MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
−Removed: You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related notes included elsewhere in this report.
+Added: You should read the following discussion and analysis of our financial condition and results of operations together with the audited consolidated financial statements and related notes included elsewhere in this report.
This discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties.
2 unchanged sentences
and its subsidiaries.
−Removed: Our fiscal year is a 52- or 53-week period that ends on the Sunday closest to the last day of December.
+Added: Our fiscal year is a 52- or 53-week period that ends on the last Sunday of the calendar year.
Fiscal year 2023 was a 53-week period that ended December 31, 2023, fiscal year 2022 was a 52-week period that ended December 25, 2022, and fiscal year 2021 was a 52-week period that ended December 26, 2021.
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Real Estate Selection
+Added: Tab le o f Contents
We utilize a rigorous, data-driven real estate selection process to identify the location and timing of opening new restaurants, both in new and existing U.S.
−Removed: markets and in urban and suburban areas, with both
−Removed: high anticipated foot or vehicle traffic and proximity to workplaces, residences and other restaurant and retail businesses that support our multi-channel approach, including our Native Delivery, Marketplace Delivery and Outpost Channels.
−Removed: Macroeconomic Conditions, Inflation, the Impact of the COVID-19 Pandemic and Supply Chain Constraints
+Added: markets and in urban and suburban areas, with both high anticipated foot or vehicle traffic and proximity to workplaces, residences and other restaurant and retail businesses that support our multi-channel approach, including our Native Delivery, Marketplace Delivery and Outpost and Catering Channels.
+Added: Macroeconomic Conditions, Inflation, and Supply Chain Constraints
Consumer spending on food outside the home fluctuates with macroeconomic conditions.
−Removed: Consumers tend to allocate higher spending to food outside the home when macroeconomic conditions are stronger, and rationalize spending on food outside the home during weaker economies.
−Removed: Throughout our history, our customers have demonstrated a willingness to pay a premium for a craveable, convenient, and healthier alternative to traditional fast-food and fast-casual offerings.
+Added: Consumers tend to allocate higher spending to food outside the home when macroeconomic conditions are stronger, and reduce spending on food outside the home during weaker economies.
+Added: Our customers have in the past demonstrated a willingness to pay a premium for a craveable, convenient, and healthier alternative to traditional fast-food and fast-casual offerings.
However, as a premium offering in the fast-casual industry, we are exposed both to consumers trading the convenience of food away from home for the cost benefit of cooking, and to consumers selecting less expensive fast-casual alternatives during weaker economic periods.
−Removed: While we have historically been able to partially offset inflation and other increases, such as wage increases and increases in cost of goods sold, in the costs of core operating resources by gradually increasing menu prices or other customer fees, such as service fees and delivery fees, coupled with more efficient purchasing practices, productivity improvements, and greater economies of scale, there can be no assurance that we will be able to continue to do so in the current macroeconomic environment or in the future.
+Added: While we have historically been able to partially offset inflation and other increases in the costs of core operating resources, such as wage increases and increases in cost of goods sold, by gradually increasing menu prices or other customer fees, such as service fees and delivery fees, coupled with more efficient purchasing practices, productivity improvements, and greater economies of scale, there can be no assurance that we will be able to continue to do so in the current macroeconomic environment or in the future.
In particular, current and future macroeconomic conditions could cause additional menu price increases to negatively impact our Same Store Sales Growth.
There can be no assurance that future cost increases, including as a result of inflation, can be offset by increased menu prices or that our current or future menu prices will be fully absorbed by our customers without any resulting change to their demand for our products.
−Removed: In fiscal year 2022, our revenue growth was negatively impacted in part by current macroeconomic conditions and softening consumer demand.
−Removed: In fiscal year 2022, we have seen increased variability in our customer traffic patterns, including as a result of employees returning to offices at a slower rate and at a lower frequency than anticipated as a result of many workplaces adopting remote or hybrid models.
−Removed: Additionally, as a result of inflation we have seen an increase in wage rates and costs of goods sold during fiscal year 2022.
−Removed: We have also experienced certain supply chain disruptions for key ingredients, such as romaine, arugula, and tomatoes, which resulted in higher prices for those products or resulted in temporarily discontinuing those products in certain geographical markets, all of which has increased our operating expenses and had a negative impact on our Restaurant Level Profit.
−Removed: As a result of the factors described above, and as previously disclosed, during the third quarter of fiscal year 2022, we implemented certain cost cutting measures, and may in the future have to implement additional cost cutting measures.
−Removed: Specifically, on August 8, 2022, we took a number of steps to manage operating expenses at our sweetgreen Support Center with a focus of achieving profitability on an Adjusted EBITDA basis (the “Plan”), which included workforce reductions affecting approximately 5% of employees at the sweetgreen Support Center, and a reduction of our real estate footprint by vacating the premises of the existing sweetgreen Support Center and moving to a smaller office space adjacent to its existing location.
−Removed: We incurred total pre-tax restructuring and related charges of approximately $14.4 million.
−Removed: This included a $13.0 million non-cash restructuring expense, due to a reduction of our real estate footprint by vacating the premises of the existing sweetgreen Support Center and moving to a smaller office space adjacent to the existing location, of which $6.8 million related to impairment of the long-lived assets, $5.8 million and $0.4 million related to impairment of our operating lease asset and closure costs, respectively, associated with the sweetgreen Support Center, $0.6 million of severance and related benefits from workforce reductions at the sweetgreen Support Center, $0.6 million of costs related to abandoning certain potential future restaurant sites in an effort to streamline our future new restaurant openings, and $0.2 million of other related expenses.
−Removed: Subsequent to the end of fiscal year 2022, there has been an interruption by our supplier to the supply of packaging to our stores.
−Removed: This has caused and may continue to cause a disruption in our stores, as well as higher costs of materials, and could cause store closures in the future.
−Removed: While we are working to identify alternative suppliers, there can be no assurance we will be able to do so on a timely basis, at commercially reasonable terms, or at all, and an interruption in supply of packaging could adversely affect our business, financial condition and results of operations, including in particular our margins.
+Added: Our revenue growth has been negatively impacted in recent periods, in part by current macroeconomics conditions.
+Added: We continue to see variability in our customer traffic patterns, including as a result of fluctuations in return to office as a result of many workplaces adopting remote or hybrid models and we expect this variability to continue for the foreseeable future.
+Added: During the first fiscal quarter of 2023, there was an interruption by our supplier to the supply of packaging to our stores.
+Added: This caused a disruption in our stores, as well as higher costs of packaging materials, which negatively impacted our restaurant operating costs during that period.
+Added: However, later in fiscal year 2023 we started to see reduced costs of certain ingredients, specifically with respect to chicken and fish.
Our revenue fluctuates as a result of seasonal factors and weather conditions.
−Removed: Historically, our revenue has been lower in the first and fourth quarters of the year due, in part, to the holiday season and the fact that fewer people eat out during periods of inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year) than during periods of mild to warm weather (the spring, summer, and fall months).
+Added: Historically, our revenue has been lower in the first and fourth fiscal quarters of the year due, in part, to the holiday season and the fact that fewer people eat out during periods of inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year) than during periods of mild to warm weather (the spring, summer, and fall months).
In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months.
−Removed: Recently, as consumer behavior trends have changed due in part to the COVID-19 pandemic and the emergence of hybrid or remote work environments, the seasonality in our business has been less predictable than in prior years and we have seen an increase and prolonged negative impact on our revenue around national holidays.
+Added: Recently, as consumer behavior trends have changed due in part to the emergence of hybrid or remote work environments, the seasonality in our business has been less predictable than in prior years and we have seen an increase and prolonged negative impact on our revenue around national holidays.
These factors resulted in slower sales growth than anticipated during fiscal year 2023.
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Our revenue is derived from sales of food and beverage to customers through our five sales channels:
−Removed: In-Store Channel, Pick-Up Channel, Native Delivery Channel, Marketplace Channel, and Outpost Channel.
+Added: In-Store Channel, Pick-Up Channel, Native Delivery Channel, Marketplace Channel, and Outpost and Catering Channel.
There have been historical fluctuations in the mix of sales between our various channels.
−Removed: Due to the fact that our Native Delivery, Outpost, and Marketplace Channels require the payment of third-party fees in order to fulfill deliveries, sales through these channels have historically negatively impacted our margins.
−Removed: Additionally, historically, orders on our Native Delivery, Outpost and Marketplace Channels have resulted in a higher rate of refunds and credits than our In-Store and Pick-Up Channels, which has a negative impact on revenue on these channels.
+Added: Due to the fact that our Native Delivery, Outpost and Catering , and Marketplace Channels require the payment of third-party fees in order to fulfill deliveries, sales through these channels have historically negatively impacted our margins.
+Added: Additionally, historically, orders on our Native Delivery, Outpost and Catering and Marketplace Channels have resulted in a higher rate of refunds and credits than our In-Store and Pick-Up Channels, which has a negative
+Added: Tab le o f Contents
+Added: impact on revenue on these channels.
We have also historically prioritized promotions and discounts on our Owned Digital Channels, which also reduces revenue on these channels.
−Removed: If we see a shift in sales through the Native Delivery, Outpost, and Marketplace channels, our margins may decrease.
−Removed: However, over time, we expect that our margins will improve on our Native Delivery, Outpost, and Marketplace Channels as we scale each of these channels.
−Removed: Additionally, during fiscal year 2022, we began piloting our Catering program, with a goal of serving event and group customers in an additional format through which they prefer to order.
−Removed: Key Performance Metrics
+Added: If we see a shift in sales through the Native Delivery, Outpost and Catering , and Marketplace channels, our margins may decrease.
+Added: However, over time, we expect that our margins will improve on our Native Delivery, Outpost and Catering , and Marketplace Channels as we scale each of these channels.
+Added: Key Performance Metrics and Non-GAAP Financial Measures
We track the following key performance metrics and non-GAAP financial measures to evaluate our performance, identify trends, formulate financial projections, and make strategic decisions.
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These key performance metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled metrics or measures presented by other companies.
−Removed: See “Non-GAAP Financial Measures” below for a reconciliation of Restaurant-Level Profit,
−Removed: Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable financial measures stated in accordance with GAAP.
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
+Added: (dollar amounts in thousands) December 31, 2023 (1)
December 25, 2022 (1)
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Same-Store Sales Change (as adjusted) (%) (3)(4)
−Removed: 13% 25% (26%)
−Removed: Restaurant-Level Profit
−Removed: $69,286 $40,405 $(8,702)
−Removed: Restaurant-Level Profit Margin (%)
−Removed: Adjusted EBITDA
−Removed: $(49,934) $(63,099) $(107,483)
−Removed: Adjusted EBITDA Margin (%)
−Removed: (11%) (19%) (49%)
Total Digital Revenue Percentage
Owned Digital Revenue Percentage
+Added: (1) We operate on a 52/53 week fiscal year end that ends on the last Sunday of the calendar year.
+Added: Fiscal year 2023 was a 53-week year with the extra operating week (the “53rd week”) falling in our fourth fiscal quarter.
+Added: Fiscal 2022 and 2021 each contained 52 weeks.
+Added: (2) No restaurants were excluded from the Comparable Restaurant Base as of the end of fiscal year 2023.
Our results for the fiscal year ended December 25, 2022 have been adjusted to reflect the temporary closures of two restaurants which were excluded from the Comparable Restaurant Base.
Such adjustment did not result in a material change to AUV.
−Removed: Our results for the fiscal year ended December 27, 2020 have been adjusted to reflect the material, temporary closures of 19 restaurants due to the COVID-19 pandemic by excluding such restaurants from the Comparable Restaurant Base.
−Removed: Without these adjustments, AUV would have been $2.0 million as of December 27, 2020.
+Added: (3) For fiscal year 2023, Average Unit Volume and Same-Store Sales Change was adjusted to exclude the 53rd week of operations.
+Added: (4) Our results for the fiscal year ended December 31, 2023 have been adjusted to reflect the temporary closures of two restaurants, which were excluded from the calculation of Same-Store Sales change.
+Added: Such adjustments did not have a material impact on our Same-Store Sales Change for 2023.
Our results for the fiscal year ended December 25, 2022, have been adjusted to reflect the temporary closures of 6 restaurants.
−Removed: Such adjustments did not have a material impact on our Same-Store Sales Change.
−Removed: Our results for the fiscal years ended December 26, 2021 and December 27, 2020 have been adjusted to reflect the temporary closures of (i) 19 restaurants in fiscal year 2020 due to the COVID-19 pandemic, (ii) 56 restaurants in fiscal year 2020 due to civil disturbances that occurred during one week in fiscal year 2020 and (iii) 64 restaurants in fiscal year 2021 due to the civil disturbances that occurred in fiscal year 2020 referred to in clause (ii) above (which includes 8 additional restaurants that had not been operating long enough to be part of the Comparable Restaurant Base for the fiscal year 2020 calculations).
+Added: Such adjustments did not have a material impact on our Same-Store Sales Change for 2022.
+Added: Our results for the fiscal year ended December 26, 2021 have been adjusted to reflect the temporary closures of 64 restaurants in fiscal year 2021 due to civil disturbances that occurred in fiscal year 2020 (which includes 8 additional restaurants that had not been operating long enough to be part of the Comparable Restaurant Base for the fiscal year 2020 calculations).
With respect to the temporary closures due to civil disturbances, because excluding an entire fiscal month for these restaurants, which represented a significant portion of our restaurant fleet, would result in a Same-Store Sales Change figure that is not representative of our business as a whole, we excluded only one week from the calculation of Same-Store Sales Change for these restaurants.
−Removed: Without these adjustments, Same-Store Sales Change would have been 29% and (32%) for fiscal years ended December 26, 2021 and December 27, 2020, respectively.
+Added: Without these adjustments, Same-Store Sales Change would have been 29% for the fiscal year ended December 26, 2021.
Net New Restaurant Openings
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Before we open new restaurants, we incur pre-opening costs, as further described below.
+Added: During fiscal year 2024, we plan to integrate our Infinite Kitchen into an increased number of our new restaurants.
Average Unit Volume
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The measure of AUV allows us to assess changes in guest traffic and per transaction patterns at our restaurants.
−Removed: Comparable Restaurant Base for any measurement period is defined as all restaurants that have operated for at least twelve full months as of the end of such measurement period, other than any restaurants that had a material, temporary closure during the relevant measurement period.
−Removed: We excluded two restaurants from our Comparable Restaurant Base to reflect the temporary closure of such restaurants in fiscal year 2022.
+Added: Comparable Restaurant Base for any measurement period is defined as all restaurants that have operated for at least twelve full months as of the end of such measurement per iod, other than any restaurants that had a material, temporary closure during the relevant measurement period.
+Added: No restaurants were excluded from the Comparable Restaurant Base as of the end of fiscal year 2023.
+Added: W e excluded two restaurants from our Comparable Restaurant Base to reflect the temporary closure of such restaurants in fiscal year 2022.
Such exclusions did not result in a material change to AUV.
−Removed: Further, as a result of material, temporary closures in fiscal year 2020 due to the COVID-19 pandemic, 19 restaurants were excluded from our Comparable Restaurant Base as of the end of fiscal year 2020.
No restaurants were excluded from the Comparable Restaurant Base as of the end of fiscal year 2021.
+Added: Tab le o f Contents
Same-Store Sales Change
−Removed: Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period;
+Added: Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period excluding the 53rd week in any 53-week fiscal year;
provided, that for any restaurant that has had a temporary closure (which historically has been defined as a closure of at least five days during which the restaurant would have otherwise been open) during any prior or current fiscal month, such fiscal month, as well as the corresponding fiscal month for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant.
−Removed: fiscal year 2022, we excluded six restaurants from our Same-Store Sales Change to reflect the temporary closure of such restaurants, which d id not result in a material change to Same-Store Sales Change.
−Removed: Further, as a result of temporary closures of 19 restaurants due to the COVID-19 pandemic during the second and third fiscal quarters of 2020, Same-Store Sales Change has been adjusted for fiscal years 2021 and 2020.
−Removed: Additionally, as a result of temporary closures of restaurants due to civil disturbances that occurred during one week in fiscal year 2020 we excluded only one week from the calculation of Same-Store Sales Change for fiscal years 2021 and 2020 (and we excluded the corresponding week from the corresponding fiscal periods in the prior fiscal year).
−Removed: Fiscal years 2020 and 2021 have been adjusted to reflect the temporary closures of (i) 19 restaurants in fiscal year 2020 due to the COVID-19 pandemic, (ii) 56 restaurants in fiscal year 2020 due to civil disturbances that occurred during one week in fiscal year 2020 and (iii) 64 restaurants in fiscal year 2021 due to the civil disturbances that occurred in fiscal year 2020 referred to in clause (ii) above (which includes 8 additional restaurants that had not been operating long enough to be part of the Comparable Restaurant Base for the fiscal year 2020 calculations ) .
+Added: During fiscal year 2023, we excluded two rest aurants from our Same-Store Sales Change to reflect the temporary closure of such restaurants, which d id not result in a material change to Same-Store Sales Change for 2023.
+Added: During fiscal year 2022, we excluded six restaurants from our Same-Store Sales Change to reflect the temporary closure of such restaurants, which d id not result in a material change to Same-Store Sales Change for 2022.
+Added: Further, as a result of temporary closures of 19 restaurants due to the COVID-19 pandemic during the second and third fiscal quarters of 2020, Same-Store Sales Change has been adjusted for fiscal year 2021.
+Added: Additionally, as a result of temporary closures of restaurants due to civil disturbances that occurred during one week in fiscal year 2020 we excluded only one week from the calculation of Same-Store Sales Change for fiscal year 2021.
+Added: Fiscal year 2021 has been adjusted to reflect the temporary closures of 64 restaurants in fiscal year 2021 due to civil disturbances that occurred in fiscal year 2020 (which includes 8 additional restaurants that had not been operating long enough to be part of the Comparable Restaurant Base for the fiscal year 2020 calculations ) .
This is because excluding an entire fiscal month for these restaurants which represented a significant portion of our restaurant fleet, would result in a Same-Store Sales Change figure that is not representative of our business as a whole.
−Removed: This exclusion impacted the calculation of Same-Store Sales Change for these restaurants for fiscal year 2021 and 2020.
−Removed: Therefore, Same-Store Sales Change for fiscal years 2021 and 2020 is not comparable to Same-Store Sales Change for fiscal year 2022.
+Added: This exclusion impacted the calculation of Same-Store Sales Change for these restaurants for fiscal year 2021.
+Added: Therefore, Same-Store Sales Change for fiscal year 2021 is not comparable to Same-Store Sales Change for fiscal year 2023 and 2022.
This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and closures.
+Added: Total Digital Revenue Percentage and Owned Digital Revenue Percentage
+Added: Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Total Digital Channels.
+Added: Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels.
+Added: In recent years, we have experienced a reduction in our Owned Digital Revenue Percentage and our Total Digital Revenue percentage, which we believe is due to the continuing recovery of our In-Store Channel.
+Added: Non-GAAP Financial Measures
+Added: In addition to our consolidated financial statements, which are presented in accordance with GAAP, we present certain non-GAAP financial measures, including Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin.
+Added: We believe these measures are useful to investors and others in evaluating our performance because these measures:
+Added: • facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies.
+Added: These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or NOL), and the age and book depreciation of facilities and equipment (affecting relative depreciation expense);
+Added: • are widely used by analysts, investors, and competitors to measure a company’s operating performance;
+Added: are used by our management and board of directors for various purposes, including as measures of performance, as a basis for strategic planning and forecasting;
+Added: • are used internally for a number of benchmarks including to compare our performance to that of our competitors .
+Added: Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.
+Added: In particular, Restaurant-Level Profit and Adjusted EBITDA should not be
+Added: Tab le o f Contents
+Added: viewed as substitutes for, or superior to, loss from operations or net loss prepared in accordance with GAAP as a measure of profitability.
+Added: Some of these limitations are:
+Added: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Restaurant-Level Profit and Adjusted EBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
+Added: • Restaurant-Level Profit and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
+Added: • Restaurant-Level Profit and Adjusted EBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
+Added: • Restaurant-Level Profit and Adjusted EBITDA do not consider the potentially dilutive impact of stock-based compensation;
+Added: • Restaurant-Level Profit is not indicative of overall results of the Company and does not accrue directly to the benefit of stockholders, as corporate-level expenses are excluded;
+Added: • Adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as stock-based compensation;
+Added: loss on disposal of property and equipment;
+Added: certain other expenses;
+Added: Spyce acquisition costs;
+Added: enterprise resource planning system (“ERP”) implementation and related costs;
+Added: legal settlements;
+Added: and, in certain periods, impairment and closure costs and restructuring charges;
+Added: • other companies, including those in our industry, may calculate Restaurant-Level Profit and Adjusted EBITDA differently, which reduces their usefulness as comparative measures.
+Added: Because of these limitations, you should consider Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, loss from operations, net loss, and our other GAAP results.
Restaurant-Level Profit and Restaurant-Level Profit Margin
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Restaurant-Level Profit Margin is Restaurant-Level Profit as a percentage of revenue.
−Removed: As it excludes general and administrative expense, which is primarily attributable to our sweetgreen Support Center, we evaluate Restaurant-Level Profit and Restaurant-Level Profit Margin as a measure of profitability of our restaurants.
+Added: As it excludes general and administrative expense, which is primarily attributable to our corporate headquarters, which we refer to as our Sweetgreen Support Center, we evaluate Restaurant-Level Profit and Restaurant-Level Profit Margin as a measure of profitability of our restaurants.
+Added: The following table sets forth a reconciliation of our loss from operations to Restaurant-Level Profit, as well as the calculation of loss from operations margin and Restaurant-Level Profit Margin for each of the periods indicated :
+Added: Tab le o f Contents
+Added: Fiscal Year Ended
+Added: (dollar amounts in thousands)
+Added: December 31, 2023 (1)
+Added: December 25, 2022 (1)
+Added: December 26, 2021 (1)
+Added: Loss from operations $ (122,344) $ (193,337) $ (134,399)
+Added: General and administrative 146,762 187,367 125,040
+Added: Depreciation and amortization 59,491 46,471 35,549
+Added: Pre-opening costs 9,263 11,523 9,193
+Added: Impairment and closure costs 624 2,542 4,915
+Added: Loss on disposal of property and equipment (2)
+Added: Restructuring charges (3)
+Added: 7,437 14,442 —
+Added: Restaurant-Level Profit
+Added: $ 101,920 $ 69,286 $ 40,405
+Added: Loss from operations margin
+Added: (21) % (41) % (40) %
+Added: Restaurant-Level Profit Margin
+Added: 17 % 15 % 12 %
+Added: (1) We operate on a 52/53 week fiscal year end that ends on the last Sunday of the calendar year.
+Added: Fiscal year 2023 was a 53-week year with the extra operating week (the “53rd week”) falling in our fourth fiscal quarter.
+Added: Fiscal 2022 and 2021 each contained 52 weeks.
+Added: (2) Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment.
+Added: (3) Restructuring charges are expenses that are paid in connection with reorganization of our operations.
+Added: These costs primarily include lease and related costs associated with our vacated former Sweetgreen Support Center, including the impairment and amortization of the operating lease asset, expenses from workforce reductions affecting approximately 5% of employees at our Sweetgreen Support Center, and contract termination costs, related to streamlining our future new restaurant openings.
Adjusted EBITDA and Adjusted EBITDA Margin
−Removed: We define Adjusted EBITDA as net loss adjusted to exclude interest income, interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, loss on disposal of property and equipment, Spyce acquisition costs, amortization of cloud-based software implementation costs, other expense, and in certain periods, impairment and closure costs, and restructuring charges.
+Added: We define Adjusted EBITDA as net loss adjusted to exclude income tax expense, interest income, interest expense, depreciation and amortization, stock-based compensation expense, loss on disposal of property and equipment, other (income) expense, Spyce acquisition costs, ERP implementation and related costs, and, in certain periods, impairment and closure costs, restructuring charges and legal settlements.
Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.
−Removed: Total Digital Revenue Percentage and Owned Digital Revenue Percentage
−Removed: Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Total Digital Channels.
−Removed: Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels.
+Added: The following table sets forth a reconciliation of our net loss to Adjusted EBITDA, as well as the calculation of net loss margin and Adjusted EBITDA Margin for each of the periods indicated:
+Added: Tab le o f Contents
+Added: Fiscal Year Ended
+Added: (dollar amounts in thousands)
+Added: December 31, 2023 (1)
+Added: December 25, 2022 (1)
+Added: December 26, 2021 (1)
+Added: Net loss $ (113,384) $ (190,441) $ (153,175)
+Added: Non-GAAP adjustments:
+Added: Income tax expense
+Added: 379 1,345 147
+Added: Interest income (12,942) (5,143) (450)
+Added: Interest expense 128 83 87
+Added: Depreciation and amortization 59,491 46,471 35,549
+Added: Stock-based compensation (2)
+Added: 49,532 78,736 28,897
+Added: Loss on disposal of property and equipment (3)
+Added: Impairment and closure costs (4)
+Added: 624 2,542 4,915
+Added: Other expense (5)
+Added: 3,475 819 18,992
+Added: Spyce acquisition costs (6)
+Added: 472 646 1,832
+Added: Restructuring charges (7)
+Added: 7,437 14,442 —
+Added: ERP implementation and related costs (8)
+Added: Legal settlements (9)
+Added: Adjusted EBITDA
+Added: $ (2,795) $ (49,934) $ (63,099)
+Added: Net loss margin
+Added: (19)% (41)% (45)%
+Added: Adjusted EBITDA Margin
+Added: —% (11)% (19)%
+Added: (1) We operate on a 52/53 week fiscal year end that ends on the last Sunday of the calendar year.
+Added: Fiscal year 2023 was a 53-week year with the extra operating week (the “53rd week”) falling in our fourth fiscal quarter.
+Added: Fiscal 2022 and 2021 each contained 52 weeks.
+Added: (2) Includes non-cash, stock-based compensation.
+Added: (3) Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment.
+Added: (4) Includes costs related to impairment of long-lived and operating lease assets and store closures.
+Added: (5) Other expense includes the change in fair value of the contingent consideration and the change in fair value of the warrant liability.
+Added: For additional information, see Notes 1 and 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
+Added: (6) Spyce acquisition costs includes one-time costs we incurred in order to acquire Spyce including, severance payments, retention bonuses, and valuation and legal expenses.
+Added: For additional information, see Note 6 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
+Added: (7) Restructuring charges are expenses that are paid in connection with reorganization of our operations.
+Added: These costs primarily include lease and related non-cash expenses associated with our vacated former Sweetgreen Support Center, including the impairment of the operating lease asset.
+Added: See Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
+Added: (8) Represents the amortization costs associated to the implementation from our cloud computing arrangements in relation to our new ERP.
+Added: (9) Expenses incurred to establish accruals related to the settlements of legal matters.
Components of Results of Operations
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Upon sale, gift cards are recorded as unearned revenue and included within gift card liability in the accompanying consolidated balance sheets.
−Removed: The revenue from gift cards is recognized when redeemed by customers.
+Added: Tab le o f Contents
+Added: revenue from gift cards is recognized when redeemed by customers.
Because we do not track addresses of gift card purchasers, the relevant jurisdiction related to the requirement for escheatment, the legal obligation to remit unclaimed assets to the state, is our state of incorporation, which is Delaware.
1 unchanged sentence
We do not recognize breakage income because of our requirements to escheat unredeemed gift card balances.
−Removed: All of our restaurant locations offer a delivery option.
+Added: The majority of our restaurant locations offer a delivery option.
Delivery services are fulfilled by third-party service providers whether delivery is ordered through our Native Delivery Channel or Marketplace Channel.
9 unchanged sentences
We anticipate food, beverage and packaging costs on an absolute dollar basis will increase for the foreseeable future to the extent we experience additional in-store orders, as we open additional restaurants, and as a result our revenue grows.
−Removed: Additionally, we have recently experienced an increase in freight-related surcharges from our vendors as a result of increased inflation and higher gas prices.
−Removed: However, food, beverage, and packaging costs as a percentage of revenue may vary, as these costs are impacted by menu mix and fluctuations in commodity costs, inflation, and availability, as well as geographic scale and proximity.
+Added: Food, beverage, and packaging costs as a percentage of revenue may vary, as these costs are impacted by menu mix and fluctuations in commodity costs, inflation, and availability, as well as geographic scale and proximity.
+Added: We will continue to innovate in key areas, including menu.
Labor and Related Ex penses
3 unchanged sentences
Occupancy and Related Expenses
−Removed: Occupancy and related expenses consist of restaurant-level occupancy expenses (including rent, common area maintenance (”CAM”), and real estate taxes), and exclude occupancy expenses associated with unopened restaurants, which are recorded separately in pre-opening costs.
+Added: Occupancy and related expenses consist of restaurant-level occupancy expenses (including rent, common area maintenance (”CAM”) expenses, and real estate taxes), and exclude occupancy expenses associated with unopened restaurants, which are recorded separately in pre-opening costs.
We anticipate occupancy and related expenses on an absolute dollar basis will increase for the foreseeable future to the extent we continue to open new restaurants and revenue grows.
3 unchanged sentences
We expect that other restaurant operating costs will increase on an absolute dollar basis for the foreseeable future to the extent we continue to open new restaurants and our revenue grows.
−Removed: Other restaurant operating costs as a percentage of revenue are expected to increase in line with growth in our Native Delivery, Outpost, and Marketplace
−Removed: Channels, as these channels require us to pay third-party delivery fees.
+Added: Other restaurant operating costs as a percentage of revenue are expected to increase in line with growth in our Native Delivery, Outpost and Catering , and Marketplace Channels, as these channels require us to pay third-party delivery fees.
However, as revenue increases, we expect that other restaurant operating costs, such as repairs and maintenance and property insurance, as a percentage of revenue will decline.
+Added: Tab le o f Contents
Operating Expenses
General and Administrative
−Removed: General and administrative expenses consist primarily of operations, technology, finance, legal, human resources, administrative personnel, and other personnel costs that support restaurant development and operations, as well as stock-based compensation expense, brand-related marketing, and Spyce acquisition costs.
−Removed: We expect that general and administrative expenses will increase on an absolute dollar basis and vary from period to period as a percentage of revenue for the foreseeable future as we focus on processes, systems, and controls to enable our internal support functions to scale with the growth of our business.
−Removed: We expect to incur additional expenses as a result of operating as a public company, including expenses to comply with the rules and regulations applicable to companies listed on a national securities exchange, expenses related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general liability and director and officer insurance, investor relations, and professional services.
−Removed: While we expect that our general and administrative expenses will increase in absolute dollars as our business grows, as a percentage of revenue, we expect these expenses to vary from period to period and decrease over time.
−Removed: Additionally, we implemented certain cost cutting measures in the third quarter of fiscal year 2022, and may in the future have to implement additional cost cutting measures.
−Removed: See the subsection titled “—Factors Affecting Our Business—Macroeconomic Conditions and the Impact of the Covid-19 Pandemic and Inflation” above for a description of the Plan we implemented in August 2022.
+Added: General and administrative expenses consist primarily of operations, technology, finance, legal, human resources, administrative personnel, and other personnel costs that support restaurant development and operations, as well as stock-based compensation expense and brand-related marketing.
+Added: As a percentage of revenue, we expect our general and administrative expenses to vary from period to period and to decrease over time.
Depreciation and Amortization
−Removed: Depreciation and amortization include the depreciation of fixed assets, including leasehold improvements and equipment, and the amortization of external costs and certain internal costs directly associated with developing computer software applications for internal use.
+Added: Depreciation and amortization include the depreciation of fixed assets, including leasehold improvements and equipment, and the amortization of external costs, certain internal costs directly associated with developing computer software applications for internal use, and developed technology acquired as part of our Spyce acquisition.
We expect that depreciation and amortization expenses will increase on an absolute dollar basis as we continue to build new restaurants and make investments in our digital platform.
3 unchanged sentences
These costs are expensed as incurred.
−Removed: We expect that pre-opening costs will increase on an absolute dollar basis as we continue to build new restaurants and enter new markets.
+Added: Pre-opening costs depend on the number of new stores we open during each period.
+Added: As a result, we expect that pre-opening costs on an absolute dollar basis will fluctuate from period to period.
Impairment and Closure Costs
6 unchanged sentences
Restructuring charges are expenses that are paid in connection with the reorganization of our operations.
−Removed: These costs primarily include non-cash expenses, due to a reduction of our real estate footprint by vacating the premises for our vacated sweetgreen Support Center and moving to a smaller office space adjacent to its existing location, primarily related to impairment of the long-lived assets, which include property and equipment and operating lease assets, associated with our vacated sweetgreen Support Center.
−Removed: These costs also include severance and related benefits from workforce reductions affecting approximately 5% of employees at our sweetgreen Support Center, and costs related to abandoning certain potential future restaurant sites, which are a result of our efforts to streamline our future new restaurant openings, and other related expenses.
+Added: These costs primarily include operating lease asset impairment costs related to our vacated former Sweetgreen Support Center, as well as the amortization of the underlying operating lease asset and related real estate and CAM charge s, severance and related benefits from workforce reductions at our Sweetgreen Support Center, and costs related to abandoning certain potential future restaurant sites, which are a result of our efforts to streamline our future new restaurant openings, and other related expenses.
Interest Income and Interest Expense
Interest income consists of interest earned on our cash and cash equivalents.
−Removed: Interest expense includes mainly the interest incurred on our outstanding indebtedness, as well as amortization of deferred financing costs, mainly debt origination and commitment fees.
+Added: Interest expense includes mainly amortization of deferred financing costs from our debt origination and commitment fees.
+Added: Tab le o f Contents
Other Expense
−Removed: Other expense consists primarily of changes in the fair value of our contingent consideration liability and changes in fair value in our preferred warrant liability.
+Added: Other expense consists primarily of changes in the fair value of our contingent consideration liability.
We will continue to remeasure the liability associated with our contingent consideration liability until the underlying service conditions are met, or the performance period expires.
6 unchanged sentences
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Dollar
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Dollar
Change Percentage
22 unchanged sentences
687 278 409 147 %
−Removed: Restructuring charges 14,442 — 14,442 N/A
+Added: Restructuring charges 7,437 14,442 (7,005) (49 %)
Total operating expenses
11 unchanged sentences
Income tax expense
−Removed: 1,345 147 1,198 N/A
379 1,345 (966) (72 %)
+Added: $ (113,384) $ (190,441) $ 77,057 (40 %)
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
$ 584,041 $ 470,105 24 %
2 unchanged sentences
Same-Store Sales Change
−Removed: 13 % 25 % (12 %)
+Added: Tab le o f Contents
The increase in revenue in fiscal year 2023 was primarily due to $92.2 million of incremental revenue associated with 71 Net New Restaurant Openings during fiscal years 2023 and 2022.
−Removed: The increase in revenue was also impacted by an increase in Comparable Restaurant Base revenue of $43.6 million, resulting in a positive Same-Store Sales Change of 13%, consisting of a 7% benefit from menu price increases and a 6% increase from transactions.
−Removed: The increase in transactions is mostly related to recovery from the impact of the COVID-19 pandemic, experienced in the prior year.
−Removed: These increases were partially offset by the $1 .5 million negative impact from temporary restaurant closures, increased discounts and relocations of restaurants in fiscal year 2022.
+Added: The increase in revenue was also impacted by an increase in Comparable Restaurant Base revenue of $21.3 million, resulting in a positive Same-Store Sales Change of 4%, consisting of a 4% benefit from menu price increases as traffic/product mix remained flat.
+Added: In addition, we had an additional week of revenue in fiscal year 2023.
+Added: The increase in revenue was partially offset by the negative impact of restaurant closures in fiscal year 2023, as well as an increase in discounts associated with the launch of our Sweetpass+ loyalty program.
Restaurant Operating Costs
1 unchanged sentence
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Food, beverage, and packaging
1 unchanged sentence
As a percentage of total revenue
−Removed: 28 % 28 % — %
−Removed: The increase in food, beverage, and packaging costs for fiscal year 2022 was primarily due to a $33.3 million increase in food and beverage costs, a $2.9 million increase in packaging costs and a $0.3 million increase in freight and gas surcharges associated with deliveries from our distribution partners.
−Removed: This was primarily due to the 67 Net New Restaurant Openings during fiscal years 2021 and 2022, as well as higher charges on some of our key ingredients due to supply chain disruptions.
−Removed: As a percentage of revenue, food, beverage, and packaging costs for fiscal year 2022 remained consistent with the prior year.
−Removed: This was primarily due to our menu pricing increases, offset by continued inflationary pressures, higher freight-related surcharges and increased pricing on some of our key ingredients due to supply chain disruptions.
+Added: The increase in food, beverage, and packaging costs for fiscal year 2023 was primarily due to a $26.6 million increase in food and beverage costs and a $5.0 million increase in packaging cost.
+Added: This w as primarily due to the 71 Net New Restaurant Openings during fiscal years 2023 and 2022 as well as the use of higher-cost proteins.
+Added: In addition, during fiscal year 2023, we experienced supply chain disruptions for our bowls and plates, which resulted in the use of alternative packaging solutions with higher costs of materials.
+Added: As a percentage of revenue, food, beverage, and packaging costs for fiscal year 2023 remained consistent with the prior year primarily as a result of the increase in costs of packaging, up streaming initiatives, and a larger mix of higher cost proteins, offset by menu pricing increases.
Labor and Related Expenses
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Labor and related expenses
2 unchanged sentences
29% 31% (2 %)
−Removed: The increase in labor and related expenses for fiscal year 2022 was primarily due to an increase in staffing expenses across all of our markets.
−Removed: This was mostly due to the 67 Net New Restaurant Openings during fiscal years 2021 and 2022.
−Removed: The increase was also due to an increase in prevailing wage rates in many of our markets as a result of continued wage rate inflation in the industry and an increase in bonus expense, including a non-recurring retention bonus paid during the first quarter of fiscal year 2022, as we focus on employee retention.
−Removed: As a percentage of revenue, the decrease in labor and related expenses for fiscal year 2022 was primarily due to the impact of menu price increases, described above, greater sales leverage associated with the recovery from the COVID-19 pandemic and simplification of our operating model, partially offset by an increase in prevailing wages as a result of continued wage rate inflation in the industry.
+Added: The increase in labor and related expenses for fiscal year 2023 was primarily due to the 71 Net New Restaurant Openings during fiscal years 2022 and 2023.
+Added: The increase was also due to an increase in staffing expenses across all of our locations, primarily due to an increase in prevailing wage rates in many of our markets as a result of continued wage rate inflation in the industry.
+Added: These increases were partially offset by a $1.8 million benefit related to refundable employee retention tax credits (“ERC”) issued as part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) as well as an improvement in labor optimization.
+Added: See Note 13 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details on the ERC.
+Added: As a percentage of revenue, the decrease in labor and related expenses for fiscal year 2023 was primarily due to higher revenue, improvement in labor optimization and the $1.8 million ERC benefit as discussed above.
+Added: Tab le o f Contents
Occupancy and Related Expenses
−Removed: Certain prior period financial information has been reclassified, specifically related to repairs and maintenance and utilities, to conform with the current presentation of other restaurant operating costs within the consolidated statement of operations.
−Removed: As a result of the change, we recorded a $19.8 million and $14.3 million
−Removed: rec lassification from other occupancy and related expenses to other restaurant operating costs for fiscal years 2022 and 2021, respectively.
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Occupancy and related expenses
3 unchanged sentences
The increase in occupancy and related expenses for fiscal year 2023 was primarily due to the 71 Net New Restaurant Openings during fiscal years 2022 and 2023.
−Removed: Further, the increase was also impacted by higher COVID-19 related rent abatement received for multiple restaurant locations during fiscal year 2021.
−Removed: As a percentage of revenue, the decrease in occupancy and related expenses for fiscal year 2022 was primarily due to the impact of menu pricing increases discussed above and greater sales leverage associated with the recovery from the COVID-19 pandemic, partially offset by higher rent abatement received for multiple restaurant locations during fiscal year 2021.
+Added: As a percentage of revenue, the decrease in occupancy and related expenses for fiscal year 2023 was primarily due to an increase in locations in areas with lower occupancy cost as well as higher revenue.
Other Restaurant Operating Costs
−Removed: Certain prior period financial information has been reclassified, specifically related to repairs and maintenance and utilities, to conform with the current presentation of other restaurant operating costs within the consolidated statement of operations.
−Removed: As a result of the change, we recorded a $19.8 million and $14.3 million rec lassification from other occupancy and related expenses to other restaurant operating costs for fiscal years 2022 and 2021, respectively.
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Other restaurant operating costs
2 unchanged sentences
16 % 17 % (1 %)
−Removed: The increase in other restaurant operating costs for fiscal year 2022 was primarily due to a $4.8 million increase in delivery fees due to the growth of our Native Delivery and Marketplace Channels, a $2.6 million increase in credit card and online related processing fees related to the increases in revenue, a $0.8 million increase in marketing related costs and a $0.7 million increase in office systems related expense.
−Removed: Additionally, there was a $6.3 million increase in real estate taxes, utilities and repair and maintenance expenses, and a $4.0 million increase in kitchen, cleaning and related supplies to support the Net New Restaurant Openings described above.
−Removed: As a percentage of revenue, the decrease in other restaurant operating costs during fiscal year 2022 was primarily due to the impact of menu pricing increases discussed above and greater sales leverage associated with the recovery from the impact of the COVID-19 pandemic.
+Added: The increase in other restaurant operating costs for fiscal year 2023 was primarily due to the 71 Net New Restaurant Openings during fiscal years 2022 and 2023.
+Added: This includes increases in utilities and repair and maintenance expenses, delivery fees due to higher transaction volume, credit card and online processing fees related to the increases in revenue, and kitchen, cleaning and related supplies to support the Net New Restaurant Openings described above.
+Added: As a percentage of revenue, the decrease in other restaurant operating costs during fiscal year 2023 was primarily due to higher revenue.
Operating Expenses
1 unchanged sentence
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
General and administrative
2 unchanged sentences
25 % 40 % (15 %)
−Removed: The increase in general and administrative expenses for fiscal year 2022 was primarily due to a $49.8 million increase in stock-based compensation expense, primarily related to restricted stock units and performance-based restricted stock units issued prior to our IPO.
−Removed: We incurred a $5.4 million increase of expense related to our investment in Spyce (see Note 6 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K ) of which $6.6 million was related to an increase in research and development, partially offset by $1.2 million in non-recurring acquisition related costs.
−Removed: Additionally, we had an increase of approximately $4.2 million as we transitioned to operating as a public company, consisting of a $2.8 million increase in directors and officers liability insurance costs, $0.9 million of higher accounting-related fees and a $0.5 million increase in public company office systems.
−Removed: Included within public company office systems is $0.2 million of expense related to the amortization of costs associated with the implementation of our cloud computing arrangement in relation to our new enterprise resource planning system (“ERP”), which was implemented during fiscal year 2022.
−Removed: Additionally, we had a $3.1 million increase in marketing and advertising costs, and a $2.9 million increase in office systems as we continue to focus on growth and scalability, a $2.0 million increase in legal expense, of which $1.7 million was related to the implementation of ASC 842, a $1.3 million increase in our restaurant training program, a $1.1 million increase in travel and related expenses as we continue to open new stores, and a $0.8 million increase in rent.
−Removed: These costs were partially offset by a $7.0 million decrease in salaries and benefits, including reduced bonus for employees at the sweetgreen Support Center, a $0.6 million decrease in operational consulting, a $0.3 million decrease in our referral bonus program and a decrease of $0.4 million in other general and administrative costs.
−Removed: As a percentage of revenue, general and administrative expenses for fiscal year 2022 increased from fiscal year 2021 due to the increases noted above, primarily driven by higher stock-based compensation expense.
+Added: The decrease in general and administrative expenses for fiscal year 2023 was primarily due to a $29.2 million decrease in stock-based compensation expense, a $5.2 million decrease in management salaries and benefits, including bonus, the benefit of $5.1 million of ERC, and a $1.6 million decrease in liability insurance.
+Added: Additionally, we had decreases in research and prototyping costs, rent and related costs, travel-related expenses, and office systems.
+Added: These decreases were partially offset by an increase in consulting fees, non-income taxes, and expense related to the amortization of costs associated with the implementation of our cloud computing arrangements in relation to our new ERP system.
+Added: As a percentage of revenue, general and administrative expenses for fiscal year 2023 decreased from fiscal year 2022, primarily due to the fluctuations noted above, as well as comparatively higher revenue in the current period.
Depreciation and Amortization
+Added: Tab le o f Contents
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Depreciation and amortization
6 unchanged sentences
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Pre-opening costs
1 unchanged sentence
As a percentage of total revenue
−Removed: 2 % 3 % (1 %)
−Removed: The increase in pre-opening costs for fiscal year 2022 was primarily due to the 36 Net New Restaurant Openings during fiscal year 2022, as compared to 31 Net New Restaurant Openings during fiscal year 2021, as well as the timing of such openings.
−Removed: As a percentage of revenue, pre-opening costs decreased as a percentage of total revenue in fiscal year 2022 compared to fiscal year 2021, due to comparatively higher revenue in fiscal year 2022, partially offset by the increases in costs noted above.
+Added: The decrease in pre-opening costs for fiscal year 2023 was primarily due to improved cost efficiencies across 38 new restaurant openings in 2023 compared to 39 new restaurant openings in 2022.
+Added: As a percentage of revenue, pre-opening costs were relatively flat in fiscal year 2023 compared to fiscal year 2022.
Impairment and Closure Costs
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
−Removed: Impairment closure costs
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
+Added: Impairment and closure costs
$ 624 $ 2,542 (75 %)
As a percentage of total revenue
+Added: — % 1 % (1 %)
+Added: During fiscal year 2023 we recognized non-cash impairment charges of $0.6 million related to lease and related costs associated with previously closed stores, including the amortization of operating lease asset, and expenses associated with CAM and real estate taxes.
During fiscal year 2022 we recognized non-cash impairment charges of $2.0 million related to the property and equipment of three of our restaurants and non-cash impairment charges of $0.4 million related to the operating lease assets of three of our restaurants, as well as $0.1 million of closure costs related to one store previously operated by Spyce.
−Removed: During fiscal year 2021, we recorded non-cash impairment charges of $4.4 million related to certain of our stores, as well as the two stores operated by Spyce.
−Removed: During fiscal year 2021, we closed one store operated by Spyce, which was fully impaired during 2021.
−Removed: This closure resulted in closure costs of $0.5 million.
Loss on Disposal of Property and Equipment
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Loss on disposal of property and equipment
1 unchanged sentence
As a percentage of total revenue
−Removed: The increase in loss on disposal of property and equipment was due to an increase in furniture, equipment and fixture replacements in fiscal year 2022 as compared to fiscal year 2021.
+Added: Tab le o f Contents
+Added: The increase in loss on disposal of property and equipment was due to the timing of furniture, equipment and fixture replacements at multiple restaurants, in addition to a fleet-wide replacement of kitchen equipment with more cost efficient items in fiscal year 2023 as compared to fiscal year 2022.
Restructuring charges
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Restructuring charges
−Removed: $ 14,442 $ — N/A
+Added: $ 7,437 $ 14,442 (49 %)
As a percentage of total revenue
+Added: 1 % 3 % (2 %)
During fiscal year 2022, we implemented the Plan to manage operating expenses at our Sweetgreen Support Center and incurred total pre-tax restructuring and related charges of approximately $14.4 million.
−Removed: This included a $13.0 million non-cash restructuring expense, due to a reduction of our real estate footprint by vacating the premises of the existing sweetgreen Support Center and moving to a smaller office space adjacent to the existing location, of which $6.8 million related to impairment of the long-lived assets, $5.8 million and $0.4 million related to impairment of our operating lease asset and closure costs, respectively, associated with the sweetgreen Support Center, $0.6 million of severance and related benefits from workforce reductions affecting
−Removed: approximately 5% of employees at the sweetgreen Support Center, $0.6 million of costs related to abandoning certain potential future restaurant sites in an effort to streamline our future new restaurant openings, and $0.2 million of other related expenses.
−Removed: See the section titled “Factors Affecting Our Business—Macroeconomic Conditions, Inflation, and the Impact of the Covid-19 Pandemic” above for a description of the Plan we implemented in August 2022.
+Added: This included a $13.0 million non-cash restructuring expense due to a reduction of our real estate footprint by vacating the premises of the existing Sweetgreen Support Center and moving to a smaller office space adjacent to the existing location, of which $6.8 million related to impairment of the long-lived assets, $5.8 million, and $0.4 million related to impairment of our operating lease asset and closure costs, respectively, associated with the Sweetgreen Support Center, $0.6 million of severance and related benefits from workforce reductions affecting approximately 5% of employees at the Sweetgreen Support Center;
+Added: $0.6 million of costs related to abandoning certain potential future restaurant sites in an effort to streamline our future new restaurant openings, and $0.2 million of other related expenses.
+Added: During fiscal year 2023, stemming from the Plan, we recorded restructuring charges of $7.4 million primarily related to operating lease asset impairment costs from our vacated former Sweetgreen Support Center as well as the amortization of the underlying operating lease asset and related real estate and CAM charges.
Interest Income and Interest Expense
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Interest income
4 unchanged sentences
As a percentage of total revenue
−Removed: The increase in interest income, net was primarily due to higher interest rates on our money market accounts during fiscal year 2022, as well as higher average cash balances throughout the year.
+Added: (2) % (1) % (1 %)
+Added: The increase in interest income, net, was primarily due to higher interest rates on our money market accounts during fiscal year 2023.
Other Expense
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Other expense
1 unchanged sentence
As a percentage of total revenue
−Removed: — % 6 % (6 %)
−Removed: The decrease in other expense is primarily due to an increase in the fair value of our preferred warrant liability in fiscal year 2021, which was calculated at the date of our IPO based on the IPO price of $28.00 per share.
−Removed: Subsequent to the IPO, the fair value of our preferred warrant liability was reclassified to additional paid-in capital (“APIC”) and will not be a recurring expense.
−Removed: The decrease in other expense was offset by an increase in the fair value of our contingent consideration, which was issued as part of the Spyce acquisition, and will continue to impact other expense until the performance conditions associated with milestones for additional shares of Class A common stock are met or expire.
+Added: The change in other expense in fiscal year 2023 was primarily due to a change in the fair value of our contingent consideration compared to the prior year, which was issued as part of the Spyce acquisition in the third quarter of fiscal year 2021.
+Added: Tab le o f Contents
Income Tax Expense
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021 Percentage
+Added: (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage
Income tax expense $ 379 $ 1,345 (72 %)
As a percentage of total revenue
−Removed: Our effective tax rate for the fiscal years ended 2022 and 2 021 was (1.2%) and (0 .1%), respectively, primarily due to the full valuation allowance on our net deferred tax assets.
+Added: Our effective tax rate for the fiscal years ended 2023 and 2022 was (0.3%) and (0.7%), re spectively, primarily due to the full valuation allowance on our net deferred tax assets.
Comparison of Fiscal Year 2022 and Fiscal Year 2021
1 unchanged sentence
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
Change Percentage
22 unchanged sentences
278 107 171 160 %
+Added: Restructuring charges
+Added: 14,442 — 14,442 N/A
Total operating expenses
13 unchanged sentences
$ (190,441) $ (153,175) $ (37,266) 24 %
+Added: Tab le o f Contents
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
4 unchanged sentences
13 % 25 % (12 %)
−Removed: The increase in revenue in fiscal year 2021 was primarily due to an increase in Comparable Restaurant Base revenue of $53.6 million, resulting in a positive Same-Store Sales Change of 25%, consisting of a 21% increase in transactions and 4% benefit from menu price increases.
−Removed: The increase in transactions is mostly related to the impact of a decline in foot traffic, temporary restaurant closures and reduced office frequency as a result of stay-at-home orders and other restrictions due to the COVID-19 pandemic, in the prior year, which primarily impacted our In-Store Channel and which showed improvement in fiscal year 2021.
−Removed: The increase in revenue was also impacted by $54.2 million of incremental revenue associated with 46 Net New Restaurant Openings during fiscal years 2020 and 2021.
−Removed: There was also an $11.5 million negative impact from temporary closures in fiscal year 2020 that was not repeated in fiscal year 2021.
+Added: The increase in revenue in fiscal year 2022 was primarily due to $88.1 million of incremental revenue associated with 67 Net New Restaurant Openings during fiscal years 2021 and 2022.
+Added: The increase in revenue was also impacted by an increase in Comparable Restaurant Base revenue of $43.6 million, resulting in a positive Same-Store Sales Change of 13%, consisting of a 7% benefit from menu price increases and a 6% increase from transactions.
+Added: The increase in transactions is mostly related to recovery from the impact of the COVID-19 pandemic, experienced in the prior year.
+Added: These increases were partially offset by the $1.5 million negative impact from temporary restaurant closures, increased discounts and relocations of restaurants in fiscal year 2022.
Restaurant Operating Costs
1 unchanged sentence
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
3 unchanged sentences
28 % 28 % — %
−Removed: The increase in food, beverage, and packaging costs for fiscal year 2021 was primarily due to a $24.1 million increase in food and beverage costs and a $3.5 million increase in packaging costs.
−Removed: This was primarily due to an increase in revenue related to recovery from the COVID-19 pandemic.
−Removed: As a percentage of revenue, the decrease in food, beverage, and packaging costs for fiscal year 2021 was primarily due to the impact of a 3.5% menu pricing increase during fiscal year 2021, as well as the termination of the sweetgreen rewards loyalty program.
+Added: The increase in food, beverage, and packaging costs for fiscal year 2022 was primarily due to a $33.3 million increase in food and beverage costs, a $2.9 million increase in packaging costs and a $0.3 million increase in freight and gas surcharges associated with deliveries from our distribution partners.
+Added: This was primarily due to the 67 Net New Restaurant Openings during fiscal years 2021 and 2022, as well as higher charges on some of our key ingredients due to supply chain disruptions.
+Added: As a percentage of revenue, food, beverage, and packaging costs for fiscal year 2022 remained consistent with the prior year.
+Added: This was primarily due to our menu pricing increases, offset by continued inflationary pressures, higher freight-related surcharges and increased pricing on some of our key ingredients due to supply chain disruptions.
Labor and Related Expenses
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
3 unchanged sentences
31 % 32 % (1 %)
−Removed: The increase in labor and related expenses for fiscal year 2021 was primarily due to an increase in staffing expenses across all restaurant locations.
+Added: The increase in labor and related expenses for fiscal year 2022 was primarily due to an increase in staffing expenses across all of our markets.
This was mostly due to the 67 Net New Restaurant Openings during fiscal years 2021 and 2022.
−Removed: The increase was also due to lower headcount during fiscal year 2020, partially as a result of the furloughs associated with our cost restructuring plan implemented during that period in response to the COVID-19 pandemic, an increase in prevailing wage rates across the country in fiscal year 2021 and an increase in bonus expense, including a non-recurring retention bonus during the fourth quarter, as we focused on employee retention in fiscal year 2021.
−Removed: As a percentage of revenue, the decrease in labor and related expenses for fiscal year 2021 was primarily due to greater sales leverage associated with the recovery from the COVID-19 pandemic and the impact of a 3.5% menu pricing increase in fiscal year 2021, partially offset by the increases noted above.
+Added: The increase was also due to an increase in prevailing wage rates in many of our markets as a result of continued wage rate inflation in the industry and an increase in bonus expense, including a non-recurring retention bonus paid during the first quarter of fiscal year 2022, as we focus on employee retention.
+Added: Tab le o f Contents
+Added: As a percentage of revenue, the decrease in labor and related expenses for fiscal year 2022 was primarily due to the impact of menu price increases, described above, greater sales leverage associated with the recovery from the COVID-19 pandemic and simplification of our operating model, partially offset by an increase in prevailing wages as a result of continued wage rate inflation in the industry.
Occupancy and Related Expenses
Certain prior period financial information has been reclassified, specifically related to repairs and maintenance and utilities, to conform with the current presentation of other restaurant operating costs within the consolidated statement of operations.
−Removed: As a result of the change, we recorded a $14.3 million and $11.5 million rec lassification from other occupancy and related expenses to other restaurant operating costs for fiscal years 2021 and 2020, respectively.
+Added: As a result of the change, we recorded a $19.8 million and $14.3 million reclassification from other occupancy and related expenses to other restaurant operating costs for fiscal years 2022 and 2021, respectively.
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
3 unchanged sentences
10 % 11 % (1 %)
−Removed: The increase in occupancy and related expenses for fiscal year 2021 was due to increases in rent, common area maintenance and real estate taxes primarily related to the 46 Net New Restaurant Openings
−Removed: during fiscal years 2020 and 2021.
−Removed: These increases were partially offset by COVID-19 related rent abatement received for multiple restaurant locations during fiscal year 2021.
−Removed: As a percentage of revenue, the decrease in occupancy and related expenses for fiscal year 2021 was primarily due to greater sales leverage associated with the recovery from the COVID-19 pandemic, as well as the impact of the rent abatement received for multiple restaurant locations during fiscal year 2021, and the impact of a 3.5% menu pricing increase in fiscal year 2021.
+Added: The increase in occupancy and related expenses for fiscal year 2022 was primarily due to the 67 Net New Restaurant Openings during fiscal years 2021 and 2022.
+Added: Further, the increase was also impacted by higher COVID-19 related rent abatement received for multiple restaurant locations during fiscal year 2021.
+Added: As a percentage of revenue, the decrease in occupancy and related expenses for fiscal year 2022 was primarily due to the impact of menu pricing increases discussed above and greater sales leverage associated with the recovery from the COVID-19 pandemic, partially offset by higher rent abatement received for multiple restaurant locations during fiscal year 2021.
Other Restaurant Operating Costs
Certain prior period financial information has been reclassified, specifically related to repairs and maintenance and utilities, to conform with the current presentation of other restaurant operating costs within the consolidated statement of operations.
−Removed: As a result of the change, we recorded a $14.3 million and $11.5 million rec lassification from other occupancy and related expenses to other restaurant operating costs for fiscal years 2021 and 2020, respectively.
+Added: As a result of the change, we recorded a $19.8 million and $14.3 million reclassification from other occupancy and related expenses to other restaurant operating costs for fiscal years 2022 and 2021, respectively.
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
3 unchanged sentences
17 % 18 % (1 %)
−Removed: The increase in other restaurant operating costs for fiscal year 2021 was primarily due to a $5.2 million increase in delivery fees due to the growth of our Native Delivery and Marketplace Channels, a $2.8 million increase in utilities and repairs and maintenance costs related to Net New Restaurant Openings, a $2.5 million increase in credit card and online related processing fees related to the increases in revenue and a $1.8 million increase in kitchen, cleaning and related supplies to support the Net New Restaurant Openings described above.
−Removed: As a percentage of revenue, the decrease in other restaurant operating costs during fiscal year 2021 was primarily due to greater sales leverage associated with the recovery from the COVID-19 pandemic and the impact of a 3.5% menu pricing increase in fiscal year 2021.
+Added: The increase in other restaurant operating costs for fiscal year 2022 was primarily due to a $4.8 million increase in delivery fees due to the growth of our Native Delivery and Marketplace Channels, a $2.6 million increase in credit card and online related processing fees related to the increases in revenue, a $0.8 million increase in marketing related costs and a $0.7 million increase in office systems related expense.
+Added: Additionally, there was a $6.3 million increase in real estate taxes, utilities and repair and maintenance expenses, and a $4.0 million increase in kitchen, cleaning and related supplies to support the Net New Restaurant Openings described above.
+Added: As a percentage of revenue, the decrease in other restaurant operating costs during fiscal year 2022 was primarily due to the impact of menu pricing increases discussed above and greater sales leverage associated with the recovery from the impact of the COVID-19 pandemic.
+Added: Tab le o f Contents
Operating Expenses
1 unchanged sentence
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
3 unchanged sentences
40 % 37 % 3 %
−Removed: The increase in general and administrative expenses for fiscal year 2021 was primarily due to a $24.0 million increase in stock-based compensation expense, including $5.4 million of stock-based compensation expense related to previously issued performance-based stock options, which vested upon our IPO.
−Removed: We incurred increased expenses of approximately $2.5 million as we transitioned to operating as a public company, consisting of $1.1 million of higher accounting-related fees, $1.0 million increase in directors & officers liability insurance costs and approximately $0.4 million increase in operational consulting.
−Removed: As we continued to focus on our continued growth, we incurred an increase of $1.9 million in office systems.
−Removed: In addition, we incurred a non-recurring $1.8 million expense related to the acquisition of Spyce (see Note 6 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K).
−Removed: Finally, there was a $3.2 million increase in management bonus, a $0.5 million increase related to R&D development for Spyce and a $0.3
−Removed: million increase in referral bonuses as we focus on obtaining talent.
−Removed: These increases were partially offset by a $2.5 million decrease in COVID-19 related employee support costs, a $2.3 million decrease in severance
−Removed: related costs due to the COVID-19 pandemic, a $1.6 million decrease in incremental costs incurred related to store closures and store damage from civil unrest, and a $1.9 million decline in management salaries and benefits.
−Removed: As a percentage of revenue, the decrease in general and administrative expenses was primarily due to the comparatively higher revenue in fiscal year 2021, partially offset by the increases noted above.
+Added: The increase in general and administrative expenses for fiscal year 2022 was primarily due to a $49.8 million increase in stock-based compensation expense, primarily related to restricted stock units and performance-based restricted stock units issued prior to our IPO.
+Added: We incurred a $5.4 million increase of expense related to our investment in Spyce (see Note 6 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K) of which $6.6 million was related to an increase in research and development, partially offset by $1.2 million in non-recurring acquisition related costs.
+Added: Additionally, we had an increase of approximately $4.2 million as we transitioned to operating as a public company, consisting of a $2.8 million increase in directors and officers liability insurance costs, $0.9 million of higher accounting-related fees and a $0.5 million increase in public company office systems.
+Added: Included within public company office systems is $0.2 million of expense related to the amortization of costs associated with the implementation of our cloud computing arrangement in relation to our new ERP, which was implemented during fiscal year 2022.
+Added: Additionally, we had a $3.1 million increase in marketing and advertising costs, and a $2.9 million increase in office systems as we continue to focus on growth and scalability, a $2.0 million increase in legal expense, of which $1.7 million was related to the implementation of ASC 842, a $1.3 million increase in our restaurant training program, a $1.1 million increase in travel and related expenses as we continue to open new stores, and a $0.8 million increase in rent.
+Added: These costs were partially offset by a $7.0 million decrease in salaries and benefits, including reduced bonus for employees at the Sweetgreen Support Center, a $0.6 million decrease in operational consulting, a $0.3 million decrease in our referral bonus program and a decrease of $0.4 million in other general and administrative costs.
+Added: As a percentage of revenue, general and administrative expenses for fiscal year 2022 increased from fiscal year 2021 due to the increases noted above, primarily driven by higher stock-based compensation expense.
Depreciation and Amortization
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
3 unchanged sentences
10 % 10 % — %
−Removed: The increase in depreciation and amortization for fiscal year 2021 was primarily due to the 46 Net New Restaurant Openings during fiscal years 2020 and 2021, and an increase of internally developed software to support our digital growth.
−Removed: As a percentage of revenue, the decrease in depreciation and amortization for fiscal year 2021 was primarily due to comparatively higher revenue in fiscal year 2021, partially offset by the increases noted above.
+Added: The increase in depreciation and amortization for fiscal year 2022 was primarily due to the 67 Net New Restaurant Openings during fiscal years 2021 and 2022.
+Added: As a percentage of revenue, depreciation and amortization for fiscal year 2022 was flat compared to fiscal year 2021, primarily due to comparatively higher revenue in fiscal year 2022, offset by the increases noted above.
+Added: Tab le o f Contents
Pre-Opening Costs
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
2 unchanged sentences
As a percentage of total revenue
+Added: 2 % 3 % (1 %)
The increase in pre-opening costs for fiscal year 2022 was primarily due to the 36 Net New Restaurant Openings during fiscal year 2022, as compared to 31 Net New Restaurant Openings during fiscal year 2021.
−Removed: As a percentage of revenue, pre-opening costs increased as a percentage of total revenue in fiscal year 2021 compared to fiscal year 2020, due to the increased number of Net New Restaurant Openings, discussed above.
+Added: As a percentage of revenue, pre-opening costs decreased as a percentage of total revenue in fiscal year 2022 compared to fiscal year 2021, due to comparatively higher revenue in fiscal year 2022, partially offset by the increases in costs noted above.
Impairment and Closure Costs
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
2 unchanged sentences
As a percentage of total revenue
−Removed: During fiscal year 2021, we recorded non-cash impairment charges of $4.4 million related to our stores, as well as the two stores operated by Spyce.
−Removed: During fiscal year 2020, we recorded non-cash impairment charges of $1.5 million related to one restaurant in New York City.
−Removed: The COVID-19 pandemic, and most recently the Delta and Omicron variants, have had a negative impact on our assumptions for future near-term restaurant-level cash flows, which resulted in elevated impairment charges.
+Added: During fiscal year 2022, we recognized non-cash impairment charges of $2.0 million related to the property and equipment of three of our restaurants, and non-cash impairment charges of $0.4 million related to the operating lease assets of three of our restaurants, as well as $0.1 million of closure costs related to one store previously operated by Spyce.
+Added: During fiscal year 2021, we recorded non-cash impairment charges of $4.4 million related to certain of our stores, as well as the two stores operated by Spyce.
During fiscal year 2021, we closed one store operated by Spyce, which was fully impaired during 2021.
2 unchanged sentences
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
2 unchanged sentences
As a percentage of total revenue
−Removed: The decrease in loss on disposal of property and equipment is due to a decrease in furniture, equipment and fixture replacements in fiscal year 2021 as compared to fiscal year 2020, as our focus has been on opening new restaurants.
+Added: The increase in loss on disposal of property and equipment is due to an increase in furniture, equipment and fixture replacements in fiscal year 2022 as compared to fiscal year 2021.
+Added: Tab le o f Contents
+Added: Restructuring charges
+Added: Fiscal Year Ended
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
+Added: 2021 Percentage
+Added: Restructuring charges
+Added: $ 14,442 $ — N/A
+Added: As a percentage of total revenue
+Added: During fiscal year 2022, we implemented the Plan to manage operating expenses at our Sweetgreen Support Center, and incurred total pre-tax restructuring and related charges of approximately $14.4 million.
+Added: This included a $13.0 million non-cash restructuring expense, due to a reduction of our real estate footprint by vacating the premises of the existing Sweetgreen Support Center and moving to a smaller office space adjacent to the existing location, of which $6.8 million related to impairment of the long-lived assets, $5.8 million and $0.4 million related to impairment of our operating lease asset and closure costs, respectively, associated with the Sweetgreen Support Center, $0.6 million of severance and related benefits from workforce reductions affecting approximately 5% of employees at the Sweetgreen Support Center, $0.6 million of costs related to abandoning certain potential future restaurant sites in an effort to streamline our future new restaurant openings, and $0.2 million of other related expenses.
Interest Income and Interest Expense
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
6 unchanged sentences
As a percentage of total revenue
−Removed: The decrease in interest income is primarily due to lower average cash balances during fiscal year 2021 prior to our IPO as compared to fiscal year 2020.
+Added: The increase in interest income, net was primarily due to higher interest rates on our money market accounts during fiscal year 2022, as well as higher average cash balances throughout the year.
Other Expense
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
2 unchanged sentences
As a percentage of total revenue
−Removed: The increase in other expense is primarily due to an increase in the fair value of our preferred warrant liability, which was calculated at the date of our IPO based on the IPO price of $28.00 per share.
+Added: — % 6 % (6 %)
+Added: The decrease in other expense is primarily due to an increase in the fair value of our preferred warrant liability in fiscal year 2021, which was calculated at the date of our IPO based on the IPO price of $28.00 per share.
Subsequent to the IPO, the fair value of our preferred warrant liability was reclassified to additional paid-in capital (“APIC”) and will not be a recurring expense.
−Removed: The increase in other expense was also impacted by an increase in the fair value of our contingent consideration, which was issued as part of the Spyce acquisition, and will continue to impact other expense until the performance conditions associated with milestones for additional shares of Class A common stock are met or expire.
+Added: The decrease in other expense was offset by an increase in the fair value of our contingent consideration, which was issued as part of the Spyce acquisition, and will continue to impact other expense until the performance conditions associated with milestones for additional shares of Class A common stock are met or expire.
Income Tax Expense
+Added: Tab le o f Contents
Fiscal Year Ended
−Removed: (dollar amounts in thousands)
−Removed: December 26, 2021 December 27,
+Added: (dollar amounts in thousands) December 25, 2022 December 26,
2021 Percentage
Income tax expense
−Removed: $ 147 $ — N/A
−Removed: As a percentage of total revenue
−Removed: Our effective tax rate for the year ended December 26, 2021 and December 27, 2020 (0.1%) and 0.0%, respectively, primarily due to the full valuation allowance on our net deferred tax assets.
−Removed: Non-GAAP Financial Measures
−Removed: In addition to our consolidated financial statements, which are presented in accordance with GAAP, we present certain non-GAAP financial measures, including Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin.
−Removed: We believe these measures are useful to investors and others in evaluating our performance because these measures:
−Removed: • facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies.
−Removed: These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or NOL), and the age and book depreciation of facilities and equipment (affecting relative depreciation expense);
−Removed: • are widely used by analysts, investors, and competitors to measure a company’s operating performance;
−Removed: are used by our management and board of directors for various purposes, including as measures of performance, as a basis for strategic planning and forecasting;
−Removed: • are used internally for a number of benchmarks including to compare our performance to that of our competitors .
−Removed: We define Restaurant-Level Profit as loss from operations adjusted to exclude general and administrative expense, depreciation and amortization, pre-opening costs, loss on disposal of property and equipment, and in certain periods, impairment and closure costs, and restructuring charges.
−Removed: Restaurant-Level Profit Margin is Restaurant-Level Profit as a percentage of revenue.
−Removed: As it excludes general and administrative expense, which is primarily attributable to our sweetgreen Support Center, we evaluate Restaurant-Level Profit and Restaurant-Level Profit Margin as a measure of profitability of our restaurants.
−Removed: We define Adjusted EBITDA as net loss adjusted to exclude interest income, interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, loss on disposal of property and equipment, Spyce acquisition costs, amortization of cloud-based software implementation costs, other expense, and in certain periods, impairment and closure costs, and restructuring charges.
−Removed: Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.
−Removed: Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.
−Removed: In particular, Restaurant-Level Profit and Adjusted EBITDA should not be viewed as substitutes for, or superior to, loss from operations or net loss prepared in accordance with GAAP as a measure of profitability.
−Removed: Some of these limitations are:
−Removed: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Restaurant-Level Profit and Adjusted EBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
−Removed: • Restaurant-Level Profit and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
−Removed: • Restaurant-Level Profit and Adjusted EBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
−Removed: • Restaurant-Level Profit and Adjusted EBITDA do not consider the potentially dilutive impact of stock-based compensation;
−Removed: • Restaurant-Level Profit is not indicative of overall results of the Company and does not accrue directly to the benefit of stockholders, as corporate-level expenses are excluded;
−Removed: • Adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as stock-based compensation, loss on disposal of property and equipment, Spyce acquisition costs, amortization of cloud-based software implementation costs, certain other expenses, and, in certain periods, impairment and closure costs, and restructuring charges;
−Removed: • other companies, including those in our industry, may calculate Restaurant-Level Profit and Adjusted EBITDA differently, which reduces their usefulness as comparative measures.
−Removed: Because of these limitations, you should consider Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, loss from operations, net loss, and our other GAAP results.
−Removed: The following table sets forth a reconciliation of our loss from operations to Restaurant-Level Profit, as well as the calculation of loss from operations margin and Restaurant-Level Profit Margin for each of the periods indicated :
−Removed: Fiscal Year Ended
−Removed: (dollar amounts in thousands
−Removed: December 25, 2022
−Removed: December 26, 2021
−Removed: December 27, 2020
−Removed: Loss from operations $ (193,337) $ (134,399) $ (141,593)
−Removed: General and administrative 187,367 125,040 99,142
−Removed: Depreciation and amortization 46,471 35,549 26,851
−Removed: Pre-opening costs 11,523 9,193 4,551
−Removed: Impairment and closure costs 2,542 4,915 1,456
−Removed: Loss on disposal of property and equipment (1)
−Removed: Restructuring charges (2)
−Removed: Restaurant-Level Profit
$ 1,345 $ 147 815 %
−Removed: Loss from operations margin
−Removed: (41) % (40) % (64) %
−Removed: Restaurant-Level Profit Margin
−Removed: 15 % 12 % (4) %
−Removed: (1) Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment.
−Removed: (2) Restructuring charges are expenses that are paid in connection with reorganization of our operations.
−Removed: These costs primarily include a non-cash impairment and closure costs, due to a reduction of our real estate footprint by vacating the premises of our existing sweetgreen Support Center and moving to a smaller office space adjacent to its existing location, expenses from workforce reductions affecting approximately 5% of employees at our sweetgreen Support Center, and contract termination costs, related to streamlining our future new restaurant openings.
−Removed: The following table sets forth a reconciliation of our net loss to Adjusted EBITDA, as well as the calculation of net loss margin and Adjusted EBITDA Margin for each of the periods indicated:
−Removed: Fiscal Year Ended
−Removed: (dollar amounts in thousands
−Removed: December 25, 2022
−Removed: December 26, 2021
−Removed: December 27, 2020
−Removed: Net loss $ (190,441) $ (153,175) $ (141,224)
−Removed: Non-GAAP adjustments:
−Removed: Income tax expense
−Removed: Interest income (5,143) (450) (1,018)
−Removed: Interest expense 83 87 404
−Removed: Depreciation and amortization 46,471 35,549 26,851
−Removed: Stock-based compensation (1)
−Removed: 78,736 28,897 4,912
−Removed: Loss on disposal of property and equipment (2)
−Removed: Impairment and closure costs (3)
−Removed: 2,542 4,915 1,456
−Removed: Other expense (4)
−Removed: 819 18,992 245
−Removed: Spyce acquisition costs (5)
−Removed: Restructuring charges (6)
−Removed: ERP implementation and related costs (7)
−Removed: Adjusted EBITDA
−Removed: $ (49,934) $ (63,099) $ (107,483)
−Removed: Net loss margin
−Removed: (41) % (45) % (64) %
−Removed: Adjusted EBITDA Margin
−Removed: (11) % (19) % (49) %
−Removed: (1) Includes non-cash, stock-based compensation.
−Removed: (2) Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment.
−Removed: (3) Includes costs related to impairment of long-lived and operating lease assets and store closures.
−Removed: (4) Other expense includes the change in fair value of the contingent consideration and the change in fair value of the warrant liability.
−Removed: For additional information, see Notes 1 and 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
−Removed: (5) Spyce acquisition costs includes one-time costs we incurred in order to acquire Spyce including, severance payments, retention bonuses, and valuation and legal expenses.
−Removed: For additional information, see Note 6 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
−Removed: (6) Restructuring charges are expenses that are paid in connection with reorganization of our operations.
−Removed: These costs primarily included non-cash expenses related to reducing our real estate footprint by vacating the premises of our existing sweetgreen Support Center and moving to a smaller office space adjacent to the existing location.
−Removed: See Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
−Removed: (7) Represents the amortization costs associated to the implementation from our cloud computing arrangements in relation to our new ERP.
+Added: As a percentage of total revenue
+Added: Our effective tax rate for the fiscal years ended 2022 and 2021 was (1.2%) and (0.1%), respectively, primarily due to the full valuation allowance on our net deferred tax assets
Liquidity and Capital Resources
2 unchanged sentences
Additionally, in November 2021, we completed our IPO, from which we received net proceeds of $384.7 million from sales of our shares of Class A common stock, after deducting underwriting discounts and commissions and offering expenses.
−Removed: As of December 25, 2022 and December 26, 2021, we had $331.6 million and $472.0 million in cash and cash equivalents, respectively.
−Removed: As of December 25, 2022 , we had access to a $44.1 m illion revolver loan(s) under our 2020 Credit Agreement after giving effect to a $950,000 irrevocable standby Letter of Credit outstanding thereunder and there have been no revolving loan draws under the facility.
+Added: As of December 31, 2023 and December 25, 2022, we ha d $257.2 million and $331.6 million in cash and cash equivalents, respectively.
+Added: As of December 31, 2023 , we had access to a $43.1 million revolver l oan(s) under our 2020 Credit Agreement after giving effect to a $1,945,000 irrevocable standby Letter of Credit outstanding thereunder.
+Added: As of December 31, 2023 there have been no draws on the revolving facility.
Based on our current operating plan, we believe our existing cash and cash equivalents and access to available revolving loan(s), will be sufficient to fund our operating lease obligations, capital expenditures, and working capital needs for at least the next 12 months.
1 unchanged sentence
If we are unable to generate positive operating cash flows, additional debt and equity financings may be necessary to sustain future operations, and there can be no assurance that such financing will be available to us on commercially reasonable terms, or at all.
−Removed: Our primary liquidity and capital requirements are for new restaurant development, initiatives to improve the customer experience in our restaurants, working capital and general corporate needs.
+Added: Our primary liquidity and capital requirements are for new restaurant development, initiatives to improve the customer experience in our restaurants, research and development costs, marketing-related costs, working capital and general corporate needs.
+Added: During the fiscal year ended December 31, 2023, we made a cash payment of approximately $10.4 million related to the true-up payment relating to the upfront portion of the purchase price from our acquisition of Spyce.
+Added: See Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.
+Added: Additionally, subsequent to year end we made a cash payment of approximately $3.9 million related to the Spyce milestone payment, which is currently included within contingent consideration in our consolidated balance sheets for the fiscal year ended December 31, 2023 .
+Added: See Note 17 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.
We have not required significant working capital because customers generally pay using cash or credit and debit cards and, as a result, our operations do not require significant receivables.
5 unchanged sentences
$ 402,304 $ 55,956 $ 56,123 $ 55,048 $ 50,928 $ 45,132 $ 139,117
−Removed: Purchase obligations (1)
−Removed: $ 6,819 $ 6,819 $ — $ — $ — $ — $ —
(1) See Note 9 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Note 9 includes commitments related to operating leases for which we have not yet taken possession and reasonably certain renewal periods.
−Removed: (2) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms.
−Removed: The majority of our purchase obligations relate to amounts owed for supplies within our restaurants.
Credit Facility
−Removed: On December 14, 2020, we entered into a First Amended and Restated Revolving Credit, Delayed Draw Term Loan and Security Agreement (as subsequently amended, as discussed below, the “2020 Credit Facility”) with EagleBank.
+Added: On December 14, 2020, we entered into a First Amended and Restated Revolving Credit, Delayed Draw Term Loan and Security Agreement (as subsequently amended, as discussed below, the “2020 Credit Facility”) with
+Added: Tab le o f Contents
The 2020 Credit Facility superseded our 2017 revolving credit facility with EagleBank and allows us to borrow (i) up to $35.0 million (subsequently increased to $45.0 million) in the aggregate principal amount under the refinanced revolving facility and (ii) up to $10.0 million in the aggregate principal amount under a delayed draw term loan facility which expired on December 14, 2021 and which was never drawn on.
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On December 13, 2022, we and Eagle Bank amended the 2020 Credit Facility to extend the maturity date from December 14, 2022 to December 13, 2024.
−Removed: The amendment also increased the revolving facility cap by $10.0 million, to allow for the Company to borrow up to $45.0 million in the aggregate principal amount under the refinanced revolving facility.
−Removed: After the recent amendment on December 13, 2022, under the 2020 Credit Facility, interest accrues on the outstanding loan balance and is payable monthly at a rate of the adjusted one-month term SOFR, plus 2.90%, with a floor on the interest rate at 3.75%.
−Removed: Prior to such amendment, interest accrued on the outstanding loan balance and was based on the adjusted one-month London InterBank Offered Rate.
+Added: The amendment also increased the revolving facility cap by $10.0 million, to allow for us to borrow up to $45.0 million in the aggregate principal amount under the refinanced revolving facility.
+Added: On April 26, 2023, we and Eagle Bank further amended the 2020 Credit Facility to allow for an increase to the issuance of Letters of Credit of up to $3.5 million.
+Added: In connection therewith, we increased our irrevocable standby Letter of Credit with Eagle Bank to $1.95 million, with The Travelers Indemnity Company as the beneficiary in connection with our workers’ compensation insurance policy.
+Added: This replaced the previous amendment dated May 9, 2022.
+Added: Under the 2020 Credit Facility, interest accrues on the outstanding loan balance and is payable monthly at a rate of the adjusted one-month term Secured Overnight Financing Rate, plus 2.90%, with a floor on the interest rate at 3.75%.
As of December 31, 2023 and December 25, 2022, we had no outstanding balance under the 2020 Credit Facility.
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Fiscal Year Ended
−Removed: (in thousands)
−Removed: December 25, 2022
−Removed: December 26, 2021
−Removed: December 27, 2020
−Removed: Net cash used in operating activities
+Added: (in thousands) December 31, 2023 December 25, 2022 December 26, 2021
+Added: Net cash provided by (used in) operating activities
26,480 (43,169) (64,529)
1 unchanged sentence
(95,665) (102,023) (97,548)
−Removed: Net cash provided by financing activities
+Added: Net cash (used in) provided by financing activities
(5,199) 4,632 531,611
2 unchanged sentences
Operating Activities
+Added: For fiscal year 2023, cash provided by (used in) operating activities increased $69.6 million compared to fiscal year 2022, primarily due to a $54.1 million reduction in loss after excluding non-cash items, a $15.6 million
+Added: Tab le o f Contents
+Added: favorable working capital fluctuation, which is primarily related to the timing of payroll and other payments in the ordinary course of business, and a $3.4 million receipt of our ERC.
For fiscal year 2022, cash used in operating activities decreased $21.4 million compared to fiscal year 2021, primarily due to a $25.8 million reduction in loss after excluding non-cash items, partially offset by $4.4 million of unfavorable working capital fluctuation.
−Removed: The unfavorable working capital fluctuations were due to a $11.1 million increase in cash outflow primarily related to timing of accrued payroll and benefits, including payment of deferred social security taxes, timing of rent payments previously deferred as part of COVID negotiations with landlords, timing of payment of legal settlements, and timing of payments in the ordinary course of business.
+Added: The unfavorable working capital fluctuations were due to an $11.1 million increase in cash outflow primarily related to timing of accrued payroll and benefits, including payment of deferred social security taxes, timing of rent payments previously deferred as part of COVID negotiations with landlords, timing of payment of legal settlements, and timing of payments in the ordinary course of business.
These unfavorable fluctuations were partially offset by increased collection of our tenant improvement receivables.
−Removed: For fiscal year 2021 , cash used in operating activities decreased $25.8 million compared to fiscal year 2020, primarily due to a $42.2 million reduction in loss after excluding non cash items, resulting primarily from the adverse impact of the COVID-19 pandemic in fiscal year 2020, partially offset by $16.5 million unfavorable working capital fluctuations.
−Removed: The unfavorable working capital fluctuations in fiscal year 2021 were due to a $10.8 million increase in cash outflow primarily related to timing of payments of delivery fees, rent payments previously deferred as part of COVID negotiations with landlords and timing of delivery fee payments.
−Removed: In addition, we had an increase of $8.4 million related to prepaid balances, primarily due to director & officer and other insurance policies required due to the Company transition to a public company and continued growth, prepaid retention payments, and timing of payments in the normal course of business.
−Removed: These unfavorable fluctuations were partially offset by an increase in accrued bonus and deferred rent, due to the increase in new restaurant openings.
Investing Activities
−Removed: For fiscal year 2022, cash used in investing activities increased $4.5 million compared to fiscal year 2021, primarily due to purchases of property and equipment of $96.9 million for 36 Net N ew Restaurant Openings during fiscal year 2022, compared to $84.5 million for 31 Net New Restaurant Openings in fiscal year 2021.
−Removed: The increase was offset by a decrease in cash outflow of $2.9 million related to the purchase of intangible assets and $3.3 million related to the acquisition of Spyce in fiscal year 2021.
−Removed: For additional information regarding our acquisition of Spyce, see Note 6 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
−Removed: For fiscal year 2021, cash used in investing activities increased $39.1 million compared to fiscal year 2020, primarily due to purchases of property and equipment of $84.5 million for 31 Net New Restaurant Openings during fiscal year 2021, compared to $48.1 million for 15 Net New Restaurant Openings in fiscal year 2020.
−Removed: In addition, we had cash outflow of $3.3 million, net of cash acquired, related to the acquisition of Spyce.
−Removed: For additional information regarding our acquisition of Spyce, see Note 6 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
+Added: For fiscal year 2023, cash used in investing activities was $95.7 million, a decrease of $6.4 million compared to fiscal year 2022.
+Added: Investing activities in fiscal year 2023 consisted primarily of purchases of property and equipment of $89.7 million related to 38 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with the deployment of our Infinite Kitchen and other restaurants related equipment.
+Added: In addition we had cash outflow for fiscal year 2023 of $6.1 million related to purchase of intangible assets.
+Added: For fiscal year 2022, cash used in investing activities was $102.0 million, an increase of $4.5 million compared to fiscal year 2021.
+Added: Investing activities in fiscal year 2022 consisted primarily of purchases of property and equipment of $96.9 million related to 39 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with restaurants related equipment.
+Added: In addition, we had a cash outflow for fiscal year 2022 of $5.4 million related to the purchase of intangible assets.
+Added: For fiscal year 2021, cash used in investing activities was $97.5 million.
+Added: Investing activities in fiscal year 2021 consisted primarily of purchases of property and equipment of $84.5 million related to 31 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with restaurants related equipment.
+Added: In addition, we had a cash outflow for fiscal year 2021 of $8.2 million related to purchase of intangibles assets, $3.3 million, net of cash acquired, related to the acquisition of Spyce and $1.7 million related to lease acquisition costs.
Financing Activities
+Added: For fiscal year 2023, cash (used in) provided by financing activities i ncreased $9.8 million compared to fiscal year 2022, primarily due to the $10.4 million Spyce milestone true-up payment, offset by an in crease in proceeds received from stock option exercises of $0.6 million.
For fiscal year 2022, cash provided by financing activities decreased $527.0 million compared to fiscal year 2021, primarily due to net proceeds of $384.7 million from sales of our shares in the IPO received in fiscal year 2021, after deducting underwriting discounts and commissions and offering expenses and proceeds received from the issuance of preferred stock, net of issuance cost, of $113.8 million.
In addition, in fiscal year 2022 there was a decrease in proceeds received from stock option and warrant exercises of $21.3 million and a decrease in proceeds received from the repayment of previously issued related party loans of $5.2 million.
−Removed: For additional information, see Note 15 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
−Removed: For fiscal year 2021, cash provided by financing activities increased $529.5 million compared to fiscal year 2020, primarily due to net proceeds of $384.7 million from sales of our shares in the IPO, after deducting underwriting discounts and commissions and offering expenses and proceeds received from the issuance of preferred stock, net of issuance cost, of $113.8 million.
−Removed: In addition, there was an increase in proceeds received from stock option and warrant exercises of $25.8 million and an increase in proceeds received from the repayment of previously issued related party loans of $5.2 million in fiscal year 2021.
−Removed: Off-balance sheet arrangements
−Removed: Our material off-balance sheet arrangements are operating lease obligations.
−Removed: We excluded these items from the balance sheet in accordance with GAAP.
−Removed: For additional information, including the anticipated impacts of our adoption of new accounting standards affecting accounting for leases, see Note 1 and Note 9 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Critical Accounting Estimates
1 unchanged sentence
These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period.
−Removed: Our most significant estimates and judgments involve difficult, subjective, or complex judgements made by management.
+Added: Our most significant estimates and judgments involve
+Added: Tab le o f Contents
+Added: difficult, subjective, or complex judgements made by management.
Actual results may differ from these estimates.
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As we have no outstanding debt, we estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment.
−Removed: estimate of our incremental borrowing rate was changed, our operating lease assets and liabilities could differ materially.
+Added: If the estimate of our incremental borrowing rate was changed, our operating lease assets and liabilities could differ materially.
Stock-Based Compensation
12 unchanged sentences
• Expected Term —The expected term of options granted to employees was determined based on management’s expectations of the options granted, which are expected to remain outstanding.
−Removed: The expected term for options granted to nonemployees is equal to the remaining contractual life of the options.
+Added: Tab le o f Contents
+Added: expected term for options granted to nonemployees is equal to the remaining contractual life of the options.
Where appropriate, we calculated the expected term using the simplified method for “plain vanilla” stock option awards.
9 unchanged sentences
Estimating the grant date fair value of the common stock underlying RSU grants prior to our IPO was highly judgmental due to the lack of an observable market for our common stock.
−Removed: Prior to our IPO, the fair value of the Company’s common stock was determined by considering a number of objective and subjective factors
+Added: Prior to our IPO, the fair value of the Company’s common stock was determined by considering a number of objective and subjective factors including:
contemporaneous third-party valuations of our common stock, sales of our redeemable convertible preferred stock to outside investors in arms-length transactions (including our IPO), the Company’s operating and financial performance, the lack of marketability, and the general and industry-specific economic outlook, amongst other factors.
12 unchanged sentences
We estimated the grant date fair value of the founder PSUs using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the stock price goals may not be satisfied.
−Removed: A Monte Carlo simulation model requires the use of various assumptions, including the underlying stock price, volatility, expiration term, and the risk-free interest rate as of the valuation date, corresponding to the length of time remaining in the performance period, and expected dividend yield.
+Added: A Monte Carlo simulation model requires the use of various assumptions, including the underlying stock price, volatility, expiration term, and the risk-free interest rate as of the valuation date, corresponding to the length of time remaining in the performance period,
+Added: Tab le o f Contents
+Added: and expected dividend yield.
The derived service period calculation also requires the cost of equity assumption to be used in the Monte Carlo simulation model.
4 unchanged sentences
Had we arrived at different assumptions of underlying stock price or volatility our stock-based compensation expense and results of operations may be materially different.
−Removed: During fiscal year 2022, we recorded $78.7 million of stock-based compensation expense.
+Added: During fiscal year 2023, we recor ded $49.5 million of stock-based compensation expense.
During fiscal year 2022, we recorded $78.7 million of stock based compensation expense.
19 unchanged sentences
The assumptions underlying these valuations represent our board of directors’ best estimates at the time they were made, which involve inherent uncertainties and the application of the judgment of our board of directors.
+Added: Tab le o f Contents
As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation expense could be materially different.
11 unchanged sentences
A number of significant assumptions and estimates are involved in the application of the model to forecast operating cash flows, which are largely unobservable inputs and, accordingly, are classified as Level 3 inputs within the fair value hierarchy.
−Removed: Assumptions used in these forecasts are consistent with internal planning, and include revenue growth rates, gross margins, and operating expense in relation to the current economic environment and our incremental borrowing rate, future expectations,
−Removed: competitive factors in its various markets, inflation, revenue trends and other relevant economic factors that may impact the store under evaluation.
+Added: Assumptions used in these forecasts are consistent with internal planning, and include revenue growth rates, gross margins, and operating expense in relation to the current economic environment and our incremental borrowing rate, future expectations, competitive factors in its various markets, inflation, revenue trends and other relevant economic factors that may impact the store under evaluation.
Any material changes in the sum of our undiscounted cash flow estimates resulting from different assumptions used as of December 31, 2023 for those store asset groups included in our evaluation could result in a material change in the long-lived asset impairment charge for fiscal year 2023.
2 unchanged sentences
At this time, we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that we use to calculation our impairment charge.
−Removed: The Company recorded non-cash impairment charges of $15.0 million during the fiscal year ended December 25, 2022.
−Removed: The amount of impairment charges related to the vacated sweetgreen Support Center’s property and equipment and operating lease assets was $6.8 million and $5.8 million, respectively, and was recorded in restructuring charges within the consolidated statement of operations.
+Added: The Company recorded non-cash impairment charges of $4.3 million and $15.0 million during the fiscal years ended December 31, 2023 and December 25, 2022.
+Added: During the fiscal year ended December 31, 2023, the entire $4.3 million balance was related to the operating lease asset for the Company’s former Sweetgreen Support Center previously vacated during fiscal year 2022, and was recorded under restructuring charges within the consolidated statement of operations.
+Added: During the fiscal year ended December 25, 2022, the amount of impairment charges related to the vacated Sweetgreen Support Center’s property and equipment and operating lease assets was $6.8 million and $5.8 million, respectively, and was recorded in restructuring charges within the consolidated statement of operations.
The amount of impairment associated with certain store locations' property and equipment and operating lease assets was $2.0 million and $0.4 million, respectively, and was recorded in impairment and closure costs within the consolidated statement of operations.
4 unchanged sentences
The replacement cost method requires us to make various assumptions and estimates including level of workforce and time required to recreate existing technology, projected overhead, profit margins, and opportunity costs.
−Removed: Intangible assets are amortized over their estimated useful lives using the straight-line method which approximates the pattern in which the economic benefits are consumed.
+Added: Tab le o f Contents
+Added: assets are amortized over their estimated useful lives using the straight-line method which approximates the pattern in which the economic benefits are consumed.
Contingent Consideration
4 unchanged sentences
The initial fair value of the liability for the contingent consideration was $16.4 million and was included as part of the purchase price for the Spyce acquisition.
−Removed: The contingent consideration as of December 25, 2022 and December 26, 2021 was $21.3 million and $20.5 million, respectively.
+Added: The contingent consideration as of December 31, 2023 and December 25, 2022 wa s $8.4 million a nd $21.3 million, respectively.
+Added: Additionally, we recorded the current portion of the contingent consideration of $6.0 million within other current liabilities in the consolidated balance sheet within this Annual Report on Form 10-K.
Changes in fair value of the contingent consideration are recognized within other expense, net in the accompanying consolidated statement of operations.
1 unchanged sentence
See Note 1 to our audited consolidated financial statements elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this report.
−Removed: Emerging Growth Company Status
−Removed: Based on our aggregate market value of voting stock held by non-affiliates as of June 24, 2022, the last business day of our second fiscal quarter in 2022, we became a “large accelerated filer” and lost emerging
−Removed: growth company status under the Tax Act beginning with this Annual Report on Form 10-K for the year ended December 25, 2022.
−Removed: Therefore, our independent registered public accounting firm is required to provide the attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act in this Annual Report.
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
12 unchanged sentences
These changes could have a negative impact on our commodity prices.
−Removed: For example, in the fourth quarter of fiscal year 2022, as a result of extreme weather conditions, we experienced supply chain disruptions for key ingredients, such as romaine, arugula and tomatoes, which resulted in higher prices for those products or result in temporarily discontinuing those products in certain geographic markets.
+Added: For example, in the fourth quarter of fiscal year 2022, as a result of extreme weather conditions, we experienced supply chain disruptions for key ingredients, such as romaine, arugula and
+Added: Tab le o f Contents
+Added: tomatoes, which resulted in higher prices for those products or result in temporarily discontinuing those products in certain geographic markets.
+Added: Additionally, since the beginning of 2023, we have been experiencing supply chain disruptions for our bowls and plates which has resulted in use of alternative packaging solutions.
We continue to assess the current environment, work with our suppliers and distributors and create certain contingency plans to mitigate any negative impact.
2 unchanged sentences
Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations.
−Removed: As of December 25, 2022 and December 26, 2021, we had $331.6 million and $472.0 million of cash and cash equivalents consisting of bank accounts and money market funds and $0.1 million and $0.3 million of restricted cash relating to certificates of deposit that are collateral for letters of credit to our lease agreements and cash from the Spyce acquisition.
+Added: As of December 31, 2023 and December 25, 2022, we ha d $257.2 million and $331.6 million of cash and cash equivalents, respectively, consisting of bank accounts and money market funds, and $0.1 million and $0.1 million, respectively, o f restricted cash relating to certificates of deposit that are collateral for letters of credit to our lease agreements and cash from the Spyce acquisition.
Interest-earning instruments carry a degree of interest rate risk.
9 unchanged sentences
In addition, there can be no assurance that we will generate positive Same Store Sales Change in an amount sufficient to offset inflationary or other cost pressures.
−Removed: Macroeconomic Risks and the Impact of the COVID-19 Pandemic
−Removed: Current macroeconomic conditions, such as inflation and increasing interest rates, increase the risk of an economic downturn.
−Removed: These macroeconomic conditions also negatively impact consumer discretionary spend and coupled with slower than expected return to office during and following the COVID-19 pandemic, including as a result of many workplaces adopting remote or hybrid models, led to our revenue growth slowing in the latter half of fiscal year 2022 (and much of such revenue regrowth was driven by a price increase taken in the first quarter of fiscal year 2022).
−Removed: Additionally, as a result of continued inflation, we have seen an increase in wage rates and costs of goods sold during fiscal year 2022, which has had a negative impact on our Restaurant Level Profit.
−Removed: In order to mitigate these risks, we have implemented and may in the future have to implement additional cost cutting measures, as described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting our Business”.
+Added: Macroeconomic Risks
+Added: Current macroeconomic conditions, such as inflation and higher interest rates, increase the risk of an economic downturn.
+Added: An economic downturn could increase unemployment and lower consumer confidence.
+Added: Macroeconomic conditions also negatively impact consumer discretionary spending and could negatively impact our Restaurant Level Profit.
+Added: Tab le o f Contents
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.