Over a 15-year span, Sweetgreen expanded fivefold to 150 locations as it approached the doorstep of going public in late 2021. But that run wasn’t the premise behind the $6 billion valuation it reached—this was a story of what hadn’t happened yet for a fast casual three college friends invented 18 years ago in a 560-square-foot Washington, D.C., restaurant.
Since its 2021 IPO, Sweetgreen has climbed to 246 restaurants (fiscal year-end 2024). William Blair analyst Sharon Zackfia, after recent meetings with CFO Mitch Reback and head of investor relations and chief of staff Rebecca Nounou, now feels another 5X growth chart could be underway.
William Blair conducted saturation analysis, assuming national penetration similar to Sweetgreen’s levels in the Boston DMA, where there is one unit for roughly every 200,000 people. The result draws a line, she wrote this week in a note, to 1,200 locations and annual revenue north of $3.5 billion, with unit-level margins in the mid-20 percent range generating annual EBITDA of at least $700 million.
And to be clear, Zackfia considers this conservative given the still-relatively young development of Sweetgreen’s Infinite Kitchen model and how these could open windows to smaller markets thanks to a lower breakeven point on a third less labor. There’s drive-thrus to consider, as well. Today, Sweetgreen has only one (the brand calls it a “Sweetlane”). It opened November 2022 as a pull-ahead pickup window, more akin to Chipotle’s “Chipotlane” than your standard order-at-the-box venue. Sweetgreen has plans to open more with Infinite Kitchens inside.
Additionally, Zackfia said, management indicated Sweetgreen will likely explore licensing over the next few years in spots where company-owned sites are not feasible, such as airports.
What Zackfia sees, in wider terms, is a brand that’s proven portability in recent years across geographies and in the suburbs, making is way from the company’s urban, foot-traffic reliant roots into something more flexible. That runway, she said, is being augmented by innovation, which, in reality, remains in its infancy from a potential perspective.
Meanwhile, there’s been clear efforts to broaden customer appeal and usage occasions alongside bolstering frequency via increased menu innovation and the launch of a revamped loyalty program, which is slated to complete by April.
Unpacking these levers for Sweetgreen, Infinite Kitchens, Zackfia said, should deepen the fast casual’s competitive moat. Although recent investments in supply chain, brand, and tech have already created differentiation, she added, this will elevate Sweetgreen into another tier. Infinite Kitchen locations have at least an 800-basis-point margin advantage versus traditional sites (700 from labor and 100 from cost of goods sold). They also provide unique optionality for Sweetgreen to either harvest its margin advantage or use price to ward off competition in select markets, Zackfia said.
The genesis of Sweetgreen’s Infinite Kitchen turns back to 2021 when it acquired Spyce—a Boston startup that deployed automation to prepare meals. It paid $50.7 million, mostly in stock. Two years later, the first robotic restaurant, or Infinite Kitchen, debuted in the Chicago suburb of Naperville, Illinois.
MORE: How Sweetgreen’s Founders Reinvented Fast Food by Creating Their Own Playbook
Spyce first used the name when it launched a second-generation robotic kitchen platform in November 2020. The conveyor belt ran under ingredient dispensers that dropped customized mixes of fresh ingredients into bowls.
Customers walking into Sweetgreen’s Naperville restaurant were met by a new “host” position that provided a personalized connection between team members and guests. Diners could use self-order kiosks inside, place an order through the app, or order directly from the host. The format also ushered in a “Tasting Counter” with brand-storytelling digital screens and a revamped merchandising strategy.
By the end of 2024, there were 12 Infinite Kitchens—six of which opened in Q4 (10 launched over the year, including three retrofits). Sweetgreen said the goal for 2025 would be to dedicate half of development, of 40 total locations, to Infinite Kitchens. That would, if all stays on plan, lift the density from 12 to 33. One to three retrofits are slated as well, and two New York City stores are expected to relocate and layer on the system as they do. So altogether, at least 25 new Infinite Kitchens will reach the marketplace in 2025.
As Zackfia noted, it’s an ambition shaker for the brand. The stores to date have delivered at least 7 percentage points in labor savings and a point in improved COGS compared to stores of similar age and volume. They’re also driving higher native digital sales due to throughput gains and repeatable performance, leading to better guest experience scores.
A Hingham, Massachusetts, Infinite Kitchen pushed a 30 percent margin in its first full month. That’s 4 percentage points higher than what the Naperville original accomplished. In other terms, Sweetgreen is getting better at opening them.
The brand worked on the finish station (every bowl is completed by a team member), which led to bottlenecks before. Sweetgreen rethought its ergonomics.
The chain conducted a guest survey in January that showed 90 percent of customers had a positive overall experience at Infinite Kitchens, including food and ingredient quality.
Moreover, CEO Jonathan Neman told investors in Q4, a retrofit of a Chicago Willis Tower Sweetgreen—a high-volume location—was pacing “to set all sorts of records.” A Penn Plaza, New York City one, finished in mid-July, was comping about 15 percent on its digital lines.
That’s a vital development to follow since it cracks open another slice of Infinite Kitchen’s potential—in addition to opening Sweetgreen to markets it couldn’t enter previously, given past unit-level economics, it also offers an opportunity to rethink how the brand might retrofit busy stores. Even with “tons of demand,” those New York City and Chicago units got food to customers in sub-5 minutes.
Infinite Kitchen can fulfill roughly 500 orders per hour. Neman said expect the rate of retrofits to pick up in 2026 and 2027. Zackfia also noted the company “appears likely” to test digital-only kitchens near high-volume urban stores in the future.
Going by the math, about 10 percent of Sweetgreen’s base should have Infinite Kitchens by the start of 2026. Near-term, growth will be weighted to the second half of the year, the brand said, with some 75 percent of new openings including them. Zackfia added management views 75 percent as the floor for Infinite Kitchens as a percentage of new builds in 2026 and beyond.
Zackfia’s analysis suggests an embedded incremental consolidated unit-level margin benefit of roughly 40 basis points in 2025, scaling to 80 the following year, assuming no incremental volume benefit associated.
On the latter, it’s simply too early to know exacts, but it seems a safe bet there has been a sales lift from automation. Management expects to be in a better position to quantify in late 2025. Essentially, Sweetgreen knows there’s faster throughput and increased order accuracy. How much is that lifting sales, though? Zackfia believes we’ll find out soon but expects it to prove meaningful at an incremental flow-through of about 70 percent on Infinite Kitchens versus 40 percent for traditional sites. And, again, with no need for incremental labor.
Infinite Kitchens will lessen a key gating factor to Sweetgreen’s pace of development—availability of employees. As the brand accelerates to an anticipated 20 percent expansion clip in 2026 and beyond, having this robotic model will lessen the burden of staffing up alongside expansion targets. The brand said in the past the Infinite Kitchen system operates with about half the staff of traditional restaurants.
And going back to an earlier point, Zackfia said Sweetgreen’s portability was further reinforced in 2024 on the average-unit volume side. That figure held steady at $2.9 million (it was $3 million in 2019) despite the restaurant count growing 2.5X and Sweetgreen steadily adding suburban sites. More than half of its locations are now outside urban markets. That was just a third in 2019.
The ability to not lose material ground on AUV while migrating beyond dense urban metros shows, she said, Sweetgreen resonates away from historic strongholds. Also, it’s doing so without the added advantage of drive-thrus.
Sweetgreen has entered 10 new states since its 2021 IPO. AUVs at fresh locations in 2024, the company said in Q4, exceeded Year 2 expectations ($2.8 million) in their first calendar of operations, while posting double-digit comps in the Midwest, Texas, and Southeast.
Sweetgreen reached three new areas last year: Seattle; the Short North area of Columbus, Ohio; and uptown Charlotte, North Carolina. Unit growth will accelerate in 2025 by at least 15 percent and feature three new markets as well: Sacramento, Phoenix, and Cincinnati.
Menu innovation, loyalty, and digital gains
Sweetgreen was somewhat muted regarding menu development in 2024 as it retrenched operational initiatives. The brand plans to jumpstart in 2025 and is already off to a quick pace with Ripple Fries (more on that here), which, during tests, boasted the highest attach rate figures for a side in company history. Neman also noted they were “totally incremental.” So, customers weren’t swapping out staples for fries—they were tacking them on.
A “Michelin-starred chef collaboration” is coming in May and Sweetgreen will reignite its seasonal menu launches starting in the summer.
These are important beyond guest expectations and the brand’s historyu, as rotating in features enables it to flex value at lower mid-tier price ranges.
The Ripple Fries were strategically timed ahead of Sweetgreen’s revamped loyalty program rollout as well, which the company hopes will bolster native digital channel mix and provide the opportunity to increase guest frequency in the middle- to lower-end of the bell curve.
Loyalty, Zackfia said, will be modestly dilutive to Q2 comps due to the accounting treatment before neutralizing in Q3 and becoming accreditive by Q4.
Digital mixed 56 percent of sales in Q4 and owned digital 29 percent, compared to 58 and 34 percent, respectively, in Q4 2023.
“SG Rewards” landed in some markets in mid-February and allows members to earn 10 points for every eligible dollar spent. Points can be redeemed for free menu items, along with access to exclusive deals and special offers. It replaced the previous “Sweetpass” two-tiered platform that included a free component as well as a $10 monthly membership option with additional perks.
The brand felt Sweetpass, launched in 2023, didn’t move the transaction needle. Despite some incremental gains at the subscription tier, it wasn’t a large enough base of users to drive growth. So Sweetgreen looked to simplify and offer a better in-app experience with one-to-one personalization.
Users now have more control over their redemption and earn on every purchase. Down the line, Sweetgreen said, it’ll be able to track sign-ups, repeat visits, and reward redemptions to measure engagement.
The brand shifted capital internally toward menu innovation and strategic media investment in preparation. That combined with personalized CRM and a revamped loyalty program, Neman said, will drive transactions.
Even amid larger consumer confidence concerns, Zackfia believes Sweetgreen’s sales trends improved in March following a 6 percent same-store sales decline in January/February that included a combined 700-basis-point hit from inclement weather and the L.A. wildfires. She projects March returned to “nicely positive comp territory,” likely reflecting the launch of Ripple Fries and increase in marketing, as well as the resiliency of Sweetgreen’s affluent customer base and a post-pandemic high in return-to-office.
In turn, she expects the brand to meet its guidance for a negative 3–4 percent Q1 comp decline that slopes up throughout the year—3–5 percent gains after from Q2 on.
Overall, for Sweetgreen, the larger projection owes to a story that hasn’t been written yet. Alongside menu and tech changes, the brand is piloting “Project Turbo,” a throughput-focused initiative designed to leverage the digital and front lines at different points in the day. Basically, using the “double engines” inside restaurants to help each other instead of siloing out.
Loss from operations in Q4 was $31.4 million and loss from operations margin 20 percent versus $29.3 million and 19 percent in the prior-year period. Restaurant-level profit was $28 million and store-level profit margin 17 percent (compared to $24.8 million and 16 percent last year). Net loss was $29 million and adjusted EBITDA negative $600,000. Adjusted EBITDA margin was flat.
For the full 2024 fiscal year, total revenue climbed 16 percent to $676.9 million as same-store sales grew 6 percent (4 percent price, 2 percent traffic and mix) and loss from operations was $95.7 million and net loss $90.4 million. Adjusted EBITDA came in positive at $18.7 million versus negative $2.8 million in fiscal 2023.
This past year marked the first full calendar of positive adjusted EBITDA in sweetgreen’s history.
Since its IPO in 2021, sweetgreen has posted four consecutive years of double-digit revenue growth.
Neman said the EBITDA number, in particular, shows Sweetgreen’s strategy is working. And that, inherently, is where Zackfia sees whitespace ahead.
“At 3.7 times our 2025 sales estimate, we remain bullish on sweetgreen’s expanding appeal and game-changing dynamics of the Infinite Kitchen, and continue to view sweetgreen’s growth runway as relatively open-ended with good visibility on ongoing margin expansion, as IKs become a greater proportion of restaurants and the system increasingly diversifies into lower-cost suburban markets,” she said.
