(Bloomberg) -- Sweetgreen Inc. shares surged after the salad chain posted sales that outpaced market expectations and raised its outlook for the full year.
The stock rose as much as 33% in New York trading on Friday at 10:21 a.m. The stock has already more than doubled in value this year through Thursday’s close, versus a 2.8% gain for the Russell 2000 Index.
The Los Angeles-based company now sees same-store sales increasing 5% to 7% this year, up a percentage point from the previous projection, according to a statement on Thursday. In the second quarter, same-store sales growth of 9% was well above the average analyst estimate.
“Sweetgreen’s second quarter easily topped expectations on all key metrics,” wrote Sharon Zackfia, an analyst at William Blair. Newer markets in Texas, Florida, Atlanta and the upper Midwest also saw “very strong growth,” she said.
Sweetgreen, along with fast-casual peers Chipotle Mexican Grill Inc. and Wingstop Inc., have outperformed recently. Meanwhile, some fast-food competitors are seeing weaker demand among low-income consumers struggling with inflation’s bite.
The company is “participating in the fast-casual subsegment outperformance in an otherwise challenging restaurant industry backdrop,” Andrew Charles, an analyst at TD Cowen, wrote.
(Updates share move and adds analyst commentary; a previous version corrected the year-to-date gain for the Russell 2000 Index.)
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