0001628280-25-039058
SEC filingRevenue grew 0.5% QoQ driven by new restaurants, offset by 7.6% same-store sales decline; Restaurant-Level Profit Margin fell to 18.9%.
For the thirteen weeks ended June 29, 2025, revenue increased 0.5% to $185.6 million from $184.6 million in the prior year period. The increase was driven by $14.5 million in incremental revenue from 33 net new restaurant openings since Q2 2024, partially offset by a $13.9 million decline in comparable restaurant base revenue, resulting in a negative same-store sales change of 7.6%. The same-store sales decline reflected a 10.1% decrease in traffic and product mix, partially offset by a 2.5% benefit from menu price increases implemented after Q2 2024.
Restaurant-Level Profit Margin decreased to 18.9% from 22.5% in the prior year period, driven by deleverage on lower sales volume and higher costs. Food, beverage, and packaging costs as a percentage of revenue increased to 27.7% from 27.0%, due to higher cost product mix and tariff-related packaging cost increases, partially offset by menu price increases. Labor and related expenses as a percentage of revenue increased to 27.5% from 26.9%, due to wage rate increases and deleverage, partially offset by labor optimization. Occupancy and related expenses as a percentage of revenue increased to 8.9% from 8.1%, primarily due to deleverage. Other restaurant operating costs as a percentage of revenue increased to 17.0% from 15.5%, driven by higher delivery fees and restaurant-level advertising.
Loss from operations widened to $26.4 million from $16.2 million, reflecting higher impairment and closure costs ($5.3 million vs. $0.1 million) and restructuring charges ($1.1 million vs. $0.5 million). Net loss was $23.2 million compared to $14.5 million in the prior year period.
The company operates a single reportable segment: restaurant operations. Revenue growth is driven by new restaurant openings, with 9 net new openings in Q2 2025 and 14 year-to-date. The company ended the quarter with 260 restaurants. Same-store sales declined 7.6% in Q2 and 5.5% year-to-date, reflecting traffic weakness. Digital channels represented 60.8% of total revenue in Q2, up from 55.7% in the prior year, with owned digital at 33.4% (up from 30.5%), driven by the new SG Rewards loyalty program.
Management expects to open at least 40 new restaurants in fiscal year 2025, including at least 20 Infinite Kitchen units. The company anticipates a tariff-related impact of approximately 40 basis points on food, beverage, and packaging costs in future periods, similar to Q2 2025. For new restaurant development, a net tariff-related increase of approximately 5% on average unit cost ($1.4-$1.5 million) is expected, beginning in Q4 2025. Infinite Kitchen units (typically $450,000-$550,000) are also expected to see a 5% price increase due to tariffs, though 10 of the 20 units scheduled for 2025 were fully insulated. The company continues to evaluate organizational structure and may implement additional changes to lower administrative headcount.
As of June 29, 2025, Sweetgreen's balance sheet shows a cash and cash equivalents position of $168.5 million, a decrease from $214.8 million at December 29, 2024. Total assets were $831.9 million. The company has no debt, as its credit facility with EagleBank expired on December 13, 2024, and was not renewed. Total stockholders' equity decreased to $423.3 million from $446.1 million, primarily due to a net loss of $48.2 million for the twenty-six weeks ended June 29, 2025, partially offset by stock-based compensation and option exercises. The company's accumulated deficit grew to $923.6 million. Gift card and loyalty liabilities, a form of deferred revenue, totaled $6.3 million, up from $4.4 million at year-end, driven by the launch of the new SG Rewards loyalty program.
The company's primary commitments are operating leases for its 260 restaurant locations and corporate office. Total future minimum lease payments amount to $440.3 million, with $26.0 million due in the remainder of 2025. The weighted average remaining lease term is 7.26 years with a discount rate of 6.82%. Additionally, Sweetgreen has $35.4 million in commitments for non-cancelable leases that have not yet commenced, an increase from $27.5 million at year-end. The notes state that the majority of purchase obligations are for restaurant supplies and are due within the next twelve months, but no specific aggregate amount is disclosed. The company is also party to a contingent consideration liability related to the Spyce acquisition, with a remaining fair value of $4.6 million as of June 29, 2025, down from $15.0 million at year-end after a $7.0 million milestone payment was made.
Sweetgreen does not pay dividends and has no share buyback program. Capital expenditures for the twenty-six weeks ended June 29, 2025, were $40.3 million, primarily for the purchase of property and equipment, representing 11.5% of total revenue. This is an increase from $32.7 million in the prior year period. The company also spent $4.3 million on intangible assets. Financing activities provided $2.4 million, mainly from stock option exercises. The company made a $2.3 million cash payment related to the Spyce contingent consideration milestone, which was classified within operating activities.
The company operates as one operating and reportable segment, with all revenue derived from retail sales of food and beverages by company-owned restaurants within the United States. Revenue is disaggregated by channel: Owned Digital Channels ($115.0M), In-Store Non-Digital ($139.5M), and Marketplace ($97.3M) for the twenty-six weeks ended June 29, 2025. No geographic or segment-level profitability metrics are disclosed in the notes.
CFO deteriorated sharply to ($2.7M) from +$22.5M YoY, driven by larger net loss, higher non-cash lease costs, and unfavorable working capital swings (notably operating lease liabilities and accrued payroll). Capex intensity remained high at $40.3M (property & equipment), exceeding CFO and contributing to a $44.8M cash burn. No dividends or material share repurchases occurred; only minor tax withholding payments noted. No anomalies such as one-time tax payments were evident. FCF coverage of capital returns is not applicable as none were paid.