Tag: Sweetgreen Inc

Stocks making the biggest moves premarket: Intel, Roku, Procter & Gamble and more

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Signage outside Intel headquarters in Santa Clara, California, on Monday, Jan. 30, 2023.

David Paul Morris | Bloomberg | Getty Images

Check out the companies making headlines before the bell.

Intel — Shares popped 6.7% after the chipmaker posted better-than-expected second-quarter results and a return to profitability after two consecutive losing periods. Intel’s forecast for the third quarter also came in above analyst expectations. The company reported adjusted earnings of 13 cents a share on revenues of $12.95 billion.

Roku — The streaming stock rallied nearly 10% after reporting a narrower-than-expected loss for the second quarter. Roku reported a loss of 76 cents a share and revenues of $847 million. Analysts polled by Refinitiv had anticipated a loss of $1.26 per share and $775 million in revenue.

Biogen — Biogen shares moved slightly lower after the biotechnology company said it’s acquiring Reata Pharmaceuticals for $172.50 per share, in a cash deal valued at about $7.3 billion. Shares of Reata soared more than 51% on the news.

Procter & Gamble — The consumer giant saw shares rise more than 1% in premarket trading after the company reported quarterly earnings and revenue that beat analysts’ expectations. However, P&G released a gloomy outlook for its fiscal 2024 sales that fell short of Wall Street’s estimates.

Exxon Mobil — Shares moved slightly lower after the oil stock posted mixed second-quarter results. The company reported earnings of $1.94 a share, excluding items, that fell short of the $2.01 expected by analysts, per Refinitiv. Revenues came in at $82.91 billion, above the expected $80.19 billion.

Chevron — The oil stock lost nearly 1% even after reporting a beat on the top and bottom lines for the second quarter. Earnings fell from a year ago due to a drop in oil prices.

First Solar – Shares soared 12% after the solar company posted earnings per share of $1.59 on revenue of $811 million for the second quarter. Those results beat Wall Street expectations of 96 cents per share on revenue of $721 million, according to Refinitiv. The company also announced plans to invest up to $1.1 billion to build a fifth manufacturing facility in the United States.

Enphase Energy – Shares of Enphase dropped more than 15% after the company posted second-quarter revenue Thursday of $711 million that fell short of analyst estimates of $722 million, according to Refinitiv. The stock also faced a wave of downgrades Friday morning from Deutsche Bank, Wells Fargo and Roth MKM.

Sweetgreen – Shares of the salad chain slid more than 13% after the company posted weak sales that missed Wall Street expectations in the second quarter and a net loss of $27.3 million, or 24 cents per share. Sweetgreen did say it’s aiming to turn a profit for the first time by 2024.

Ford Motor – The automaker said adoption of electric vehicles is going more slowly than the company forecast and that it expects to lose $4.5 billion on the EV business this year, widening losses from roughly $3 billion a year earlier. Otherwise, Ford posted strong quarterly earnings that beat Wall Street expectations and raised its full-year guidance. Shares were flat in premarket trading.

Juniper Networks — Shares of the technology company fell 8% after Juniper’s third-quarter guidance came in lighter than expected. The company said it expects earnings per share between 49 cents and 59 cents, with revenue between $1.34 billion and $1.44 billion. Analysts had penciled in 62 cents per share and $1.48 billion of revenue. The company’s second-quarter results did come in slightly above expectations.

AstraZeneca — U.S. listed shares of the drugmaker added more than 5% before the bell. The U.K.-based company reported second-quarter earnings of $2.15 per share on $11.42 billion in revenue. That surpassed the EPS of $1.95 expected by analysts polled by Refinitiv on revenues of $11.03 billion. AstraZeneca also said it would buy a portfolio of preclinical rare disease gene therapies from Pfizer for up to $1 billion.

Xpeng — The Chinese electric vehicle stock jumped more than 6% in the premarket. Jefferies upgraded shares to a buy from a hold, citing Xpeng’s joint development plan with Volkswagen

New York Community Bancorp — The regional bank stock rose about 2% before the bell after JPMorgan upgraded New York Community Bancorp to an overweight rating from neutral. The Wall Street firm called the company a “massive market share taker” in its upgrade.

Mondelez International — Mondelez International added 2.7% before the bell on strong second-quarter results. The snack maker on Thursday reported earnings of 76 cents a share, excluding items, on $8.51 billion in revenue. Analysts polled by Refinitiv had estimated EPS of 69 cents and revenues of $8.21 billion.

— CNBC’s Tanaya Macheel, Yun Li and Jesse Pound contributed reporting

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July 28, 2023
Sweetgreen shares tumble after salad chain reports weak sales but narrowing losses
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Customers enter a Sweetgreen restaurant on June 21, 2021 in Chicago, Illinois.

Scott Olson | Getty Images

Sweetgreen on Thursday reported quarterly sales that fell short of Wall Street’s expectations, but losses did narrow from the year-earlier period.

The company also raised its forecast for restaurant-level margins and said it could break even on its adjusted earnings before interest, taxes, depreciation and amortization this year. Sweetgreen, which went public in November 2021, is aiming to turn a profit for the first time by 2024.

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Shares of the company fell 9% in extended trading. The stock closed Thursday down more than 5%.

Here’s what the company reported:

Loss per share: 24 cents (That’s not comparable to an estimate of 16 cents, according to Refinitiv consensus estimates.)

Revenue: $152.5 million vs. $156.7 million expected by analysts polled by Refinitiv

The salad chain reported a second-quarter net loss of $27.3 million, or 24 cents per share, narrower than its net loss of $40.5 million, or 37 cents per share, a year earlier.

The company reported an adjusted EBITDA of $3.3 million, swinging from a loss of $7.8 million in the year-ago period.

“We were able to expand our margin pretty significantly at the restaurant-level margin, all while doing it with less G&A,” CEO Jonathan Neman told CNBC.

The chain’s restaurant-level profits expanded to 20% from 19% in the year-ago period.

Neman said the company’s improved restaurant-level margins were largely due to labor savings from less turnover and more efficient store staffing. He also said the company has been spending less on its ingredients.

“I think our supply chain procurement team did an awesome job around the cost of our goods, maintaining the high quality we expect, but doing it in a much more disciplined way,” Neman said.

Net sales rose 22% to $152.5 million, fueled by new restaurants.

The company’s same-store sales grew 3% in the quarter, bolstered by price hikes.

For 2023, Sweetgreen now expects restaurant-level margins of 16% to 18%, up from its prior range of 15% to 17%. It also expects adjusted EBITDA in a range of a $10 million loss to breaking even. The company previously said is adjusted EBITDA would be a loss of $13 million to $3 million.

The company reiterated the rest of its outlook, projecting revenue of between $575 million and $595 million and same-store sales growth of 2% to 6%.
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July 27, 2023
Vita Coco wants its coconut water be your cocktail mixer — and your hangover cure

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Vita Coco water.

Tim P. Whitby | Getty Images

For nearly two decades, Vita Coco has sold its coconut water to health-conscious consumers as a fresh way to hydrate. This year, it’s changing the pitch.

The beverage company is pushing its namesake brand into new use cases and occasions, partnering with Diageo on a canned cocktail and marketing the drink as a hangover aid.

Co-founder Mike Kirban compared Vita Coco’s transformation to that of Ocean Spray, the agricultural cooperative that sells cranberry products.

“Ocean Spray is a brand that’s four times our size, that’s all based on one ingredient,” the company’s executive chairman told CNBC. “And we should be bigger than Ocean Spray pretty quickly, because I think the coconut is cooler than the cranberry.”

Founded in 2004, Vita Coco started as a coconut water brand but has since expanded into other beverage categories, like energy drinks and water. Its namesake brand still accounts for three-quarters of the company’s revenue, which reached $335.8 million in the first nine months of 2022.

The company went public in October 2021, just before the market for initial public offerings dried up as inflation, the war in Ukraine and economic uncertainty weighed on investors.

Vita Coco’s stock is up less than 1% since its IPO, but it’s fared better than many other consumer companies that went public around the same time, like Sweetgreen and Allbirds.

In May, Kirban transitioned from co-CEO at the company to his current role, leaving Boston Beer veteran Martin Roper as the sole chief executive — another step of Vita Coco’s evolution.

Coke and Pepsi’s loss, Vita Coco’s gain

Just months before Vita Coco’s IPO, both Coca-Cola and PepsiCo exited coconut water. Coke sold Zico back to its founder as it slimmed down its portfolio, and Pepsi offloaded O.N.E. as part of the $3.3 billion sale of its juice business.

Despite the beverage giants’ size, they had been unable to compete with Vita Coco, which is credited with bringing coconut water to the U.S. and still holds 50% share of the market, excluding its private-label business.

Their exits from the segment opened a new distribution avenue for Vita Coca. As long as Coke and Pepsi were in the coconut water business, their contracts with venues ranging from stadiums to college campuses shut Vita Coco out.

With the momentum of new growth opportunities, Vita Coco is now pushing into bars and restaurants. Step one of the plan is teaming up with Diageo for three canned cocktails mixing Captain Morgan rum and Vita Coco coconut water: a mojito, a piña colada and a strawberry daiquiri.

“If you go to Brazil or Southeast Asia, coconut water is what you mix with cocktails,” Kirban said. “The idea is to start getting consumers used to drinking coconut water cocktails with the ready to drink with Diageo partnership.”

Kirban said Vita Coco would be partnering with a spirits company for its broader on-premise expansion plans, but declined to name the partner.

Over the last few years, alcohol and nonalcoholic beverage companies have been teaming up, leaning on each others’ brand equity and expertise to gain so-called “share of throat.” For example, Captain Morgan can introduce itself to Vita Coco’s health-conscious, younger consumers, while Vita Coco benefits from the rum’s mass market appeal.

The morning after

Vita Coco has also been leaning into its reputation as a hangover “cure.”

Since late 2019, the brand has used New Year’s Day as way to pitch hangover recovery kits and subscriptions that feature its products in collaborations with Postmates, Lyft and Reef Kitchens.

This year it’s partnering with DoorDash for a promotion Monday morning following the Super Bowl.

The marketing strategy is something of a reversal, after years of resisting the association.

“With our board, there was always a discussion,” Kirban said. “When you talk marketing, do we want to talk about hangovers? Is that OK for us to talk about?”

And it’s not done there. After the hangover subsides, Vita Coco wants to be the non-dairy milk in your coffee.

In late January, the brand announced it’s partnered with Alfred Coffee, a high-end chain with locations in California and Texas, to create a non-dairy coconut milk for its baristas to use.

Vita Coco plans to expand the product designed specifically for coffee — separate from the coconut milk it sells in supermarkets nationwide — to other coffee shops and eventually to store shelves.

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February 10, 2023
Fast food reigns supreme as inflation weighs on pricier restaurants

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A girl waiting in line to pick up an order at a McDonald’s restaurant.

Oleksii Chumachenko | SOPA Images | Lightrocket | Getty Images

Fast-food chains are looking like the big winners in the fourth quarter — and beyond — as fast-casual and casual-dining restaurants struggle to attract customers.

Many publicly traded restaurant companies haven’t reported their latest quarterly results yet, but for those that have, a pattern is emerging. Inflation-weary customers pulled back their restaurant spending during the holiday season, just as they spent less than expected at retailers. Savvy fast-food chains appealed to those consumers with value menus and enticing promotions, drawing in customers across the income spectrum.

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Generally, the fast-food sector fares better than the rest of the industry during times of economic uncertainty and downturns.

Take McDonald’s, for example. The fast-food giant said U.S. same-store sales climbed 10.3%, helped in part by low-income consumers returning more frequently than they had for the prior two quarters. Executives also credited the success of its Adult Happy Meal promotion and the annual return of the McRib for its strong sales growth. Its U.S. traffic increased for the second consecutive quarter, bucking the industry trend.

Likewise, rival Yum Brands reported solid U.S. demand. Taco Bell’s domestic same-store sales climbed 11%, boosted by increased breakfast orders, the return of Mexican Pizza and its value meals. Pizza Hut’s U.S. same-store sales grew 4%, while KFC’s ticked up 1% as it faced tough year-ago comparisons.

More fast-food earnings are on deck in the coming weeks. Burger King owner Restaurant Brands International is slated to announce its fourth-quarter results on Tuesday, while Domino’s Pizza will post its earnings Feb. 23.

‘We just didn’t see that pop’

In contrast to McDonald’s and Yum’s strong results, Chipotle Mexican Grill on Tuesday reported quarterly earnings and revenue that fell short of Wall Street’s estimates for the first time in more than five years. CEO Brian Niccol maintained that the burrito chain’s price hikes haven’t led to “meaningful resistance” from customers.

Instead, Chipotle executives presented a laundry list of reasons why its performance disappointed: bad weather, the underperforming launch of Garlic Guajillo Steak, tough comparisons to the previous year’s brisket launch and seasonality.

Customers order from a Chipotle restaurant at the King of Prussia Mall in King of Prussia, Pennsylvania.

Mark Makela | Reuters

“As we got around the holidays, we just didn’t see that pop, that momentum, that we normally see … frankly, we started the quarter soft, and we ended the quarter soft,” Chipotle Chief Financial Officer Jack Hartung said on the company’s conference call, comparing the decline in December to weaker retail sales at that time.

Chipotle said that traffic turned positive in January. However, the chain is facing easy comparisons to a year earlier, when Omicron outbreaks forced Chipotle and other chains to shutter early or temporarily close locations. And Bank of America analyst Sara Senatore noted in a research note on Wednesday that January’s unseasonably warm weather has been supporting demand for the broader industry.

Rival fast-casual chains haven’t reported their fourth-quarter earnings yet. Shake Shack is set to share its results on Feb. 16. However, in early January, it announced preliminary same-store sales growth that fell short of Wall Street’s estimates. Sweetgreen is slated to report its results on Feb. 23, while Portillo’s is scheduled for March 2.

Casual-dining concerns

Fast-casual restaurants’ struggles are an even worse sign for the casual-dining segment.

For more than a decade, casual-dining restaurants have struggled to attract customers as Chipotle, Sweetgreen and Shake Shack have stolen their customers. So the likes of Red Lobster and Applebee’s have turned to offering deep discounts or spending big bucks on advertising.

Soaring inflation has compounded the issue, particularly for restaurant companies like Brinker International, which is trying to turn around Chili’s Grill and Bar.

A customer walks towards the entrance of a Brinker International Inc. Chili’s Grill & Bar restaurant in San Antonio, Texas.

Callaghan O’Hare | Bloomberg | Getty Images

At the start of the month, Brinker reported that Chili’s traffic fell 7.6% for the quarter ended Dec. 28. Brinker CEO Kevin Hochman, the former head of KFC’s U.S. business, told analysts on the company’s conference call that the decline was expected as it tries to shed less profitable transactions. Chili’s has hiked its prices and cut down on coupons as part of the strategy.

More full-service restaurants are expected to report their results later this month. Outback Steakhouse owner Bloomin’ Brands is slated to make its announcement on Feb. 16.

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February 9, 2023
The tech IPO market collapsed in 2022, and next year doesn’t look much better

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The Nasdaq MarketSite in New York.

Michael Nagle | Bloomberg | Getty Images

Following a record-smashing tech IPO year in 2021 that featured the debuts of electric car maker Rivian, restaurant software company Toast, cloud software vendors GitLab and HashiCorp and stock-trading app Robinhood, 2022 has been a complete dud.

The only notable tech offering in the U.S. this year was Intel’s spinoff of Mobileye, a 23-year-old company that makes technology for self-driving cars and was publicly traded until its acquisition in 2017. Mobileye raised just under $1 billion, and no other U.S. tech IPO pulled in even $100 million, according to FactSet.

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In 2021, by contrast, there were at least 10 tech IPOs in the U.S. that raised $1 billion or more, and that doesn’t account for the direct listings of Roblox, Coinbase and Squarespace, which were so well-capitalized they didn’t need to bring in outside cash.

The narrative completely flipped when the calendar turned, with investors bailing on risk and the promise of future growth, in favor of profitable businesses with balance sheets deemed strong enough to weather an economic downturn and sustained higher interest rates. Pre-IPO companies altered their plans after seeing their public market peers plunge by 50%, 60%, and in some cases, more than 90% from last year’s highs.

In total, IPO deal proceeds plummeted 94% in 2022 — from $155.8 billion to $8.6 billion — according to Ernst & Young’s IPO report published in mid-December. As of the report’s publication date, the fourth quarter was on pace to be the weakest of the year.

With the Nasdaq Composite headed for its steepest annual slump since 2008 and its first back-to-back years underperforming the S&P 500 since 2006-2007, tech investors are looking for signs of a bottom.

But David Trainer, CEO of stock research firm New Constructs, says investors first need to get a grip on reality and get back to valuing emerging tech companies based on fundamentals and not far-out promises.

As tech IPOs were flying in 2020 and 2021, Trainer was waving the warning flag, putting out detailed reports on software, e-commerce and tech-adjacent companies that were taking their sky-high private market valuations to the public markets. Trainer’s calls appeared comically bearish when the market was soaring, but many of his picks look prescient today, with Robinhood, Rivian and Sweetgreen each down at least 85% from their highs last year.

“Until we see a persistent return to intelligent capital allocation as the primary driver of investment decisions, I think the IPO market will struggle,” Trainer said in an email. “Once investors focus on fundamentals again, I think the markets can get back to doing what they are supposed to do: support intelligent allocation of capital.”

Lynn Martin, president of the New York Stock Exchange, told CNBC’s “Squawk on the Street” last week that she’s “optimistic about 2023” because the “backlog has never been stronger,” and that activity will pick up once volatility in the market starts to dissipate.

Hangover from last year’s ‘binge drinking’

For companies in the pipeline, the problem isn’t as simple as overcoming a bear market and volatility. They also have to acknowledge that the valuations they achieved from private investors don’t reflect the change in public market sentiment.

Companies that were funded over the past few years did so at the tail end of an extended bull run, during which interest rates were at historic lows and tech was driving major changes in the economy. Facebook’s mega IPO in 2012 and the millionaires minted by the likes of Uber, Airbnb, Twilio and Snowflake recycled money back into the tech ecosystem.

Venture capital firms, meanwhile, raised ever larger funds, competing with a new crop of hedge funds and private equity firms that were pumping so much money into tech that many companies were opting to stay private for longer than they otherwise would.

Money was plentiful. Financial discipline was not.

In 2021, VC firms raised $131 billion, topping $100 billion for the first time and marking a second straight year over $80 billion, according to the National Venture Capital Association. The average post-money valuation for VC deals across all stages rose to $360 million in 2021 from about $200 million the prior year, the NVCA said.

Those valuations are in the rearview mirror, and any companies who raised during that period will have to face up to reality before they go public.

Some high-valued late-stage startups have already taken their lumps, though they may not be dramatic enough.

Stripe cut its internal valuation by 28% in July, from $95 billion to $74 billion, the Wall Street Journal reported, citing people familiar with the matter. Checkout.com slashed its valuation this month to $11 billion from $40 billion, according to the Financial Times. Instacart has taken a hit three times, reducing its valuation from $39 billion to $24 billion in May, then to $15 billion in July, and finally to $13 billion in October, according to The Information.

Klarna, a provider of buy now, pay later technology, suffered perhaps the steepest drop in value among big-name startups. The Stockholm-based company raised financing at a $6.7 billion valuation this year, an 85% discount to its prior valuation of $46 billion.

“There was a hangover from all the binge drinking in 2021,” said Don Butler, managing director at Thomvest Ventures.

Butler doesn’t expect the IPO market to get appreciably better in 2023. Ongoing rate hikes by the Federal Reserve are looking more likely to tip the economy into recession, and there are no signs yet that investors are excited to take on risk.

“What I’m seeing is that companies are looking at weakening b-to-b demand and consumer demand,” Butler said. “That’s going to make for a difficult ’23 as well.”

Butler also thinks that Silicon Valley has to adapt to a shift away from the growth-first mindset before the IPO market picks up again. That not only means getting more efficient with capital, showing a near-term path to profitability, and reining in hiring expectations, but also requires making structural changes to the way organizations run.

For example, startups have poured money into human resources in recent years to handle the influx in people and the aggressive recruiting across the industry. There’s far less need for those jobs during a hiring freeze, and in a market that’s seen 150,000 job cuts in 2022, according to tracking website Layoffs.fyi.

Butler said he expects this “cultural reset” to take a couple more quarters and said, “that makes me remain pessimistic on the IPO market.”

Cash is king

One high-priced private company that has maintained its valuation is Databricks, whose software helps customers store and clean up data so employees can analyze and use it.

Databricks raised $1.6 billion at a $38 billion valuation in August of 2021, near the market’s peak. As of mid-2021, the company was on pace to generate $1 billion in annual revenue, growing 75% year over year. It was on everybody’s list for top IPO candidates coming into the year.

Databricks CEO Ali Ghodsi isn’t talking about an IPO now, but at least he’s not expressing concerns about his company’s capital position. In fact, he says being private today plays to his advantage.

“If you’re public, the only thing that matters is cash flow right now and what are you doing every day to increase your cash flow,” Ghodsi told CNBC. “I think it’s short-sighted, but I understand that’s what markets demand right now. We’re not public, so we don’t have to live by that.”

Ghodsi said Databricks has “a lot of cash,” and even in a “sky is falling” scenario like the dot-com crash of 2000, the company “would be fully financed in a very healthy way without having to raise any money.”

Snowflake shares in 2022

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Databricks has avoided layoffs and Ghodsi said the company plans to continue to hire to take advantage of readily available talent.

“We’re in a unique position, because we’re extremely well-capitalized and we’re private,” Ghodsi said. “We’re going to take an asymmetric strategy with respect to investments.”

That approach may make Databricks an attractive IPO candidate at some point in the future, but the valuation question remains a lingering concern.

Snowflake, the closest public market comparison to Databricks, has lost almost two-thirds of its value since peaking in November 2021. Snowflake’s IPO in 2020 was the largest ever in the U.S. for a software company, raising almost $3.9 billion.

Snowflake’s growth has remained robust. Revenue in the latest quarter soared 67%, beating estimates. Adjusted profit was also better than expectations, and the company said it generated $65 million in free cash flow in the quarter.

Still, the stock is down almost 20% in the fourth quarter.

“The sentiment in the market is a little stressed out,” Snowflake CEO Frank Slootman told CNBC’s Jim Cramer after the earnings report on Nov. 30. “People react very strongly. That’s understood, but we live in the real world, and we just go one day at a time, one quarter at a time.”

— CNBC’s Jordan Novet contributed to this report.

WATCH: Snowflake CEO on the company’s light guidance

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December 29, 2022