Shares of Sweetgreen took a hit in the Friday afternoon trading session, following a quarterly report that indicated a greater loss than what was initially predicted. This comes as a result of increased costs from the salad restaurant chain.
The third-quarter figures showed an 18 cents per share loss for Sweetgreen, while Visible Alpha's analysts had initially estimated a 15 cents per share loss. Although the revenue increased by 13% year-on-year to $173.4 million, this was still below the anticipated figures.
Sweetgreen cited rising protein costs and increased staffing expenses - attributed to wage rate hikes in several markets - as major contributors to the loss. The company also spent significantly on increasing its number of restaurants from 26 to 31, causing a surge in their general and administrative expenses by $800,000 to a total of $36.8 million.
The restaurant chain's CEO and co-founder, Jonathan Neman, remains optimistic. He believes that the enlarged menu, the performance of the newly opened restaurants this year, and their growth in emerging markets will trigger a "reacceleration of our 2025 unit growth”.
Sweetgreen has also raised the lower end of its full-year sales outlook, forecasting a range of $675 million to $680 million, an increase from the previous estimate range of $670 million to $680 million. Despite the dip, it's worth noting that Sweetgreen's shares have more than tripled in value since the beginning of the year, even accounting for the losses on Friday.