1. The key driver for Sweetgreen’s stock jump this week was its improvement in profitability in addition to its consistent growth trajectory as it opens new locations.

• Restaurant-Level Profit improved by 5% – it was $24.8 million, and Restaurant-Level Profit Margin was 16%, versus Restaurant-Level Profit of $12.8 million and Restaurant-Level Profit Margin of 11% in the prior year period.

2. Revenue Growth:

• Sweetgreen reported total revenue of $153.0 million for Q4 2023, a 29.0% increase compared to the same period in 2022.
• In comparison:
  • CAVA achieved revenue growth of 52.5%,
  • Shake Shack achieved revenue growth of 20.0%,
  • Chipotle achieved revenue growth of 15.4%

3. Same-Store Sales:

• Sweetgreen’s same-store sales rose by 6.0% in Q4 2023, outperforming its 4.0% growth in the prior year.
• In comparison:
  • CAVA same-store sales were 11.4%
  • Chipotle same-store sales were 8.4%.
  • Shake Shack’s same-store sales were 2.8%

Chipotle – CMG

New Restaurant Openings: The company is on track to open between 255 to 285 new restaurants in the current year and anticipates opening between 285 to 315 new restaurants in 2024, with at least 80% having Chipotlane.

International Expansion: Chipotle opened its first location in Calgary, Canada, with record opening day sales. Plans are in place to improve operations in Europe and to collaborate with Alshaya Group for openings in Kuwait and Dubai

Sweetgreen – SG

Infinite Kitchen Deployment: Sweetgreen anticipates deploying 7 to 9 Infinite Kitchens into new units and 2 to 4 retrofits in 2024. The Infinite Kitchen is expected to create a more efficient assembly process and enhance the customer and employee experience.

New Store Openings: The company plans to open between 23 and 28 new stores during 2024, with the Infinite Kitchen installations weighted towards the back half of the year. The retrofits are planned for high-volume urban stores to understand how the increased throughput will translate into higher revenue and flow-through.

The One Group – STKS

The ONE Group plans to add 8 new venues in 2023, with 6 already opened by the time of the earnings call. Upcoming Openings: For the remainder of the year, they are on track to open 2 new company owned STKs in Boston, Massachusetts, and Salt Lake City, Utah.

Early in 2024, the company plans to open a company-owned STK in Washington, D.C., at the Marriott Grand Marquis, a company-owned STK in Aventura, Florida at the Aventura Mall, and a licensed STK.

Long-term Growth: The ONE Group views their addressable market as 200 STK restaurants globally and 200 Kona Grill restaurants domestically, with best-in-class ROIs of between 40% and 50%

Week Ending | 3/1/2024

The last 90-day performance has been strong with an average of +35% for the Top 10.

This Top 10 cohort has outperformed the S&P and S&P Consumer index over the last year.

The top 10 is made up of mostly Franchisor entities, which have higher multiples than company owned concepts. Consensus revenue growth forecasts estimate ~10% growth into 2024. The growth guidance is attributable to store growth and price increases.

The restaurant industry has seen valuations decline due to interest rate increases.