2023-07-31 07:20:22 ET
Sweetgreen ( NYSE: SG ) investors are looking for shares to bounce back on Monday after the restaurant stock fell 8.74% on Friday due to a disappointing earnings report .
The restaurant chain recorded 22% revenue growth during the quarter, but missed estimates by $3.6M with a tally of $152.5M. Same-store sales were up 3% during the quarter vs. the +4.1% consensus estimate. Sweetgreen's restaurant-level profit margin improved to 20% of sales from 19% a year ago. Adjusted EBITDA turned positive, with $3.3M topping the -$7.8M mark from a year ago.
Cowen analyst Andrew Charles clipped Q3 and full-year same-store sales estimates on Sweetgreen ( SG ) after the report and warned cost discipline could be harder to find amid the challenging top line backdrop. The firm kept a Market Perform rating on Sweetgreen ( SG ) and lowered its price target to $14.
Piper Sandler also jumped in Monday with an upgrade on the restaurant stock to Overweight from Neutral. The firm thinks the tide may be turning for Sweetgreen ( SG ) after a period of rough sledding.
There was some good news delivered by Sweetgreen ( SG ) during the Los Angeles-based company's earnings conference call ( transcript ).
"What we're seeing in inflation essentially in the second quarter was very, very little to no inflation in both commodities and in labor. And we expect much of these trends to continue on through the back half of the year. Those are the factors that really led to the improvement in the margin, and we see that largely being sustained out into the future."
Shares of Sweetgreen ( SG ) gained 6.27% in the premarket session to $538.00 to take back some ground from the sharp post-earnings decline.
More on Sweetgreen:
- Sweetgreen: On A Path To Expansion In A Competitive Industry
- More articles from Seeking Alpha analysts
- Growth metrics on Sweetgreen
- Seeking Alpha's Quant Rating for Sweetgreen
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Sweetgreen rallies after Piper Sandler upgrade