Here's Why You Should Retain Sweetgreen Stock in Your Portfolio Now

Shares of Sweetgreen, Inc. SG have gained 12.9% in the past six months compared with the industry’s 10.9% growth. The company is benefitting from strategic expansion and menu innovation. Also, focus on the Infinite Kitchen production schedule bodes well. However, elevated expenses are a concern.Growth Catalysts for SG StockSweetgreen’s strategic expansion reinforces its growth potential. In the third quarter of 2024, Sweetgreen opened five new restaurants, including successful launches in emerging markets like Columbus, OH; and Charlotte, NC. These new markets demonstrated double-digit same-store sales growth, bolstering confidence in the brand’s scalability. By the end of 2025, Sweetgreen plans to open at least 40 additional locations, half of which will feature its revolutionary Infinite Kitchen concept.The Infinite Kitchen, a cutting-edge technology, is transforming operational efficiency and customer experience. Currently operating in 10 locations, it reduces labor costs, shortens service times and ensures consistent food quality. As the model is expanded, it is expected to solidify Sweetgreen’s competitive edge and enhance profitability.Menu innovation is another cornerstone of Sweetgreen’s strategy. Recent additions like caramelized garlic steak and seasonal items such as maple-glazed Brussels sprouts have broadened its appeal. The company’s commitment to quality ingredients and expanding its offerings continues to attract new customers while maintaining loyalty among existing ones.Image Source: Zacks Investment ResearchConcerns for Sweetgreen StockThe company has been bearing the brunt of high expenses for some time. During the third quarter of 2024, food, beverage and packaging expenses were $47.7 million compared with $41.8 million reported in the prior-year quarter. The increase was driven by the 31 new restaurant openings and higher protein costs. The total cost of operations was $138.5 million, up 11.4% year over year. Increases in delivery fees, related to the increase in revenues through marketplace channels, credit cards and online processing fees, and repair and maintenance expenses added to the upside. Going forward, the company remains cautious of an increase in commodity costs.ConclusionSweetgreen’s strategic expansion, technological advancements and menu innovation position it as a strong contender in the fast food industry. The company’s ability to scale through initiatives like the Infinite Kitchen and its focus on appealing, high-quality offerings underpin its growth potential. While elevated expenses and rising commodity costs present challenges, Sweetgreen’s operational efficiencies and market penetration efforts are expected to mitigate these pressures over time. For investors, the company’s robust growth catalysts and long-term vision make it an attractive stock to retain.SG’s Zacks Rank & Key PicksSweetgreen currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the Zacks Retail-Wholesale sector have been discussed below.Chipotle Mexican Grill, Inc. CMG presently carries a Zacks Rank #2 (Buy). CMG has a trailing four-quarter earnings surprise of 9.8%, on average. The stock has surged 34.8% in the past year. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.The consensus estimate for CMG’s 2025 sales and earnings per share (EPS) indicates growth of 12.8% and 17.9%, respectively, from the year-ago period’s levels.Brinker International, Inc. EAT presently carries a Zacks Rank #2. EAT has a trailing four-quarter earnings surprise of 12.1%, on average. The stock has surged 222.5% in the past year.The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 9.3% and 44.2%, respectively, from the year-ago period’s levels.Shake Shack Inc. SHAK currently carries a Zacks Rank of 2. SHAK has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has gained 89.6% in the past year.The Zacks Consensus Estimate for SHAK’s 2025 sales and EPS indicates a rise of 14.7% and 42%, respectively, from the year-ago period’s levels.Just Released: Zacks Top 10 Stocks for 2024Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report Brinker International, Inc. (EAT): Free Stock Analysis Report Shake Shack, Inc. (SHAK): Free Stock Analysis Report Sweetgreen, Inc. (SG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks