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Sweetgreen Sees Plenty of Green on First Day of Trading

Sweetgreen takes off on its first day of trading in an IPO valuing the restaurant chain at nearly $3 billion.
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Sweetgreen, a healthy-food restaurant operator, had a healthy market debut Thursday as the company ended in the green.

Shares of the Culver City, Calif., salad chain finished up nearly 77% to $49.50.

The shares on Wednesday were priced at $28 in its initial public offering, above the $23 to $25 a share range the company had estimated last week.

The $28 price values the chain at $3 billion, Barron's reported.

Proceeds from the offering are expected to be $364 million, based on 13 million shares sold.

As of Sept. 26, the company owned and operated 140 restaurants in 13 states and Washington and employed more than 5,000 people.

Founded in 2007 by Georgetown University graduates, Sweetgreen reported a loss of $142 million for 2020 and $87 million for 2021 to date through Sept. 26. 

Revenue totaled $221 million in 2020 and $243 million year to date through Sept. 26.

"Large restaurant chains were built on a model that has not evolved to reflect shifting consumer tastes, leaving many consumers hungry for an alternative," the company said in its prospectus. 

"We see tremendous white space in new markets throughout the U.S. and are confident that Sweetgreen is well positioned to meet the growing demand for convenient and healthy food."

Sweetgreen said some of its new restaurants in Miami and Austin, which opened during the Covid-19 pandemic, "have achieved strong initial sales volumes, which were significantly in excess of our expectations."

"Although we continued to open new restaurants in those markets in fiscal year 2020, (average unit volume) in those markets decreased from fiscal year 2019 by 36% as a result of the impact of the Covid-19 pandemic," the company said.

Sweetgreen said that "while almost all of our outposts were closed in 2020 due to the Covid-19 pandemic, as employees began returning to offices, we have quickly increased the number of outposts in operation to 350 as of Sept. 26."

The Outpost Channel "enables office workers, hospital workers, or building residents to get [custom orders] delivered directly to their location during a dedicated time window each day," the company said.