.

Zach Ogden: Thank you. This is Zach Ogden for Andrew. Just looking at the updated guidance relative to the start of the year, the store openings are at the high end, and the same-store sales are at the midpoint. The midpoint of the same-store sales was unchanged. So, the revenue guidance was updated to the lower half of that range. So, can you talk about what’s leading that, if everything else is at the high –at the midpoint or high end of the range?

Mitch Reback: Yes. Thanks for the question. I think all I can really say about that as we kind of head into the fourth quarter is, we are kind of cognizant of all the consumer uncertainty that we hear and read about. And as you know, seasonally, we are heading into our softest quarter of the year, and it contains three holiday weeks. I think those factors all kind of play together to lead us to the guidance number.

Zach Ogden: Okay. Got it. Thank you. And then just a question on the third quarter, so the same-store sales for the full quarter seemed to exceed what you had disclosed for the July period. So, was there that acceleration throughout the quarter and what do you attribute that to?

Mitch Reback: Yes. Thank you. We saw our same-store sales grow each month in the third quarter. So, August is bigger than July and September was bigger than August. So, we saw a period of sequential growth all quarter.

Zach Ogden: Okay. Great. Thank you.