Sweetgreen, Inc.

to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, press the pound key. As a reminder, today's call is being recorded. I will now hand today's call over to Rebecca Nunu, VP, Head of Investor Relations. Please go ahead.

Thank you and good afternoon, everyone. Here with me today are Jonathan Neiman, co-founder and chief executive officer, and Mitch Reback, 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. 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 an 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. gap 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. My passion to connect people to real food is why I started Sweetgreen with my co-founders Nathaniel and Nicholas. In 2007, we began our journey to build a category-defining brand with the goal of serving delicious meals to local communities. What started as a single restaurant in Washington, D.C., now has 225 restaurants in 18 states across the country, as well as D.C. We are creating and defining the category of better for you fast casual dining, while remaining acutely focused on building an innovative and enduring business that drives both growth and profitability. In 2023, we were aggressive with initiatives that we believe will benefit us for years to come, such as Menu Innovation, SweetPass, and the Infinite Kitchen. We ended the year with increasing momentum that gives me optimism for the year ahead. We reported sales of $584 million, representing 24% year-over-year growth. Total digital sales represented 59% of our total fiscal year revenue, with over 60% of those sales coming via our own digital channels. Restaurant-level margin for the fiscal year was 17.5%. On a full year basis, our adjusted EBITDA loss was $2.8 million, representing a $47 million improvement over the same period in 2022. For 2024, we are guiding adjusted EBITDA profitability. This profitability milestone will allow us to reinvest into the business with the goal of accelerating our growth. Our focus remains on building a category-defining brand that has tremendous value for our customers, team members, and our shareholders. Our strategic priorities are quite simple. One, Continue building our brand by creating great products and guest experiences. And two, expand our connection to guests by building and operating great restaurants. If we do both of these things well, aided by best-in-class technology, we should continue to amplify our already strong brand, widen our customer reach, drive customer traffic, and in turn, continue to drive margin expansion. Our brand has significantly greater reach than our current physical footprint of 225 restaurants. In 2023, we entered three new markets, Milwaukee, Tampa, and Rhode Island, and we are pleased with how our 2023 class is tracking towards our financial targets. So far this year, we've opened four restaurants, including our first of many in Seattle, Washington. Totem Lake, a suburb of Seattle, has been performing in line with our top urban restaurants in recent weeks. Openings like these reinforce our confidence that our brand resonates across the country. Core to Sweetgreen's culture is innovation. We have been consistently ahead of the market in culinary and supply chain development, as well as introducing new technology to drive a better customer experience, both online and in our restaurant. In the fourth quarter, we opened our second Infinite Kitchen in Huntington Beach. The Infinite Kitchen continues to deliver many benefits to our operating model, such as higher throughput, better order accuracy, portioning consistency, and substantially lower team member turnover. In addition to these benefits, we've also seen the average ticket at both locations more than 10% higher than their respective markets. As a result, we are seeing the Infinite Kitchen continuing to deliver margins well ahead of our internal projections. We are proud that we have built the industry leader in restaurant automation with the Infinite Kitchen. We are confident that it will unlock revenue growth and restaurant-level margin expansion and drive increasing returns for our shareholders. To be clear, we have a clear path to 20% plus four-wall margins with our current operating models. and we believe restaurants with the Infinite Kitchen will be accretive to restaurant-level sales and margins. We remain focused on traffic driving initiatives to drive positive same-source sales growth. Our multifaceted approach to driving traffic includes accelerating culinary innovation, continuing to activate our rewards program, improving throughput, focusing on running great restaurants, as well as increasing advertising spend in 2024 while maintaining G&A leverage. We see menu and culinary innovation as a key lever to expand customer reach, positively impact seasonality, and drive traffic. While Sweetgreen has historically been known as a salad company, we're broadening our menu while remaining committed to our ethos of building healthier communities by connecting people to real food. On October 24th, we launched protein plates featuring new proteins such as herb-roasted chicken and miso-glazed salmon. While early, plates have exceeded internal expectations. Our plates category, with the tagline, you don't have to be a salad person to be a sweet green person, was designed to appeal to a wide audience. We are pleased with the early data points to broaden our brand appeal. In the first 60 days after introducing protein plates, we've seen our dinner date part grow with plates. Plate sales are over-indexing in markets such as Texas and the Southeast. On February 6th, we launched our test of caramelized garlic steaks. a slow-roasted, marinated, tender cut of grass-fed, grass-finished tri-chip steak finished with slow-roasted caramelized garlic and onion in Boston. If steak passes our market test process, we will look to roll this out later this year. We've made great strides in marrying customer insights with menu innovation, and we have a multi-year menu innovation roadmap. I'm pleased with the operational strides we have made over the last few quarters, and in particular, how it has translated into frontline growth. there is still opportunity to capture additional demand, particularly at peak periods, and we've identified additional areas to drive throughput, including improving labor deployment. Our average head coach tenure continues to improve, and stability in restaurants for both our coaches and team members is the highest it's been in recent years. This, coupled with our decision to adjust head coach schedules to spend more time on the floor, is translating into improved operations and margins. Additionally, launching Tipping last year has supplemented team member wages by nearly $2 an hour. I want to take a moment to welcome our new Chief Operating Officer, Rossanne Williams. Rossanne is an accomplished global operations executive, bringing more than 30 years of experience leading international retail businesses. She brings a proven track record in driving sustainable growth of global iconic brands. Rossanne's passion for Sweetgreen's mission will further our work of bettering the communities we serve. I look forward to partnering with Rossanne and bringing her incredible skill set to our leadership team as we embark on the next phase of our growth journey. In the fourth quarter, we delivered our 11th consecutive quarter of over 20% sales growth and significantly expanded our restaurant-level margins year over year. We continue to demonstrate operationally and financially our commitment to building a sustainable business with a category-defining brand known for quality and transparency. What gets me excited today is the innovation you're seeing from the company. The infinite kitchens and our expanded menu offerings are just two powerful examples that, when coupled with the significant improvements we have made to our operations, have the potential to unlock significant value in the years ahead. My gratitude to all of our team members who continue to deliver a win-win-win for our customers, communities, and stakeholders. Because of our team, we had a great 2023 and achieved several milestones, including launching ProteinPlate, launching Two Infinite Kitchens, and expanding our unit economics. I couldn't be more optimistic and excited for the year ahead. And now, I'll turn it over to Mitch to walk through the financials.