$Sweetgreen(SG.US) -16% (no position) as another high growth company blamed Trump’s tariffs for the decline in April consumer sentiment and used it as an excuse to reduce FY’25 guidance. 1Q results came in above expectations.
FY’25 Guidance- SSS flat, saw +1% to +3%, est +1.5%- Revs $740M-$760M, saw $760M-$780M, est $764M- Adj Ebitda $30M, saw $32M-$38M, est $33.7M1Q RESULTS- SSS -3.1%, est -3.5%- Revs $166.3M, est $165.1M- Adj EBITDA +0.3M vs -$1.5M- Restaurant % margin 17.9% vs 16.7% est- EPS -$.21, est -$.22 lossCommentary- William Blair analyst Sharon Zackfiasaid results met the high end of guidance on “solidly positive” sales in March, though sales in April had “reversed course” to negative on outsized weakness in urban lunch business markets such as New York, Boston and Los Angeles, which mgmt blamed on Trump’s tariff policy which hurt consumer sentiment. Zackfia also said the shift of Easter into 2Q “penalized results.”- TD Cowen Analyst Andrew Charles notes sales had improved to the high end of guidance in March, but then “precipitously” declined in April following the tariff announcement.We would overlook mgmt’s cautious FY’25 guidance and buy SG’s FY’25 comps reset based on our view that Trump’s tariffs will prove not as severe as feared.The copyright of this article belongs to the original author/organization.
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