Sweetgreen Reveals Higher-Than-Expected IPO Pricing

Sweetgreen Inc. has unveiled the price of its initial public offering (IPO), with the salad chain saying it would sell 13 million shares of Class A common stock at $28 per share, higher than earlier projections.

Those shares were due to begin trading on Thursday (Nov. 18) on the New York Stock Exchange, with the IPO expected to close on Nov. 22, subject to customary closing conditions, Sweetgreen said in a news release.

Read more: Sweetgreen Seeks up to $2.7B Valuation in IPO, Despite Lack of Profitability

As PYMNTS reported last week, Sweetgreen, which is based in Culver City, California and owns and operates 140 restaurants in 13 states and Washington, D.C., is seeking a $2.7 billion valuation ahead of the IPO. At the time, the plan was to sell 12.5 million shares, priced between $23 and $25.

Sweetgreen hasn’t reached profitability, something the chain attributes to its investments on features like kitchen automation tools, with the goal of boosting margins in the long term.

“We have incurred significant losses since inception,” the company acknowledged in a filing with the U.S. Securities and Exchange Commission (SEC). “We expect our operating expenses to increase significantly in the foreseeable future as we grow our business, increase our new restaurant openings and invest into new technology, and we may not achieve profitability.”

Sweetgreen also ended its loyalty program this year to cut costs, despite research — including PYMNTS’ Restaurant Readiness Index — showing that restaurants that removed their rewards programs were those that lagged behind the most in 2020.

However, 2021 has been a good year for restaurant IPOs, such as Krispy Kreme (also valued at $2.7 billion), the drive-thru coffee chain Dutch Bros. and the fast-casual hot dog chain Portillo.

The Sweetgreen IPO is led by Goldman Sachs and J.P. Morgan. Allen & Company LLC and Morgan Stanley are acting as book-running managers, along with Citigroup Global Markets Inc., Cowen and Company, LLC, Oppenheimer & Co. Inc., RBC Capital Markets and William Blair. Amerivet Securities and Blaylock Van LLC are co-managers.