Okay, so I'm Sharon Zachary with William Blair. Thanks for joining us this morning. Really happy to have Jonathan Neman, Co-founder and CEO of Sweetgreen, with us. Rebecca's head of IR. She's also in the audience and I think is mic'd up and might be joining us. Really, you know, excited about Sweetgreen's long-term growth prospects. I think many in the room know we've been real believers in the opportunity for this concept to grow into something much larger than the 250 locations they have today. There are a lot of good elements about the story, and Jonathan will go over some of them before we have a little bit of a chat. I'm also very excited about the opportunity for the company to use its technology investments to kind of reinvest to the consumer in a better experience, faster throughput, potentially sharper price points. I think all of those start to widen the competitive moat in an industry where getting a moat in the first place is always very difficult. I need to tell you before Jonathan starts that we do have a complete list of research disclosures and potential conflicts of interest at williamblair.com. Thank you. Thank you. Thank you, Sharon. Good morning, everyone. Nice to be here with all of you. My name is Jonathan Neman. I'm the Co-founder and CEO of Sweetgreen. Just wanted to take you back to where Sweetgreen started and why it started. Sweetgreen started in 2007 by myself and my two co-founders, Nicolas and Nathaniel. It really started with a problem we were trying to solve in our own life. We were seniors at university and saw an opportunity to create a brand where we could serve food that was both healthy, delicious, convenient, had many of the attributes of fast food, but was actually good for you, and saw this opportunity to really create a global brand around this idea. Here's a picture of our very first location. It was a 500 sq ft old burger shack right outside of Georgetown University. Today, you know, as you see, our mission is to build healthier communities by connecting people to real food. Today we have 253 restaurants with an AUV of about $2.9 million. Interesting to note that as we've continued to expand beyond what started as mostly an urban concept into the suburbs, we've been able to maintain that AUV. We have very broad demographics, both in terms of demos and gender. You see it's a male, you know, male-female split of about 60/40. Q1 revenue is $166.3 million. Been very digitally enabled, really, since the beginning. Today we see about 60% of our sales coming through digital channels, much of that being through our own digital channels. Last year we had almost a 20% restaurant-level margin. You'll see many people historically thought of us as more of a lunch concept. We're now at about 60/40%. I think if you actually backed out a lot of these lunch-only restaurants, it gets much closer to a 50/50 split. We are very proud of the supply chain we have built. We work with over 150 domestic food partners and have built these regional supply chains across the country that allow us to deliver fresh, delicious food that we know our customers love. What makes Sweetgreen special? We call it this: the idea is farm to flavor. It is leveraging the best produce we can buy and bringing it together and putting that Sweetgreen touch on it to create something truly magical. It starts by partnering with farmers and growers that we trust. We make our food from scratch every day in all of our restaurants. While we're positioned as a fast food or fast casual restaurant, if you go inside of one of our kitchens, you will see that we are making pretty much everything by hand every day. That means many of our dressings are made from scratch every day. We are bringing in, you know, our proteins, are marinated and cooked every hour. We are, you know, chopping everything fresh with something that we know our customers love. We're able to deliver that high-quality product still with really strong unit economics. Lastly, a high digital connection. That digital connection and the combination of all of these things lead to very habitual Sweetgreen customers. That's part of the magic of the model that we have. The big picture for us is to be, our bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect. If you see, we have about 253 restaurants today, very early innings in our growth story. We see the opportunity to have thousands of locations in the U.S. alone, as well as a global opportunity at the right time. You'll see our footprint today. What started as a, you know, a brand started in DC and worked our way up the Northeast. It's now a national brand in 23 states. Again, we have line of sight to 1,000 units at our current unit economics. We're in 23 states today. We have an algorithm, about 15%-20% unit growth that we feel confident in. You'll see that this year and next year. We've seen very strong NROs as we've continued to expand the brand. This year we have a number of new markets opening, including places like Phoenix is one of the places that we're going to be going to. We just announced we're going to Northwest Arkansas. I think it shows the portability of the brand. The recent new market openings have been very successful. In the past year, we've opened places like North Carolina, both Charlotte and Raleigh. We've opened in Seattle. We've opened in Ohio. I think contrary to what many people think, it's resonating all over. Sharon mentioned some of the innovation from a technology perspective. While the company has always been an innovator from technology, it was typically on the digital side. We see a huge opportunity to continue to innovate the restaurant industry through automation. Showing here two of the format innovations we have. One is the Infinite Kitchen. The Infinite Kitchen is our automated make line. It's a proprietary technology that we have. We today have 12 of our restaurants featuring the Infinite Kitchen. The Infinite Kitchen is a really, really powerful tool for us. First and foremost, it creates a better customer experience. From a throughput perspective, we're able to create about 500 bowls an hour with the Infinite Kitchen, with perfect accuracy in portioning. We also see better food quality in terms of the way we hold the food, as well as less risk from a food safety perspective. From a team member perspective, it's much easier to work in those environments. We're seeing much less turnover in those restaurants. Lastly, from a company perspective, we're seeing seven to eight points of margin leverage in those restaurants. As Sharon mentioned, we see a huge opportunity to better leverage the Infinite Kitchen as we continue to scale, to use it in order to attack, to really address the price value with the brand. You know, what we believe is the truly winning disruptive value proposition is food that tastes as delicious, is really good for you, and we can meet on price. The combination of what we've built from a supply chain perspective, as well as the technology we've put in place, really allow us to create that disruptive model. You'll see the other picture is our Sweet Lane. We have only one Sweet Lane live today. It's actually right outside of Chicago in Schaumburg. We've seen really great success with that, not so dissimilar to the rest of the industry. We see that as another big growth lever for us as we continue to expand. We have a handful of Sweet Lanes planned for this year and continue to look for more next year. What will be very exciting is when you combine these two. A Sweet Lane combined with an Infinite Kitchen, where we can now offer the quality of food we do in the speed of fast food in more of a traditional drive-through. What we've seen on the Sweet Lane is continued comps. We reported on our last earnings that the Sweet Lane saw about a 20% same-store sales growth. Really, really powerful model for us right there. The menu, it's really built for habituation. You know, the menu is split up between our core and seasonal menu. We have our core menu of salads, bowls, and protein plates, as well as a seasonal menu, which we are bringing back, which will be at least four seasons a year, plus probably two other menu moments throughout the year, one being a tentpole menu moment. We have a custom menu that starts usually at $10 in most of our markets, allows customers to build their own and creates that personalization that we know customers love. There is a lot we can do with all of that data and where we can continue to personalize the menu. Then, of course, sides and attachments. We recently introduced Ripple Fries, which have done very well for the brand and see opportunity to continue to broaden there with things like a house-made beverage program and desserts. The combination of a customizable, personalized, and suited for off-premise creates this really habitual customer experience. From a menu innovation perspective, really focused on bringing newness to continue to drive new customer acquisition and frequency. Here are just a few examples of things that we've either recently done or are planning to do. One thing that we like to do in terms of driving culinary credibility is these collaborations with great chefs. In the past, we've partnered with chefs from Dan Barber to David Chang to Nancy Silverton. Recently just partnered with a Michelin star chef with a restaurant called COTE. If anyone's familiar with it, it's the best Korean barbecue restaurant in the country. We've created a Korean barbecue bowl. Again, it's a way for us to showcase how we take our amazing farm partners and the ingredients we have, combine it with some of this culinary excellence, and come up with these really new bold flavor profiles. Seasonals is a way in which we kind of really built the brand. We took about a year or so off of seasonals to broaden the menu, but we're bringing them back in a big way starting in July. We'll be bringing back some of our greatest hits. Not only does it help us from a frequency perspective as the menu constantly changes and enabling customers to be super frequent with us, it's also fantastic from a brand positioning perspective. Not a lot of brands can truly lean into seasonality the way Sweetgreen can. We'll follow that up in the fall as well. From a digital perspective, one of the new things that we launched recently is our SG Rewards program. It's a pretty very simple program on the face of it, where it's for every dollar you earn 10 points. The magic behind it is the personalized CRM that we are deploying. How do we create the right offer at the right time for the right person with the right creative to drive that incremental visit? While very early, just launched about less than two months ago, we're seeing some early signs of success with some frequency lifts in some of our most frequent cohorts. Very excited about what this can do for us over time. I'll also say we are seeing about 20,000 new customer acquisitions into the program per week. In terms of growing our footprint, you can see that we've scaled at a really steady pace over the past few years, growing from 186 restaurants in 2022 to almost 250 by the end of 2024. While doing that, we've continued to expand our restaurant-level margins. So you see our margins have gone from about 15% to approximately 20% last year. As we scale, we're building a more profitable model and really kind of getting that flywheel going. Along with that, you know, early in the company's history, we wanted to build the infrastructure for what will one day be a global iconic brand. It means building a supply chain, the technology infrastructure, the automation. We've been highly focused on leveraging that G&A as we move forward. If you look at our G&A over the past few years and looking forward, we expect to continue to leverage this G&A and it really growing at, you know, flat to a very, very small growth per year as we continue to grow. You can see what that does to the overall profitability. As you can see, the company is really at a profitability inflection point. We turned it just at EBITDA profitable last year. As we continue to add stores, drive comps, drive restaurant-level margins, all of that kind of flows through to the bottom line. All leads to a highly sustainable, efficient growth model. Here is kind of how we see our flywheel. You know, it is massive TAM that we focus on, just increasing our revenue, driving frequency and habituation, expanding four-wall margins, leveraging our G&A, leading to a profitable, sustainable model. Thank you for having me. I'm happy to answer any questions. Yeah, we'll do a fireside chat. I guess, Jonathan, it's probably helpful for everyone to kind of unpack the comp environment that you faced this year, which I know has been more challenging than expected. Can you kind of talk about the factors that have contributed to those challenges and, you know, how quickly you think you can put in place, you know, strategies to rectify that and kind of get back to the positive comps you need in the back half of the year to get to guidance? Absolutely. I think there's a few things impacting the comps for us so far this year. I'll start with the external environment. Obviously, we've seen a challenging macroeconomic environment, you know, both from a consumer perspective as well as some of the, you know, holiday and weather shifts. Specifically for our footprint, we've talked publicly in the past about two markets, two of our very large markets have been heavily impacted by external events. One being Los Angeles, which is our home market. Large market has been severely impacted by the LA wildfires, as well as a lot of the impacts to the Washington, DC market. You know, operating in a challenging backdrop, along with kind of comping over some very big comps from this time last year, comping over our steak lunch. Having said that, we see a lot of opportunities for how we can reverse those trends and continue to comp positively. What are the things that we're focused on? One is seasonals. We really, you know, if you wind back two years ago and you're sitting here, the questions were all about, there's a lot of questions on TAM. There's questions on, you know, can you target dinner? How does this work across the country? If you look today, we have Sweetgreen is working all over and a lot of those markets that were maybe once struggling are doing really, really well. Along the way, in doing so, we've lost some of the frequency of our core customers. I think that much of it is due to a lack of innovation from a seasonal menu perspective. The second being loyalty, which has been a headwind turning into a tailwind. The last thing I'll say is we see a lot of opportunities for operational improvements in the fleet. We recently brought on a new COO. His name is Jason Cochran. We feel very confident in elevating the standards, driving more quality and consistency, as well as driving throughput. We feel like it's, you know, we recognize the challenge, but feel very confident in our go-forward plan to drive comps. Can you walk through? I think it's, you know, you haven't been public that long. It's been, I think, three and a half years. This is, I think, the first time when seasonal offerings kind of went away, at least as a public company, to focus on the new permanent menu additions that you added last year and in the first part of this year. Can you talk about why there was kind of that either-or dynamic of having the seasonal offerings or doing, you know, steak, protein plates, Ripple Fries? I'd say we didn't understand the power of the seasonals, to be honest, in terms of frequency. We saw the ability to create these tentpole moments. It did what we expected. It broadened the consumer and it drove a ton of acquisition. I don't think we totally understood how powerful the seasonals were from a retention perspective. We also wanted to make room operationally to do that. Doing all of that together, introducing all of those new things together would have been challenging. Now that the menu has been broadened and we've built the system as well as the capability inside of the restaurants to do this, we feel very confident in our ability to bring newness to the menu at least six times a year. You didn't mention price as one of the factors that you think has been impacting frequency. How do you think about kind of the price value proposition of Sweetgreen? I'm sure you have measurements that you do internally. How has that been trending? How do you, who do you benchmark against from a competitive standpoint? Yeah, so if you look at what we've taken from a price perspective, we've actually taken less price than the competitive set over the past five years. Where I think some of the price value has been impacted has been some of those newer items that, given the double protein portion on them, are priced higher. I think if you look at our core menu, it's still solidly below $15, very much in line with the competitive set. It's some of these new items. I think there's some work that we are doing in order to re-anchor price value perception down. As an example, this week we launched something where each week we have these bowl drops where we have loyalty exclusive bowls under $13 in every market. We expect, you know, seasonals was another way we would anchor pricing. Seasonals would typically come in in the $11-$13 range. Bringing, you know, being very conscious of the environment we're in, conscious of the accessibility we want to create for this type of food, and knowing that we offer a better quality food and experience than many of the competitors. If we can be more competitive from a pricing perspective, we see a huge opportunity to drive transactions. Highly focused on it in a way that is not margin dilutive. With your customer, if there is, I know you skew higher household income, but if there is any economic sensitivity coming into play, do you typically see them trade down the menu or do they just trade out? We've seen them not totally trade out, but reduce frequency. Okay. So less of a trade down within the menu, just a drop in frequency. And within this context, how has customer acquisition been? Because we're talking about frequency of kind of maybe older, more legacy markets. I mean, how is the brand acquiring new customers? Has that remained healthy? Fantastic. Yeah, yeah. Very healthy. Customer acquisition remains very, very healthy. Okay. I know. That's why we think the opportunity is really around the seasonal menu. And then, of course, if anyone covers restaurants, you know, operational excellence is absolutely critical. You and I were just talking before, you know, the difference, you know, same menu, same city, one restaurant comping + 20%, another one down. The difference is really just the execution in the stores. Highly focused on both the system tools and culture and the right leaders in every single restaurant in order to drive that fantastic customer experience that will lead to positive transactions. That is probably a good segue to the new COO that just started. When you think about maybe the missed opportunities, particularly on the people and operational side, what would be kind of his top three priorities as he sits there today? He's probably not sitting. Hopefully, he's out in the field. He is actually working our store today at Schaumburg, working the drive-through. Everyone head to Schaumburg now. Yeah. He is just about to hit his 30-day mark. We're really, really thrilled to have him. He brings really a lot of rigor, high standards, and a lot of experience in this category. I'd say that the big focuses for him right now are driving better quality of execution in our restaurants, specifically around a lot of our hot food cooking and holding. Second, being the execution on our digital make lines, where we see an opportunity to focus on portioning and accuracy. Lastly, a huge opportunity around throughput. I'd put those as the near-term fixes that we think can really add value to the customer. The secondary priority, I wouldn't say secondary priority, but the other big focus is how we build the people flywheel to develop talent as we continue to open restaurants. We've done a really good job over the past couple of years bringing turnover at the stores down and driving productivity. Turnover today at the team member level is about 90%. We've recently put in a new workforce management system in where we're seeing some really nice results with, including a 50% reduction in callout rates as an example. You know, leveraging that system and then focusing on the people flywheel. Every, you know, the goal being as we continue to expand, how can we make it so that every new restaurant is from it with a head coach that is internally promoted? As we think about, I want to talk about IKs. It obviously gives you a big margin advantage. I think the assumption in the early days was that all of that margin would probably be harvested. It sounds like now there's probably an opportunity to reinvest some of that back to the consumer, maybe in experience or price or what have you, or more proteins or, you know, you can look at it so many different ways. How do we think about you? I think 10% of the system will be IKs by the end of this year. As you think about using those to deepen the competitive moat, is that more a regional dynamic? Like, do you need a certain amount of IKs in a market before you can start to think about redeploying some of those savings to the consumer? We are very focused on how we can leverage the IK to create a more profitable business. Finding what is the perfect point from a pricing perspective and understanding a little bit more about the elasticity that can drive the most profit dollars per store is really what we're trying to figure out. How do we maximize that? There are a number of tests that we're doing right now to better understand that. To your point, we have 12 Infinite Kitchens today. We feel very confident in the model. We're opening at least 20 more this year. One of the things we are doing is clustering these stores and focusing them on challenging labor markets, oftentimes where our competitors are higher priced. You'll see us, through clustering, allow us to undercut competition from a pricing perspective. I'd say overall, it's very early. We're kind of learning what the best approach here, how much of it's through core pricing, how much of it's through kind of promo and loyalty. Overall, see an opportunity to leverage this technology to not only create a better customer experience, but address price value and broaden our TAM. You mentioned during your slides that you make everything in-house, and I know some of your peers do not. Do you think you get credit for that from the consumer? Is there a way to kind of highlight that in a broader sense? I know you have where you're sourcing the ingredients from, but I don't know that all the consumers really understand that this isn't coming in a bag and then just plated. Yeah, I think we could always get more credit for it. We do, our kitchens are open. If you go to our new Infinite Kitchen restaurants, what you'll see is the highlight does not become the Infinite Kitchen. It becomes the scratch cooking kitchen. You'll walk into a beautiful chef's kitchen where you're seeing everything being prepped and cooked. You know, like I said, our chicken, you know, our proteins are cooked on the hour. You know, we're cooking, you know, our rice is rotated every 30 minutes. It's really that focus on freshness that I think our consumers can taste. We do our best to really tell that story, not just tell, but show it. It's really that open kitchen showing what we're doing. I think our consumers are pretty discerning and they can taste it. With the IKs, I mean, ultimately, I know it's more about the future growth in terms of IKs. Like, where do you think IKs land as a percent of the fleet? This year, it's a bit over 50% of the pipeline expected to be Infinite Kitchen. If you look at it, you know, it's more back-weighted. On the back half, it's, you know, north of 60%. I'd say, you know, a lot of investors, we have half the investors tell us we're going too slow and half the investors tell us we're going to, you know, half the people tell us we're going too fast on the Infinite Kitchen. Reality is it's still very early. We're still learning a ton. For example, you know, we feel very confident in the technology itself. I know some people are going to visit, they're going to go visit one of the units later today. The technology is stable and works and offers the benefits. What we're very focused on is perfecting the overall experience around the IK. What is the layout, the flow that allows us to create a hospitable, warm environment while having the benefits of the technology? There is, you know, a lot of work being done around the prototype this year, which we'll be introducing a new kind of store prototype featuring the IK and expect to learn from that, as well as focusing on bringing down the cost of the IK longer term. The interesting thing about the Infinite Kitchen is we have a machine where, as we scale, the cost will come down going against the curve that we all know will go up. You know, if New York has a new mayor, that we can have $30 minimum wage, which would make operating restaurants in New York pretty much impossible unless you have some sort of technology like this. We're seeing a lot of opportunity, as an example, in California where nobody can make it work, given where wages have gone. This is where we're picking up drive-throughs, for example. With the Infinite Kitchen, again, we can make it work. If you look at wage today in most markets, around $20, compounding at 3.5%-4% a year, you get to $30 really quick. Longer term, it is a highly strategic piece of technology that will help us build a moat. I think one of the things, you know, I hear from skeptics is, you know, in some way, does the IK commoditize Sweetgreen? Like, do people think Sweetgreen is now an elevated vending machine? You hear that a little bit, not from customers, from investors. How does customer satisfaction look for you when customers go to a Sweetgreen? Do they say, boy, we're not talking to people as much, we're unhappy, we don't feel like the bowl is as good as it used to be? The feedback on the food quality is that it's better. Consistently, the food quality is better. Both the quality, the portioning, the accuracy, the experience from a pure food perspective is definitely a step above. There are opportunities in the experience, and that kind of leads to what I was talking about earlier. How do you create that hospitable experience given the Infinite Kitchen? A lot of it is how a store is laid out, designed, the materials used, as well as the service experience. If you go to an IK, an Infinite Kitchen store, and it's being operated the way it should, while there are kiosks, you should be greeted by someone that should talk you through the menu and help you take your order. We see it as an opportunity to actually add more of a service component in those restaurants. That's where the work is right now, is really perfecting that experience design. Yeah. I do want to point out that your AUVs are nearly $3 million and you have one drive-through and you just launched loyalty. I think those are two really big opportunities for the brand. I guess maybe loyalty being the more obvious. Can you, you said you're already starting to see some frequency uplift from some of the most frequent cohorts. I mean, how do you expect loyalty to play out in terms of, you know, typically there are learnings and then implementation and then you start to see benefits, you know, as maybe a year later, it sounds like you might be seeing it a little bit earlier. Yeah, I think given the high digital penetration that we had, we're maybe seeing some green shoots on it earlier. We also have, we've spent, you know, the past, you know, decade really making sure our data infrastructure is in a really solid place. That gives us a lot of opportunity to leverage the AI revolution that's happening. How we have really, you know, the way our data is structured allows us to personalize offers, emails, images, et cetera, to customers in a way and really kind of go from segmented offers down to personalized offers. We see a lot of opportunity to kind of take that much further. There's a, you know, probably everyone's following this, but a revolution happening around how AI is going to impact a lot of this. We are very, very well positioned to take advantage of this. We have time for, I think, one more on drive-throughs. I know you have one. I'm guessing you can have a lot more. The competition for those sites is also tough, right? Everyone wants a drive-through site. I mean, how is this at this very early stage informing your thoughts about TAM for the brand? I'd say it's early. I think today we would take as many as we could find. To your point, they're very competitive. We have a handful of them coming. We have a handful, a couple this year and a handful more next year that we're beginning to build into the pipeline. As we broaden out of our cities, kind of go into like tier two, those opportunities become more possible. I'll say really focused on it. We know the returns will be good, but we want to be disciplined in the CapEx we put in it. You know, just being highly disciplined. One of the things that we didn't talk a lot about is we do see opportunities in lowering our CapEx. You know, we brought on a new head of development a year ago. We've been optimizing our stores, focusing on size, materials, experience, and see there's an opportunity to improve unit economics, not just through more volume and margin, but also through lower costs. All right. That sounds like a perfect lead-in to the breakout where we will further discuss unit economics. Awesome. Thank you, everyone. Thank you everyone.