Sweetgreen, Inc.

Good afternoon, ladies and gentlemen. Welcome to the Sweet Dream Q3 2022 earnings conference call. At this time, all participants are in listen-only mode, and please be advised that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. And if you would like to withdraw your question, simply press star 1 again. And now at this time, I'd like to turn the conference over to Rebecca Nenu, head of investor relations. Please go ahead.

Thank you and good afternoon, everyone. Here with me today are Jonathan Neiman, co-founder and CEO, and Mitch Rebeck, chief financial officer. Before we begin, we have a couple of reminders. Our earnings release is available on our website at investor.sweetgreen.com. During this call, we will be making comments of a forward-looking nature. Actual results may differ materially from those expressed or implied as a result of various risks and uncertainties. For more information about some of these risks, please review the company's SEC filings, including the section titled Risk Factors in our latest annual report on Form 10-K filing and subsequently filed quarterly report on Form 10-Q. These forward-looking statements are based on information as of today, and we assume no obligation to publicly update or revise our forward-looking statements. Additionally, we will be discussing certain non-GAAP financial measures, which are in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP. A reconciliation of these items to the nearest U.S. GAAP measure can be found in this afternoon's press release available on our IR website. With that, it's my pleasure to turn the call over to Jonathan to kick things off.

Thank you, Rebecca, and good afternoon, everyone. As we near our first anniversary as a public company, I want to begin by offering my gratitude to our incredible team members who power our mission of building healthier communities by connecting people to real food, adding the sweet touch with every customer interaction. For the quarter, we reported sales of $124 million, representing 29% year-over-year growth. and same-store sales growth of 6%. We opened 10 restaurants in the quarter. Total digital sales represented 60% of our total Q3 revenue, with approximately two-thirds of those sales coming via our own digital channels. AUVs were $2.9 million, and restaurant-level margins were 16% for the quarter. Our adjusted EBITDA loss was $6.8 million in the third quarter, narrowing from a loss of $14.1 million this time last year. That figure has improved each quarter this year, and we continue to demonstrate improvement on our path to profitability. While this has been a challenging year for the industry, we are proud of how we have navigated the macro environment and believe that our high-quality product offers excellent price value. We are relentlessly focused on financial and operational discipline as we steer through uncertain times in the world ahead. Our strong value proposition starts with the help of our 200 sustainable farmers producers, and distribution partners. We share a network of partners that supply some of the most highly regarded restaurants in the United States. The vast majority of what we source is local or organic, and our passionate team members make food from scratch every day in each restaurant. This creates the difference that our customers can taste. We have a bowl price under $10 in all our markets, and we've held our core menu price flat since the beginning of the year. while the majority of our industry has raised prices more than once this year. During our two-plus years in the pandemic, we drove best-in-class digital acquisition and sales while simplifying our operating model. We continue to deliver value through technology by meeting customers wherever they are, believing technology should enhance the human experience, not replace it. Now that the world is opening up, we are going back to basics, relaunching the playbook that we call Intimacy at Scale that helps us build the best-in-class brand over the past 15 years. I'd like to highlight a few of the ways we built Intimacy at Scale. First, we take a local approach to building community connections with local chefs, farmers markets, artists, community partners, and creators so that with every opening we become an authentic part of the community.