(Bloomberg) -- Sweetgreen Inc. shares tumbled after higher labor and protein costs resulted in a wider-than-expected loss for the third quarter.
The salad-centric restaurant chain lost 18 cents per share in the period, four cents more than analysts had projected. The company cited wage hikes in many of its markets. Sweetgreen hasn’t turned a profit since it went public in 2021.
Revenue also missed analyst estimates in the quarter. The Los Angeles-based company is increasing spending to support restaurant growth as it faces stiff competition in the fast-casual space from the likes of Cava Group Inc. and Chipotle Mexican Grill Inc. Sweetgreen added steak to its menu in May in a bid to expand its customer base.
The shares fell as much as 20% in extended New York trading before paring their decline. The stock had gained more than 270% this year through Thursday’s close, raising the bar for investor expectations.
Sweetgreen said in a statement that the new menu offerings and increased kitchen automation bode well for future growth. The company raised the low end of its sales outlook for 2024. It now expects revenue in the range of $675 million to $680 million, up from a floor of $670 million previously.
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