1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
SG
Event Date
2021-11-18
Sector
Consumer
Subsector
Hotels, Restaurants & Leisure
Offer Range
$28.00-$28.00
Shares Offered
13M
111.4M
$5.3B
11.7%
Implied Upside vs Midpoint
Description
Our Mission To Build Healthier Communities by Connecting People to Real Food We are building the next generation restaurant and lifestyle brand that serves healthy food at scale. Our core values guide our actions and we aim to empower our customers, team members and partners to be a positive force on the food system. For too long, industrial food production has enabled large chain restaurants to design menus optimized for efficiency at the cost of nutrition and long-term health. The result is food created to fit the system, as opposed to food designed for the customer. We started sweetgreen to help change this. Over the last 15 years, we have been leading a movement to re-imagine fast food for a new era. There is a powerful shift happening in consumer behavior. Every day more people want to eat healthier food and care about the impact their choices have on the environment. This is becoming the new normal, and we believe sweetgreen is well positioned to be a category-defining food brand for the future. Today, sweetgreen is one of the fastest-growing restaurant companies in the United States by revenue. As of September 26, 2021, we owned and operated 140 restaurants in 13 states and Washington, D.C., and employed over 5,000 team members. We have thoughtfully designed all of our restaurants to both reflect the culture and feel of our local communities and to support our multiple digital channels. For our fiscal year to date through September 26, 2021, 68% of our revenue came through our Total Digital Channels, with 47% of our revenue coming from our Owned Digital Channels (and the remaining 32% of our revenue attributable to Non-Digital transactions made through our In-Store Channel). Most importantly, we have built a purpose-driven brand with significantly greater reach than our current physical footprint. Our brand recognition, in combination with our passionate customer following, has enabled us to lead conversations on the importance of what we eat. Our bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect. Since opening our first restaurant in 2007, we have served over 100 million healthy meals - and we’re just getting started. Our Food Ethos We believe the choices we make about what we eat, where it comes from and how it is prepared have a direct impact on our health, our communities and the planet. This is our Food Ethos, and it is firmly rooted in every aspect of our business. At sweetgreen, we only serve Real Food, which for us means: • Plant-forward • Celebrates seasonality • Made fresh in our restaurants • Prioritizes organic, regenerative, and local sourcing • Meets strict and humane animal welfare and seafood standards • Free of highly-processed preservatives, artificial flavors, and refined or hidden sugars • Mindful of the carbon impact of each ingredient to protect future generations This commitment to our Food Ethos keeps our food delicious, nutrient dense, and sustainable. At sweetgreen, Real Food tastes better, makes you feel better, and drives the frequency that has defined our success. We also apply our Food Ethos by integrating sustainability into every component of our value chain. Our plant-forward menu means that we are already 30% less carbon intensive than the average U.S. diet, according to Watershed, our third-party climate technology partner. We are a leading brand in an industry that has been reported to drive as much as one third of global greenhouse gas emissions, which The Rockefeller Foundation estimates to cost $400 billion per year in the United States alone. We believe that climate change is the defining challenge of our generation, which is why we committed to becoming carbon neutral by the end of 2027. What Sets Sweetgreen Apart We leverage our brand, technology, and supply chain to build a foundation that enables us to rapidly scale Real Food. Our approach is a balance of art and science. We start with the best ingredients, leverage data to understand the needs of our customers and use human creativity to tell great stories around food. Over the last 15 years, we have invested in five core elements that are designed to give us a durable competitive advantage. Transparent and Scalable Supply Chain We have built a differentiated, end-to-end supply chain that begins with more than 200 domestic food partners, such as farmers and bakers, and culminates in delicious, high-quality food for our customers. Our supply chain is organized into regional distribution networks that align retail proximity with cultivation to allow for more transparency from seed to bowl. We collaboratively plan crops with growers far in advance of our supply needs to ensure we can serve the best products for each market. Our supply chain drives key decisions throughout our operations, from planning our seasonally inspired menu to prepping our fresh produce in our open kitchens. This integrated approach directly enhances our product quality, ensures high standards of food safety and builds trust with our customers. Consistent with our commitment to transparency, we are proud to showcase our food partners on the walls of every sweetgreen restaurant. Healthy and Habitual Menu We have designed our menu to be delicious, customizable and convenient to empower our customers to make healthier choices for both lunch and dinner. We currently offer signature salads, warm bowls, and plates that are complemented by a seasonal menu that changes five times a year. Additionally, our assortment of approximately 40 freshly prepared or cooked ingredients allows our customers to create millions of unique, customized orders to accommodate almost any flavor profile or dietary preference. We place our customers at the center of our menu design. We leverage data from our digital platform to better understand consumer preferences and behavior and integrate these learnings as we continue to evolve our menu offerings. • New Menu Categories: With the addition of Warm Bowls, Sides and Plates, we have further diversified our menu to provide customers with a greater variety of options. Collectively, for our fiscal year to date through September 26, 2021, these new menu categories represented 43% of our revenue. • Day-Part Expansion: Our menu expansion has also enabled us to take advantage of multiple day-parts as a way to increase our revenue and AUV. Our day-part split was 66% lunch (orders placed before 4 p.m.) and 34% dinner (orders placed at or after 4 p.m.) for our fiscal year to date through September 26, 2021, which was consistent with the previous several years. The simplicity of our menu combined with the flexibility of our fresh ingredients has been our formula for making sweetgreen a part of our customers’ regular routine. Digitally-Driven Restaurants We strongly believe in harnessing the power of technology to enhance the sweetgreen experience. We have designed our digital platform to allow us to have a direct relationship with our customers, so that we can deliver a personalized experience and provide the convenience of multiple channels. As a result, the sweetgreen mobile app was recognized by the Webby Awards as the best Food & Drink app in both 2020 and 2021. We have always innovated ahead of the curve, and by adding Outpost (2018) and Native Delivery (2020) as additional Owned Digital Channels, we have continued to improve our digital business. • Total Digital Revenue Percentage: Increased from 30% in fiscal year 2016 to 75% in fiscal year 2020. • Owned Digital Revenue Percentage: Increased from 29% in fiscal year 2016 to 56% in fiscal year 2020. For our fiscal year to date through September 26, 2021, our digital share has remained strong, with a Total Digital Revenue Percentage of 68% and an Owned Digital Revenue Percentage of 47%, even as revenue from our In-Store Channel improved. --- The convenience of our multi-channel approach, combined with our ability to offer personalized content and recommendations (such as exclusive menu items and curated collections), results in a highly engaged cohort of habitual sweetgreen customers. • Customers that ordered through one or more of our Owned Digital Channels in a fiscal quarter in 2021 (and who had made a purchase prior to that quarter) ordered almost 1.5 times more often in that quarter than customers that placed only Non-Digital orders through our In-Store Channel. • Customers that ordered through two or more of our Owned Digital Channels in a fiscal quarter in 2021 (and who had made a purchase prior to that quarter) ordered more than 2.5 times more often in that quarter than customers that placed only Non-Digital orders through our In-Store Channel. --- In addition to our customer-facing digital platform, we have also invested in technology to support our back of house operations and simplify the work of our team members. These investments include leveraging systems that manage daily inventory in our restaurants to ensure freshness, guide prep work, optimize our meal assembly process, and manage our team members’ output to enhance our order fulfillment times. Passionate Team Member Culture Our greatest competitive advantage is, and has always been, our people. Our teams are energized every day by our purpose-driven brand and strong growth trajectory. We empower our more than 5,000 team members to develop lifelong skills and advance their careers. At sweetgreen, the best leaders come from within – we develop a talent-rich pipeline by having a clear promotional track for team members to become a Head Coach (our title for a store manager) within as few as three years. During the six-month period preceding September 26, 2021, approximately half of our open Head Coach and Assistant Coach roles were filled by internal promotions. We obsess over the team member experience and provide industry-leading benefits, such as equity incentives for our Head Coaches, parental leave to all of our team members, and policies and resource groups to promote diversity and inclusion. Our teams do their best work when they can bring their whole and authentic selves to work, which we believe results in an exceptional customer experience that keeps our customers coming back and feeling connected to the brand. In October 2021, we were ranked 18th by Newsweek in their Top 100 Most Loved Workplaces rankings. A Brand Rooted in Purpose and Community Our brand is designed to inspire consumers to live healthier lives without compromising their values. This allows sweetgreen to lead conversations on the importance of what we eat and the impact it has on the environment. Our goal is to connect food and culture to help redefine what the fast-food industry will look like in the years to come. We have collaborated with some of the world’s best chefs, athletes and musicians to amplify our mission, including our recent partnership with world champion tennis player and longtime sweetgreen fan, Naomi Osaka. In both 2019 and 2020 we were named as one of Fast Company’s Most Innovative Companies of the Year. We believe there is no such thing as a successful business in an unsuccessful community, which is why we strive to build engagement through our social impact initiatives, including: • “sweetgreen in schools”: We partnered with FoodCorps to create programs to reimagine the school cafeteria that reached more than 170,000 students during the 2019-2020 school year; and • Impact Outpost: At the onset of COVID-19, we partnered with Chef Jose Andres’ non-profit, World Central Kitchen, to raise over $2.5 million and provide close to 400,000 meals to frontline hospital heroes. All this results in a highly engaged community of sweetgreen customers that stand for health and wellness and are proud to promote the brand, as demonstrated by our best-in-class net promoter score (“NPS”) of 78 on average from 2018 through the third fiscal quarter of 2021. --- We were founded in November 2006 and incorporated in October 2009 in Delaware. Our principal executive offices, which we refer to as our sweetgreen Support Center, are located at 3101 W. Exposition Boulevard, Los Angeles, CA 90018, and our telephone number is (323) 990-7040. Our website address is www.sweetgreen.com.
Sweetgreen, Inc. annual income statement and balance sheet, FY 2022 to FY 2025, as reported in SEC filings.
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Revenue | $470M | $584M | $677M | $679M |
| Operating income | ($193M) | ($122M) | ($95.7M) | ($139M) |
| Net income | ($190M) | ($113M) | ($90.4M) | ($134M) |
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Total assets | $909M | — | $857M | $788M |
| Total liabilities | $368M | — | $411M | $432M |
| Total equity | $541M | $483M | $446M | $356M |
| Cash & equivalents | $332M | $257M | $215M | $89.2M |