Shares of Sweetgreen (SG) are soaring on Friday, following the company's first quarter results, which beat revenue expectations. Sweetgreen also raised its full-year guidance, further boosting the stock in today's trade. Sweetgreen CEO Jonathan Neman joins the Morning Brief to discuss the company's plans moving forward.

Neman commends the company's "very strong quarter," attributing the success to the consumer's resilience. However, on the operations front, the company grappled with a loss; Neman remains optimistic, stating, "There's a lot of leverage in the business." He hopes the company can overcome this loss and capitalize on the current momentum.

Neman also shares insights into the company's improvements and expansions, including new product offerings and the implementation of advanced technology to enhance productivity and efficiency across locations. Additionally, he outlines Sweetgreen's plans for achieving profitability.

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This post was written by Angel Smith

Video Transcript

Sweet Green shares are surging this morning, up just about 38% the biggest intraday move that we've seen in more than two years now.

This comes after revenue jumped 26% in the first quarter from a year ago.

Sweet green, also raising its sales projections for the year now seeing the same source sales growth of as much as 6%.

For more on these results, we want to bring in Jonathan and Neiman Sweet greens.

CEO Jonathan, it's great to have you here and great to talk to you.

Congratulations on your strong quarter here that you just put up.

Thank you so much.

I want to thank our whole team for all the hard work.

John, let's talk about what you are seeing in terms of these numbers clearly coming in better than expected.

You're raising your guidance here for the quarter, and this is on the back of what has already been a tremendous year for your stock.

Right now you have shares that nearly 200% since the start of the year.

What is that?

Then?

Tell us about the state of the consumer today.

You know, we had a really strong quarter.

We grew 26% year over year.

We expanded our margin to over 18% at the restaurant level and we comped 5%.

So we think that the consumer is still very resilient and we're very excited about some of the things we're putting out there.

You know, we just launched steak this week.

On Tuesday, we launched a grass fed pasture, raised stake and had a record day for the company on Tuesday.

So a lot of good momentum all around.

We're going to get back to that stake.

Jonathan.

You trust us, but the loss from operations that was really interesting, trimming that from what you saw a year ago.

At what point do you think you'll be profitable on your operations?

So we are.

We are guiding to adjusted EBITDA profitability this year, which is, you know, we've had a huge inflexion in the business as we've continued to grow our sales, expand our margin and hold our GN a relatively relatively flat so a lot of leverage in the business and looking to continue to build on that momentum as we deliver, deliver more stores around, you know, we open more stores around the country.

John, When you talk about that future momentum here, you've also been testing out automated a salad making machines.

What is the plan look like in terms of further adoption there?

And ultimately, what is that going to do in terms of the profit margins and your ability here to better control some of those costs?

We're very excited about the opportunity with automation, so we've been a leader in automation.

We have 22 pilot restaurants today.

The first one actually opened a year ago.

Today in Chicago, we have a second one open in California.

The technology is called the Infinite Kitchen.

And so what we What we've said in the past is that we expect at least 7% margin 7% margin improvement at the restaurant level from this automation.

But more importantly, it's about the customer and team member experience that has improved so customers get their food faster.

They get a perfectly portioned and team members get a better experience, a better restaurant to work in.

So we've seen far less turnover.

What we did say is, in Q one, we saw the two restaurants have a 28% margin so about 10 points better than the fleet.

And we are guiding to about seven new restaurants featuring the infinite kitchen this year, with three or four fits.

Over the next few years, we do expect to kind of take that up each year the percentage of restaurants that have the infinite kitchen as we continue to learn more and scale the technology.

Jonathan, you're scaling the menu as well.

Here, stay.

Let's get back to it.

Why now?

And what would you look to to determine whether or not it's a success upon market entry and delivering that to so many customers?

Absolutely.

So for Sweet Green.

We're all about meeting customers where they are, and Steak has been something that customers have wanted for a very long time.

You know, we do believe that that a protein rich diet is very, very good for you.

So we've been leaning into protein plates, really expanding our customer base and, uh, and trying to win more dinner business.

And so steak is another, uh, another strategy around that We've introduced a pasture grass fed pasture, raised steak.

Customers have loved it.

We tested it in Boston for a few months saw almost 20% of our orders featuring that bowl featuring that item.

And on Tuesday, when we launched it, the company had a record day.

So we're seeing a lot of positive momentum with steak again expanding the customer base, driving that dinner and showing that sweet green isn't just a salad place.

Jonathan, you've talked about the new menu items that you've added the new stores that you're planning to add, how you're trying to incorporate here, uh, automation into your restaurants.

What is that all ultimately then going to do in terms of that timeline to profitability?

What does that look like here?

So, as I mentioned earlier, we we do expect to be adjusted.

E dot profitability profitable This year we have not guided to a timeline on on net income profitability, but you will see significant leverage on the business this year as we continue to grow our top line and hold our G a relatively relatively flat