Better-for-you fast-casual Sweetgreen officially filed for its IPO Monday, becoming the fifth restaurant chain to do so this year.
The brand follows in the footsteps of Krispy Kreme, Dutch Bros Coffee, First Watch, and Portillo's. The number of shares to be offered and the price range for the proposed offering have not been announced yet. Sweetgreen will list itself under the symbol "SG" on the New York Stock Exchange.
The company is on the cusp of going public after years of accelerating sales and unit growth. Sweetgreen grew from 29 restaurants at the end of fiscal 2014 to 119 by the end of 2020, which is a 27 percent compound annual growth rate, according to the chain's SEC filing. As of September, the concept had reached 140 stores. Additionally, AUV has lifted from $1.6 million seven years ago to $2.5 million this year, and net revenue has increased from $42 million in 2014 to $243 million through September 26.
Amid the consistent growth, Sweetgreen has maintained healthy unit economics, with a restaurant-level profit margin of 12 percent. Also, digital mixes 68 percent, with 47 percent coming from the chain's owned channels.
The fast casual believes the restaurant industry is "ripe for disruption" and that there's an opportunity for brands aligned with shifting consumer preferences, including an increased focus on health and wellness, plant-based meals, adoption of digital and delivery, and connections to purpose-driven brands. Going forward, Sweetgreen plans to grow via new market expansion, market densification, additional digital capacity inside restaurants, and new formats, including drive-thru and pickup only. The brand aims to double its current footprint in the next three to five years.
"Over the last 15 years, we have been leading a movement to re-imagine fast food for a new era," the company states in the filing. "There is a powerful shift happening in consumer behavior. Every day more people want to eat healthier food and care about the impact their choices have on the environment. This is becoming the new normal, and we believe sweetgreen is well positioned to be a category-defining food brand for the future."
Sweetgreen first revealed that it planned to go public in June. Two months later, the chain announced that it will acquire Spyce, a Boston-based fast casual that uses robots and automation to prepare orders. The chain is currently in the process of determining when and where it will introduce Spyce's technology, which features a conveyor belt lined with dispensers that automatically release precise portions of ingredients.
Goldman Sachs & Co. LLC and J.P. Morgan will act as lead book-running managers and as representatives of the underwriters for the proposed offering. Allen & Company LLC and Morgan Stanley will be book-running managers. Citigroup Global Markets Inc., Cowen and Company, LLC, Oppenheimer & Co. Inc., RBC Capital Markets, and William Blair will also be book-running managers. Amerivet Securities and Blaylock Van LLC will act as co-managers for the proposed offering.