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

Operator: We do have another question from Brian Mullan with Piper Sandler. Your line is open.

Brian Mullan: Thanks for taking the follow-up. Just a question on the restaurant level margins, if we were to take the upper end of the guide this year and say you got to 17.5%, that’s a lot of really good progress year-on-year. If you put aside the Infinite Kitchen for a second, do you think restaurant level margins could expand next year? And I ask that within the context of, I believe you still think there is a path to 20% over time, without the Infinite Kitchen. So, I am just curious if you could kind of give some early thoughts on – if you could expand them next year?

Mitch Reback: Yes. Thanks for the question. We do see our restaurant level margins to continue to expand year-over-year. We believe next year in 2024, they will exceed 2023. And we clearly see a path to kind of that benchmark 20%. You know we had a 20% margin in the second quarter of this year, we ran 19% in the third quarter. But we think as we kind of look out on the things that we have discussed earlier, both on the cost structure side, around labor optimization, and on the growth side around menus, Sweetpass, Sweetpass Plus, that we actually see drivers to increase revenue and costs coming down, and we think it’s clearly a path to 20% near-term, and that’s without any benefit from the IK, which, quite frankly could be transformational over the next few years.

Brian Mullan: Okay. Thank you, Mitch.

Operator: This concludes today’s call. You may now disconnect.